Arifa Beevi and Others vs Gopalan Ramesan

T.V. Ramakrishnan, J.—One of the substantial questions of law formulated in the second appeal is the following:

...Whether the provisions in Ext. A1 provide a clear contract to the contrary which will dispense with a notice as contemplated u/s 106 of the Transfer of Property Act to terminate the lease?....

There is yet another question of law formulated to which I shall refer to, a little later. The brief facts necessary to decide the questions of law raised can be summarised thus: The plaintiff issued the defendant for eviction of a shop room let out to him on the basis of Ext. A1 rent deed, with arrears of rent. Before filing the suit the plaintiffs issued Ext. B1 notice dated 23-4-1980 purporting to terminate the tenancy and acknowledgment evidencing the receipt of notice by the defendant is produced as Ext. A2. In the plaint, the plaintiff alleged that there is arraiming eviction on various grounds. The postal ears of rent from March, 1980 onwards and that the shop room is an old one in a dilapidated condition and is required for the purpose of demolition and construction of new buildings in the property Plaintiffs further alleged that as per the notice issued by him, the tenancy has been duly terminated.

Defendant while contesting the suit on several grounds, denied all the material allegations in the plaint including the claim for arrears of rent. The allegations regarding the condition of the shop room and the requirement of the room for the purpose of demolition and reconstruction of the buildings were also specifically denied. Further, the defendant raised a specific contention that Ext. B1 notice issued by the plaintiffs terminating the tenancy in question is not a valid one and as such is insufficient to terminate the tenancy in question. On the basis of the above contentions, the defendant prayed for a dismissal of the suit.

Both the courts below on a consideration of the contents of Ext. B1 notice issued by the plaintiffs, have-come to the conclusion that the notice issued in the case is insufficient in law to terminate the tenancy, as it is not in accordance with the provisions contained in section 106 of the T.P. Act. Both the courts below have also found that there is no arrears of rent due from the defendant. Even though there was an allegation in the plaint to the effect that the shop room is in a dilapidated condition and a denial of the same in the written statement, there was no positive finding entered by the courts below on that aspect. In view of the concurrent findings that Ext. B1 notice is invalid and insufficient to terminate the tenancy, both the courts below have dismissed the suit.

In this appeal, the learned counsel for the appellant has challenged the dismissal of the suit as illegal on two grounds. Firstly, the learned counsel has contended that Ext. B1 notice is sufficient in law to terminate the tenancy in accordance with the provisions contained in Section 106 of the T.P. Act and as such the dismissal of the suit as if Ext. B1 is insufficient in law to terminate the tenancy is illegal. Secondly, the learned counsel has argued that Ext. A1 lease deed contains several recitals which operates as contracts to the contrary sufficient to exclude the applicability of section 106 of the T.P. Act, and as such the courts below have gone wrong in dismissing the suit on the ground that there is no valid termination of the tenancy as per Ext. B1 notice. According to the counsel, before going into the question of sufficiency or otherwise of Ext. B1 notice, the courts below ought to have gone into the question whether the lease in the instant case is one which is required to be terminated by a notice u/s 106 of the T.P. Act. In the circumstances, it was argued that the plaintiffs are entitled to get a decree on the basis that the tenancy in question does not require to be terminated in accordance with the provisions contained in section 106 of the T.P. Act.

The learned counsel for the respondent, on the other hand, would contend that through out the proceedings the only contention raised by the plaintiffs was that Ext. B1 is a valid notice sufficient to terminate the tenancy and the question whether the lease is one which contains a clause which excludes the applicability of Section 106 of the T.P. Act was never raised before the courts below. In fact the plaintiffs themselves proceeded on the basis that it is a lease which required termination as contemplated u/s 106 of the T.P. Act. The learned counsel has further contended that there are no recitals in Ext. A1 lease deed which can reasonably be construed as constituting contracts to the contrary sufficient to exclude the applicability of Section 106 of the T.P. Act to the case on band; The learned counsel has also submitted that in the light of the concurrent findings that there are arrears of rent, the clause dealing with arrears of rent and making it a condition for claiming eviction without notice may not operate as a contract to the contrary in the instant case so as to dispense with the requirement of a notice as required by Section 106 of the T.P. Act. So also; it is contended that the clause which entitles the land lord to claim back the shop room for the purpose of reconstruction also may not be applicable in the present case since it has not been proved that the building is in such a condition which requires demolition and reconstruction. The learned counsel has contended that the defendant is a tenant holding over and the tenancy so created by holding over can be terminated only by issuing a notice as contemplated u/s 106 of the T.P. Act. In the light of the concurrent findings regarding the insufficiency of the notice u/s 106 of the T.P. Act, the learned counsel has submitted that no interference is called for with the findings of the courts below.

Even at the outset it has to be observed that in the light of the principles laid down by the Supreme Court in the decision reported in Dattonpant Gopalvarao Devakate Vs. Vithalrao Maruthirao Janagaval, the finding recorded by the courts below regarding the insufficiency of the notice is unsustainable. Both the courts below have elaborately discussed the question and have come to the correct conclusion that Ext. B1 notice issued by the plaintiff in this case is not in accordance with the requirements of Section 106 of the T.P Act. That finding is only to be confirmed. In fact the second question formulated in the appeal deals with the correctness of the said finding and it requires no further consideration.

The only question remaining to be considered is the one relating to the necessity of a notice u/s 106 of the T.P. Act to terminate the tenancy in question, in the facts and circumstances of the case. Ext., Al lease was for a period of the one year commencing from 1-6-1975. The rent fixed was Rs. 150/- per month. There is a recital in the lease deed stipulating that immediately after the expiry of the period of one year, the shop room shall be surrendered without raising any dispute. There is a further provision in the lease deed which I may extract here for the purpose of clarity in Malayalam itself :

It was based upon the recitals extracted above that the learned counsel for the appellant has contended that the lease deed contained contracts to the contrary as contemplated by Section 106 of the T.P. Act. According to counsel the very existence of these clauses without anything more would automatically exclude the operation of Section 106 of the T.P. Act to the lease on hand. Whether the conditions mentioned in the clauses for their operation, is satisfied Or not, need not be considered when the court considers the question whether any of the recitals in the lease dead would operate as contracts to the contrary as contemplated by Section 106 of the T.P. Act. In this connection the learned counsel has relied upon the decisions reported in Kochunni v. Kuriakose, 1981 KLT 338: Varghese v. Sivarama Pillai, 1986 KLT 39; Raghavan v. Ahmed, 1986 KLT 1168; Philip v. State Bank of Travancore, 1972 KLT 914 and the unreported decision in S.A. No. 410 of 1985 referred to in Varghese v. Sivarama Pillai 1986 KLT 39.

White dealing with a clause similar to the first of the two clauses extracted above, it has been held by this Court in the decision reported in Raghavan v. Ahmed, 1986 KLT 1168 that such a clause would operate as a contract of the contrary sufficient to exclude the application of Section 106 of the T.P. Act. Kochu Thommen, J. has held thus in the above decision:

...Ext. A1 specifically provides that the lessor has a right to evict the lessee in default of payment of any rent on the due date. This clause, as stated by a Full Bench of this Court in Philip v. State Bank of Travancore, 1972 KLT 914 (F.B.) is a ''contract to the contrary'', thereby dispensing with the notice required u/s 106.

A similar view has been taken by Mushtaq Ahmad, J. in the decision reported in Amar Singh Vs. Hoshiar Singh, , while dealing with a provision similar to the one on hand. In the above decision it was observed thus:

Where the rent note provides that ''in case of the lessee''s failure to pay the rent agreed, the lessor would be entitled to eject the defendant'', no question of notice can arise at all, as when such a contingency arises, the lessor can sue to eject the lessee straightway as a mere trespasser.

Again in Kochunni v. Kuriakose, 1981 KLT 338; a learned single Judge of this Court has construed a similar clause as a contract to the contrary. The clause considered therein was to the effect that in the event of rent being kept in arrears for any period, the tenant is bound to surrender the property. Bhaskaran, J. (as he then was) construed the clause as a contract to the contrary in the following words:

In as much as Ext. P1 provided that in the event of rent being kept in arrears for any period, the defendant was, bound to surrender the property, it has to be construed that it amounts to a contract to the contrary so as to exclude the operation of the provisions of S. 106 of the T.P. Act in so far as the present transaction is concerned. For this view I take, I find support in the decision of a Full Bench of this Court in Jacob Philip Vs. State Bank of Travancore and Others, ....

It is clear from the above passages extracted from the two decisions of this Court that both the learned Judges have relied upon the principles laid down in the Full Bench decision reported in Philip v. State Bank of Travancore, 1972 KLT 914 to come to the conclusion that the two clauses considered by them would constitute contracts to the contrary. It is further clear that the learned Judges have proceeded on the basis that the principles laid down in Philip v. State Bank of Travancore, 1972 KLT 914 is equally applicable to the two kinds of clauses, one providing specifically a right of eviction to the landlord and the other creating a liability on the tenant to surrender in case where rent is kept in arrears. An agreement by a tenant to surrender the property may by implication create a corresponding right to the landlord to claim eviction on keeping arrears of rent. Thus, it is immaterial whether a particular clause in a deed has mentioned only the liability of the tenant or the right of the landlord, and in either case the clause would act as contract to the contrary is the effect of the above two decisions. Following the above principle laid down in the decisions referred to above, it has to be held that the said clause incorporates a contract to the contrary in the lease deed and is sufficient to exclude the application of Section 106 of the T.P. Act "to the instant case.

Turning to the second recital, I find that the said recital will also act as a contract to the contrary. The effect of a similar clause came up for consideration in the decision reported in Varghese v. Sivarama Pillai, 1986 KLT 39. Varghese Kalliath, J. after relying upon his own earlier decision in S.A. No. 410 of 1985 and also upon the Full Bench decision in Philip v. State Bank of Travancore, 1972 KLT 914 has held thus:

The second point urged by the learned counsel for the appellant is that it is possible to discern clearly ''a contract to the contrary'' in the contract of tenancy in this case I have to examine this point. Ext. A1 is the contract of tenancy. The counsel relies on one of the clauses in the contract Ext. A1 which reads thus:-

Considering the Full Bench decision, in S.A. No. 410 of 1985 I have held that what has to be considered is the contract itself, its terms and its language. Considering the terms of the contract, the court has to come to an independent Conclusion whether the contract of tenancy is a contract which will exclude the compliance of section 106 of the T.P. Act. On this question, the Full Bench has said clearly that such a clause is a contract to the contrary. What the Full Bench has said is ''the latter clause'' providing for liability to surrender and right to evict, if rent far two consecutive months is defaulted, was a dear contract to the contrary. If the agreement of lease provides a ''contract to the contrary the transaction is freed from the grip of the section. I think the clause alone need be looked into. Whether the facts and events proved in the case would justify the operation of the clause enabling the landlord to get surrender of the building otherwise than in accordance with the provisions contained in the T.P. Act is outside the investigation when we consider whether the contract of lease contains a clause which would exclude the compliance of section 106 of the T.P. Act, I hold that the clause in question in the agreement of lease Ext. A1 provides for ''a contract to the contrary'' and excludes the compliance of section 106 of the T.P. Act.

As in the case of the clauses considered in the above two decisions the clause in this case also provides that if the landlord feels that the building has to be demolished or reconstructed, the defendant shall surrender vacant possession, provided the landlord issues 30 days'' notice. It is contended that the very fact that the landlord is given a right to evict the tenant after giving 30 days'' notice and not a notice as required u/s 106 of the T.P. Act would clearly show the intention of the parties to incorporate a contract to the contrary in the lease deed entered into by them.

The learned counsel for the respondents has, on the other hand, contended that even if the two clauses referred to above are liable to be considered as contracts to the contrary, such clauses can have such effect only on satisfying the condition precedents mentioned in those clauses, for their application and not otherwise. Thus it was contended that only when it is proved that there are arrears of rent or that the condition of the building is such that it requires immediate reconstruction the above clauses may operate as contracts to the contrary so as to exclude the application of the requirements of Section 106 of the T.P. Act. 1 find it difficult to accept the said contention of the learned counsel for the respondent; especially in view of the decisions of this Court reported in Varghese v. Sivrama Pillai, 1986 KLT 39 and the unreported decision referred to therein. Such a contention was in fact raised and was considered and found against specifically by Varghese Kalliath, J. first in the unreported decision in S.A. No. 410 of 1985 and latter in the decision reported in Varghese v. Sivarama Pillai, 1986 KLT 39. The very fact that such a clause is incorporated in the lease deed was held to be sufficient to exclude the operation of Section 106 of the T.P. Act. The following extract from the judgment in S.A. No. 410 of 1985 would make the position clear :

The learned counsel for the appellant submitted that the Full Bench decision also observed that ''there is no need for a notice to quit, and the two months'' consecutive default in payment of rent, itself affords a cause of action for eviction''. The learned counsel submits that this observation of the Full Bench has to be given due weight in assessing the argument of the counsel that only in case the plaintiff proves default, the clause will get its operation so as to make the contract a contract to the contrary. I do not think that 1 can accept the contention of the learned counsel. What has to be considered is the contract itself, its terms and its language. Considering the terms of the contract, the court has to come to an independent conclusion whether the contract is a contract which will exclude the compliance of Section 106 of the Transfer of Property Act. On this question, the Full Bench has said clearly that such a clause is a contract to the (contrary. What the Full Bench has said is the latter clause providing for liability to surrender and right to evict. If rent for two consecutive months is defaulted, was a clear contract to the contrary. In view of this, I have to hold that the contract evidenced by Ext, Al provides ''a contract to the contrary'' to exclude the requirements of a notice u/s 106 of the Transfer of Property Act, ....

To the same effect is the observations of the learned Judge contained in the decision reported in Varghese v. Sivarama Pillai, 1986 KLT 39 and already quoted by me in the previous paragraph. I do not find any reason to disagree with the above view and accordingly I hold that while considering the question whether a particular clause in a lease deed would constitute a contract to the contrary as far as Section 106 of the T.P. Act is concerned, it is unnecessary to consider whether the conditions mentioned in the said clause for its application have been complied with or not.

Similarly the contention that the above clauses may have operation only during the period fixed in the lease deed also cannot be accepted in the light of the principles laid down by the Full Bench decision (Philip v. State Bank of Travancore, 1972 KLT 914). Admittedly the respondent is a tenant by holding over and as such the holding over tenancy subsisting between the parties will'' be subject to the same terms and conditions including the clauses acting as contract to the contrary unless specifically modified by mutual agreement of the parties. Hence the said contention has also to be rejected.

In this view of the matter, I have to hold that the lease in question contain clauses operating as contracts to the contrary sufficient to exclude the application of Section 106 of the T.P. Act. In the light of the above findings, it has to be further held that the dismissal of the suit on the basis that the tenancy in favour of the defendant has not been terminated in accordance with Section 106 of the T.P. Act is illegal and has to'' be set aside. It is true that the plaintiff in this case has not taken a specific contention in the plaint or in the courts below that the tenancy in question does not require termination in accordance with Section 106 of the T.P. Act. It is for the first time in the Second Appeal that the plaintiff has taken up such a specific contention. However, being a pure question of law, it may not be possible to disallow such a contention being raised in the Second Appeal. There was a similar objection raised in the decision reported in Kochunni v. Kuriakose, 1981 KLT 338 also. The learned Judge disallowed the said objection and has allowed the point to be raised for the first time in Second Appeal. In these circumstances, I am unable to accept the contention of the respondent''s counsel that the plaintiff should not be allowed to take up such a contention for the first time in the Second Appeal.

In the result the appeal is allowed. The decree and judgment passed by the courts below are set aside. The plaintiff is granted a decree for eviction in the light of the finding that there is no" arrears of rent, the plaintiff is not entitled to get any arrears of rent. The defendant is given a period of six months to surrender the building. The parties are directed to bear their respective costs.