Gajanan Saw Mill vs Gopal Pd. Agrawal and others

S.C. Pandey, J.

This appeal u/s 100 of the Code of CPC is directed against the judgment and decree of the Court-below dated 28-7-1986, passed in C. A. No. 6-A/1983, arising out of judgment and decree dated 8-12-1982 passed by Civil Judge Class-II, Durg, in Civil Suit No. 3-A/1981.

this Court has admitted this appeal by order dated 12-11-1986 on the following Substantial Questions of Law:

(1) Whether in the absence of pleadings and proof u/s 12 of M. P. Accommodation Control Act a decree of ejectment can be granted against the Appellant? (2) Whether an unregistered deed for Lease for the suit land (Exhibit P-3), is admissible in evidence and the ejectment can be sought on the basis of breach of terms incorporated in the unregistered deed?

The facts of this case are that Shri K. C. Agrawal was appointed a receiver in insolvency proceedings instituted against the owner. He filed a suit for ejectment against the Appellant alleging that the suit - plot was let out by him for a period of one year on 14-1-1980. The open plot was appurtenant to Gajanan Saw Mill and the object of leasing it out was that it would be used for the purpose of the work connected with Saw Mill. It was expressly agreed that the Appellant shall not make any permanent construction upon it. The rate of rent was agreed to be Rs. 125/- per month. It was stated in the plaint that the Appellant was liable to be evicted on the ground that the Appellant had committed the breach of terms of the lease by raising a permanent structure upon the suit plot contrary to terms of the lease. His tenancy was terminated with effect from the end of the month of September, 1980 by the notice dated 20-8-1980 received on 22-8-1980. It was alleged that the Appellant had not paid the rent amounting to Rs. 250/- from 1-8-1980 to 31-3-1981 amounting to Rs. 1,000/- . A claim was made for the aforesaid amount.

3A. The defence of the Appellant was to the effect that the suit plot was let out initially on 1-12-1979. The suit land was let out for construction of Saw Mill and Furniture shop. It was stated that purpose of taking the suit plot on lease could not be carried out without making a permanent construction. However, it was stated that there was already a permanent structure in existence since 1976. It was pleaded that suit was liable to be dismissed.

The trial Court held that the Appellant was the tenant of the receiver Shri K. C. Agrawal with effect from 1-12-1979 on monthly rent of Rs. 125/- per month. It was held that the Appellant was liable to be evicted after removal of super-structure as he had committed breach of terms of agreement. It was further held that the Appellant had paid the rent and, therefore, the Respondent was not entitled to any money decree.

In first appeal, the judgment and decree of the trial Court was confirmed. It was held that the suit plot was let out as per agreement dated 1-12-1979 (Ex. P-3). The tenancy was monthly at the rate of Rs. 125/- per month. The suit plot was appurtenant to Gajanan Saw Mill. It was let out for the purpose of the Gajanan Saw Mill which the Court found to be incidental and ancillary. It was held that an express agreement to the effect that there shall be no permanent construction made upon the suit plot. It also found from the material on record that the Appellant had made permanent construction contrary to express agreement in writing. The Appellant was running a saw Mill on that plot. He had spent Rs. 25,000/- for making a permanent construction on that plot. It could not be said to be of temporary nature. It was further held that the Appellant was liable to be evicted as he had breached the terms of the express agreement. The lower appeal Court appears to have held that there was no merit in the argument that the Appellant cannot be evicted except on one of the grounds mentioned in the M. P. Accommodation Control Act, 1961 (henceforth ''the Act of 1961'').

The second question may be taken-up first. Did Ex. P-3 require registration? The answer to this question shall depend upon the terms of Ex. P-3. The Ex. P-3 appears to have been signed on 7-1-1980. It is styled as Kirayanama Jamin Ek Sal Ke Liye (written in Hindi). Apparently, it purports to be a ''rent note'' for one year. However, title by itself is of no consequence. The question is if this document created a lease. It may be noted though the Appellant obtained lease from 1-12-1979. This document was signed on 7-1-1980. It indicates that the Appellant got the possession of the suit plot prior to execution of Ex. P-3 dated 7-1-1980. Thereafter, only the Attorney of the Appellant signed the document showing the terms agreed upon orally. The terms of the document show that the signatory acknowledged that he had already taken the suit plot at the rate of Rs. 125/- per month and the terms on which it was taken were being declared in writing. He further stated in so many words that his liability to pay rent had started from 1-12-1979 and he promised to pay rent at the rate of Rs. 125/- per month. There are other terms like the purpose for letting out the suit plot was limited for the use of Gajanan Saw Mill without making any construction. The duration of lease was limited to one year. There was prohibition from sub-letting. The right of landlord to terminate the tenancy by one month''s notice and automatic termination of tenancy if the rent is not paid for three months were also provided for. There are other terms but they need not detain us. Looking to the document as a whole, this Court is of the view that the Appellant was already placed in possession on or about 1-12-1979 on the terms orally agreed upon. The document Ex. P-3 dated 7-1-1980 merely reproduces the terms orally agreed upon between the parties on or about 1-12-1979. The person granting the lease had not signed Ex. P-3. A lessee cannot create lease in his own favour by executing a rent note. Thus, this Court comes to the conclusion that the Ex. P-3 is not a lease-deed within the meaning of Section 105 of the Transfer of Property Act (henceforth ''the Act''). The document does not create a lease by its own force as lessor had not executed the document stating that he had transferred the demise in favour of the lessee. It may be noted further that Section 107 of the Act requires that a lease-deed should be signed by both lessor and the lessee. It further follows from a close reading of paragraphs 1 and 2 of Section 107 of the Act if a lease is required by law to be in writing, then it should be executed by both lessor and lessee and it should be registered as in the case enumerated in paragraph 1 of that section. The paragraph 2 deals with cases where the writing and the registration of the lease-deed is not compulsory. In such case, a lease can be created orally accompanied by delivery of possession or in writing. If it be in writing then the terms of paragraph 2 require that it should be registered. Further, a written lease-deed is to be executed by both the lessor and the lesseee. Thus, the Ex. P-3 is merely a rent note i.e. a memorandum recording the terms of oral agreement to lease the property which is signed by the lessee. In view of this matter, this Court is of the view that none of the provisions of the Act make it inadmissible in evidence on the count that it was not registered.

This takes us to the question if any of the provisions of the Indian Registration Act would restrict the admissibility of Ex. P-3. Section 2(7) of that Act has given a wider definition of lease. It would include counterpart, Kabuliyat or an undertaking to cultivate or occupy and an agreement to lease. The document Ex. P-3, as already noted, incorporates terms on which the suit property was let out. The signature on behalf of the Appellant would show that he accepted the terms mentioned therein. This document could be read as acknowledgement or an undertaking to abide by the terms. It implies that the lessee shall occupy. It is, therefore, a lease within the meaning of Section 2(7) of the Indian Registration Act. However, even if it be lease, as aforesaid, Section 17(1)(d) of that Act requires compulsory registration for leases of immovable property (i) from year to year (ii) for any term exceeding one year (iii) or reserving a yearly rent. It is clear from Ex. P-3 that it is not a lease from year to year. Such a tenancy like the tenancy from month to month, is terminable by a notice to quit at the end of year in accordance with law or as per agreement. The document Ex. P-3 does not require such termination but says that lease is for one year. It, therefore, ends by efflux of the year and not by any notice. Nor can it be said that the yearly rent is reserved. Yearly rent is reserved in a given case when parties agree that the rent would become due on the date the expiry of the year from the date of lease and shall become due again on the expiry of the date of next year. This could happen only when the lease is from year to year. A lease for any time not exceeding a year is not covered by the above expression. It is apparent that the legislature wanted that only those documents falling within the definition of lease shall be required to be registered compulsorily which stipulates a term of lease for more than one year, in case of an immovable property. The express use of the words or a term exceeding one year points out in the same directions. It is, however, argued that the Ex. P-3 itself says that lease is liable to be renewed after expiry of one year. However, the renewal clause itself denotes that a fresh writing shall have to be entered into with the consent of the landlord if lessee desires to continue beyond one year. These words limit the rights of the Appellant for tenancy for period of upto one year rather than extending his right to claim it for more than a year. For all these reasons, it is held that the Ex. P-3 is not compulsorily registerable u/s 17(1)(d) of the Indian Registration Act and is admissible as such in evidence.

Now the question No. 1 is required to be answered. The plot in question is an open plot. The definition of "accommodation" includes any land which is not being used for agricultural purpose. This is provided in Section 2(a)(1) of the Act of 1961. Apart from the plain words of Section 2(a)(1) of the Act of 1961, it is clear that the legislature wanted a piece of open land to be treated as an accommodation and consequently provided a special ground for eviction of a tenant to the landlord from the open land by enacting Section 12(1)(n) of the Act of 1961. There is nothing in the context to the contrary for holding that the suit plot which was let out for the purpose of the Gajanan Saw Mill does not come within the definition of accommodation. It was open plot that let out as is clear from the Ex. P-3. It follows that the landlord cannot evict the tenant unless he establishes one of the grounds mentioned in Section 12(1) of the Act of 1961. The opening words of Section 12(1) of the Act of 1961 prohibit a landlord from filing a suit of eviction against the tenant only on grounds mentioned in Section 12(1)(a) to Section 12(1)(p) of the Act of 1961. That apart, certain categories of landlords may get a decree for eviction against a tenant by way of special provision of the Act of 1961. A company, a body corporate, a local authority or any public institution can get eviction in a suit on the ground mentioned in Section 20 of the Act of 1961. Section 22 of the Act of 1961 is for encouraging the building activity and authorises the Rent Controlling Authority on an application by the landlord to sever open plot from a building and place it possession of the landlord after apportioning the rent as a consequence of severance. The chapter III-A of the Act of 1961 provides for eviction of tenants by way of summary procedure in case of certain categories of landlord mentioned in Section 23-J of the Act of 1961. The express words of Sections 12, 20 and that of 23-A of the Act of 1961 clearly show that the tenant of an accommodation cannot be evicted wholly unless and until the landlord establishes one of the grounds mentioned above. The Rent Controlling Authority has power to sever a plot and give vacant possession and this amounts only to partial eviction. Indeed, in the context of Section 12 of the Act of 1961 with which we concerned at the moment, the Supreme Court in the case of Roshan Lal and Another Vs. Madan Lal and Others, overruled a Division Bench decision of this Court reported in the case of Smt. Chandan Bai Vs. Surjan, holding that as a matter of construction of Section 12(1) of the Act of 1961, it cannot but be held that the Court is not entitled to pass a decree of eviction except on those grounds that are mentioned in Section 12 of the Act of 1961. This view is now firmly established and effect of it is that there is mandate on the Court to see while passing a decree u/s 12 of the Act of 1961 if any ground for eviction exists. The tenant cannot waive it by compromise giving up his claim for protection. A compromise decree without the existence of ground u/s 12 of the Act of 1961 is a nullity.

It is urged that the decree passed by the Courts below cannot be sustained in the eyes of law as it is not based on any of grounds mentioned in Section 12(1) of the Act of 1961. It appears to this Court that the fact that the Appellant constructed a permanent structure on open plot contrary to a term in the Ex. P-3 is not ground for eviction u/s 12(1) of the Act of 1961 specifically. The question is if construction of permanent structure on open plot would be detriment to the interest of the landlord was not specifically pleaded. No issue was framed on this point. Similarly, a permanent construction on an open plot may not ordinarily diminish its value. However, it is possible to envisage a situation where a tenant may make a construction on the open plot which may not be easily removable or liable to be destroyed. Such a construction may diminish the value of the plot or may even enhance it. This would be a question of fact depending upon the nature of construction and its relation to the market price of the other open plots and the use the landlord wanted to put it to after construction. In the case at hand apparently the permanent construction made by the Appellant could be removed by taking away the super-structure. Therefore, on the matters as they stand on record it is possible to hold that the ground u/s 12(1)(m) of the Act of 1961 is not made out. However, this Court cannot give a finding in this second appeal because there was no issue framed u/s 12(1)(m) of the Act of 1961. Both the Courts below have made an error in founding the decree of eviction on the ground that the Appellant had breached the terms of the Ex. P-3.

Now we are required to examine the argument on behalf of the Respondent that since the Respondent had specifically agreed not to create a permanent construction, it should be held that he is liable to be evicted u/s 12(1)(c) of the Act of 1961. The eviction u/s 12(1)(c) of the Act of 1961 was not pleaded in the manner now sought to be argued. Section 12(1)(c) of the Act of 1961 reads as under:�

Section 12(1)(c): that the tenant or any person residing with him has created a nuisance or has done any act which is inconsistent with the purpose for which he was admitted to the tenancy of the accommodation, or which is likely, to affect adversely and substantially the interest of the landlord therein:

Provided that the use by a tenant of a portion of the accommodation as his office shall not be deemed to be an act inconsistent with the purpose for which he was admitted to the tenancy;

An analysis of Section 12(1)(c) of the Act of 1961 shows that a tenant is liable to be evicted (i) if he or person residing with him had created a nuisance (ii)(a) done any act which is inconsistent with the purpose for which he was admitted to the tenancy of the accommodation or in the alternative (ii)(b) which is likely to affect adversely and substantially the interest of the landlord therein. For the purpose of this case, it is not necessary to go further and discuss the effect of the proviso to Section 12(1)(c) of the Act of 1961. It is clear that Ex. P-3 had enjoined the Appellant not to raise a permanent structure and use the open plot as such for his saw Mill. The finding of fact is that the Appellant had in fact made room of permanent nature despite the prohibition against it in the agreement. Now would it amount to ''nuisance''? It is very difficult to say when the parties had not led any evidence regarding that aspect of the matter. Would it amount an act which is inconsistent with the purpose for which the open plot was let. If we read the agreement closely along with the stipulation that the Appellant shall not make a permanent structure upon it, it is clear that the open plot was let out as such for the use of Saw Mill. The Appellant was prohibited from raising a permanent structure. He could use the open plot without changing its nature qua open piece of land. The moment the Appellant raised a permanent structure on the open piece of land, the user of the plot became inconsistent. The landlord was conscious at the time of letting out that the tenant is likely to make a permanent construction. The landlord was the receiver. He wanted to retain the plot in the same condition, as it was, when it was handed over. Therefore, he limited the use of land for the purpose of the Saw Mill as open piece of land without making any construction. He may not have specified the purpose, but it is obvious that the tenant was entitled to use the open plot for whatever purpose that suited the requirement of the Saw Mill without making any permanent construction upon it. Thus construction of permanent amounted to ''inconsistent user'' of the open piece of land. It has been held in the case of Doraikannu Ammal Vs. T. Ramaswami Mudaliar, , that a plot let out for laying down a garden cannot be permitted to be used for construction of building. The inconsistent user could be injuncted. It appears to this Court that the Courts below have granted the decree on the ground of forfeiture of tenancy covered by Section 111(g) of the Transfer of Property Act. This they could not have done. However, Section 12(1)(c) of the Act of 1961 is the ground under the Act of 1961 which has been proved by the Respondent. Therefore, it is not necessary to go further and decide if the raising of permanent structure would affect the interest of the landlord adversely and substantially. The case decides itself on the ground of inconsistent user against the purpose for which the Appellant took lease.

The result of the above discussion is that the question No. 1 is answered by saying that the Courts below were not right in decreeing the suit merely on the ground of the breach of the covenant to lease. The land in question is ''Accommodation'' within the meaning of the Act of 1961 and the Respondent can get eviction in present context on the basis of one of the grounds mentioned in Section 12(1) of the Act of 1961.

The second question is answered by saying that the Ex. P-3 is admissible in evidence for proving the terms of the tenancy.

However, the answer to the first question does not result in dismissal of the suit. It appears to this Court that the Respondent had established a ground u/s 12(1)(c) of the Act of 1961.

Consequently, there is no merit in this appeal. It fails and is hereby dismissed. No costs.