Manjit Singh vs Smt. Chiter Lekha and Another

Rajiv Sharma, J.—This Regular Second Appeal is directed against the judgment and decree, dated 06.12.2012, passed by the learned Additional District Judge, Sirmaur District at Nahan, H.P., in Civil Appeal No. 17-N/13 of 2012. ''Key facts'' necessary for the adjudication of this Regular Second Appeal, are that the respondents-plaintiffs (hereinafter referred to as ''the plaintiffs'' for the sake of convenience) has filed a suit for recovery of possession of shops No. 1 and 2 built upon the land comprised in Khata Khatauni No. 191/295, Khasra No. 420/358, measuring 0-10 bighas, situated at Village and Post Office Dhaula Kuan, Tehsil Paonta Sahib, District Sirmaur, H.P. against the appellant-defendant (hereinafter referred to as ''the defendant'' for the sake of convenience). According to the plaintiffs, they are joint owners of the land and the property built upon Khasra No. 420/358, measuring 0-10 bighas, situated at Mauza Dhaula Kuan, Pargana Khol, Tehsil Paonta Sahib, District Sirmaur, H.P. The suit premises have been rented out to the defendant on monthly rent of Rs. 1800/-. The defendant took undue advantage of the absence of the plaintiffs and illegally, un-authorizedly and without their consent and permission, raised a Tandoor in the vacant space of the plaintiffs. A number of empty liquor bottles were found scattered in the vacant land of the plaintiffs. The plaintiffs objected to the nuisance created by the defendant. The plaintiffs terminated the tenancy of the defendant by serving a notice u/s 106 of the Transfer of Property Act, dated 26.04.2010. Notice was received by the defendant. He sent a reply to the same. According to the notice, the tenancy stood terminated w.e.f. midnight of May 31, 2010. The defendant was legally bound to hand over the vacant possession of the suit premises and the plaintiffs were legally entitled for the possession of the suit premises as well as mesne profits w.e.f. 01.06.2010.

The suit was contested by the defendant. According to the defendant the notice u/s 106 of the Act was not issued in accordance with law. The plaintiffs have received the rent from the defendant up to August, 2010, which tantamount to creation of fresh tenancy. It was admitted by the defendant that the suit premises were owned by the plaintiffs and the same have been rented out to the defendant on a monthly rent of Rs. 1800/-. According to him, the plaintiffs did not raise any objection to the Tandoor installed by the defendant in front of the suit premises after the demise of their predecessor-in-interest till a dispute arose in the year 2009, which was settled amicably. The defendant has also lodged a complaint with the police against the plaintiffs.

The replication was filed by the plaintiffs. Learned Civil Judge (Junior Division), Court No. 2, Paonta Sahib, District Sirmaur, H.P. framed the issues on 18.12.2010. The suit was decreed by the learned Civil Judge (Junior Division), Court No. 2, Paonta Sahib, District Sirmaur, H.P. on 24.01.2012. The defendant preferred an appeal before the learned Additional District Judge, Sirmaur District at Nahan, H.P. The same was dismissed on 06.12.2012. Hence this Regular Second Appeal.

This Regular Second Appeal was admitted on the following substantial questions of law on 22.05.2013:

Whether the conduct of the plaintiffs of receiving rent from the defendant in relation to the suit premises after the issuance of notice amounts to creation of a new/fresh tenancy?

Whether the learned Courts below have wrongly inferred that the tenancy of the defendant was not on yearly basis?

Whether the learned Courts below have erred in granting the relief of mesne profits/use and occupation charges to the plaintiffs in view of there being no corroboration and proof of the case of the plaintiffs and material contradictions in pleading and proof of the plaintiff?

Mr. Karan Singh Kanwar, learned counsel for the appellant, has vehemently argued that since the plaintiffs have received the rent after the issuance of notice, it amounts to creation of new/fresh tenancy. He also contended that the tenancy was on yearly basis and not on monthly basis. He lastly contended that the mesne profits/use and occupation charges have been awarded merely on the basis of guess work.

Ms. Jyotsna Rewal Dua, learned counsel for the respondents, has supported the judgments and decrees passed by both the Courts below.

I have heard the learned counsel for the parties and gone through the pleadings and records carefully.

Since all the substantial questions of law are interconnected and interlinked, the same are taken up together for determination to avoid the repetition of discussion of evidence.

There is no dispute with regard to the relationship of landlord and tenant. The notice was issued by the plaintiffs to the defendant vide Ex. PX, dated 26.04.2010, whereby the monthly tenancy of the suit premises created in favour of the defendant, has been terminated. The notice was received by the defendant. He has filed reply to the same on 01.05.2010 vide Ex. PW1/D. There is no registered instrument to prove that the tenancy was on year to year basis.

According to Section 107 of the Transfer of Property Act, a lease of immovable property from year-to-year, or for any term exceeding one year, or reserving a yearly rent is to be made only by a registered instrument. Thus, the tenancy of the suit premises is on monthly basis and not on yearly basis, as argued by Mr. Karan Singh Kanwar, learned counsel for the appellant.

Mr. Karan Singh Kanwar, learned counsel for the appellant has vehemently argued that the plaintiffs have received rent from the defendant. Thus, the fresh tenancy was created.

A sum of Rs. 7200/- was paid to the learned Advocate appearing on behalf of the plaintiffs on 11.08.2010 and a sum of Rs. 3600/-was paid on 12.10.2011. A sum of Rs. 12600/- was paid on 14.03.2011. This amount has been received by the learned counsel appearing on behalf of the plaintiffs as use and occupation charges under protest. Once the tenancy has come to an end, the defendant was bound to pay the use and occupation charges. The suit premises were bound to be vacated by the defendant after the receipt of notice, Ex. PX. Since the defendant has refused to do so, his occupation of suit premises on 31.05.2010 was of trespasser.

Their Lordships of the Hon''ble Supreme Court in Shanti Prasad Devi and Another Vs. Shankar Mahto and Others, have held that on expiry of period of lease, mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying "assent" to the continuance of the lessee even after expiry of lease period. Their Lordships have held as under:

We fully agree with the High Court and the first appellate Court below that on expiry of period of lease, mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying ''assent'' to the continuance of the lessee even after expiry of lease period. To the legal notice seeking renewal of lease, the lessor gave no reply. The agreement of renewal contained in clause (7) read with clause (9) required fulfilment of two conditions; first the exercise of option of renewal by the lessee before the expiry of the original period of lease and second, fixation of terms and conditions for the renewed period of lease by mutual consent and in absence thereof through the mediation of local Mukhia or Panchas of the village. The aforesaid renewal clauses (7) and (9) in the agreement of lease clearly fell within the expression ''agreement to the contrary'' used in Section 116 of the Transfer of Property Act under the aforesaid clauses option to seek renewal was to be exercised before expiry of the lease and on specified conditions.

Their Lordships of the Hon''ble Supreme Court in C. Albert Morris Vs. K. Chandrasekaran and Others, have held that any amount paid by the tenant after the expiry of the lease period would be adjusted against compensation and should not be treated as landlord''s consent for continuance of possession. Their Lordships have held as under:

Though the arguments of the learned senior counsel appearing for the appellant are attractive on the first blush yet on a careful reconsideration of the same, it has no merits. The judgments cited by the learned senior counsel appearing for the appellant are not only distinguishable on facts but also on law. Much argument was advanced on the receipt of the rent by the landlord after the cancellation of the lease. The consensus of judicial opinion in this country is that a mere continuance in occupation of the demised premises after the expiry of the lease, notwithstanding the receipt of an amount by the quondam landlord would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in possession. In this context, we may refer to judgment of this Court in M/s. Raptakos Brett and Co. Ltd. Vs. Ganesh Property, . In paragraph 13 of the said judgment, this Court held as under:

In view of the aforesaid settled legal position, it must be held that on the expiry of the period of lease, the erstwhile lessee continues in possession because of the law of the land, namely that the original landlord cannot physically throw out such an erstwhile tenant by force. He must get his claim for possession adjudicated by a competent Court as per the relevant provisions of law. The status of an erstwhile tenant has to be treated as a tenant at sufferance akin to a trespasser having no independent right to continue in possession.

It is also seen from Annexure R-6 (page 33 of the paper book Vol. II) which is a notice sent by the landlord''s advocate to the tenant-the appellant herein on 21.2.1997 wherein it has been clearly stated in paragraphs 2,3 & 4 which read as under:

You were a tenant under my client in the property described in the schedule hereunder. My client states that as the period of lease expired on 30.9.1996 by agreement, my client had issued a notice dated 24.8.1996 determining the lease and directing you to vacate and handover possession of the schedule mentioned property. My client states that after the determination of lease your possession amounts to that of a trespasser and you are liable to pay compensation which is to be determined after your vacating the premises.

My client states that subsequent to the notice dated 24.8.1996, you have chosen to send three Banker''s cheques dated 30.11.1996, 24.12.1996 and 29.1.1997, each for Rs. 4500/-. My client states that he had not consented for your continued possession of the schedule mentioned property in any manner. Hence my client apprehends that the banker''s cheques being sent are a ruse to create the appearance of continuation of tenancy.

Hence take notice that my client will encash the banker''s cheques already sent by you and any that might be sent in future under protest and that the payments made by way of such cheques will be adjusted towards the compensation payable by you and take notice that encashments of any cheques already issued and that might be issued in future should not be treated or considered as consent from my client for your occupying the schedule mentioned property.

We are, therefore, of the opinion that mere acceptance of rent by the landlord-Ist respondent herein from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer the erstwhile tenant the status of a tenant or a right to be in possession. We answer this issue accordingly.

In our opinion, any right which the dealer has over his site was the right which he had acquired in terms of the lease. When that lease expired and when the landlord declined to renew the same and also called upon the erstwhile tenant to surrender possession, the erstwhile lessee could no longer assert that he had any right to the site. His continued occupation of something which he had no right to occupy cannot be regarded as source of a right to the land of which he himself was not in lawful possession. As observed by this Court in the case of M.C. Chockalingam & Ors. Vs. V. Manickavasagam & Ors. (supra), litigious possession cannot be regarded as lawful possession. As rightly pointed out by the Division Bench of the High Court the right referred to in this Rule has necessarily to be regarded as right which is in accordance with law and the right to the site must be one which is capable of being regarded as lawful. We have already referred to Bhawanji Lakhamshi & Ors. Vs. Himatlal Jamnadas Dani & Ors. (supra) wherein this Court held that the act of holding over after the expiration of the term does not create a tenancy of any kind. A new tenancy is created only when the landlord assents to the continuance of the erstwhile tenant or the landlord agrees to accept rent for the continued possession of the land by the erstwhile tenant. The contention of Mr. L.N. Rao that the landlord''s assent should be inferred from the conduct of the landlord who had filed the suit for ejectment, but did not pursue the same, has no force. This suit was withdrawn with liberty to file a fresh suit on the same cause of action, liberty which the Court has granted. The possession of this site by the erstwhile lessee does not ripen into a lawful possession merely because the landlord did not proceed with the suit for ejectment at that time, but reserved the right to bring such a suit at a later point of time. That cannot amount to an assent on his part to the continued occupation of the landlord under cover of a right asserted by the erstwhile lessee. The words "right to the site" in Rule 153(1) (i) must, therefore, in our opinion, be given their full meaning and the effect that unless the person seeking a licence is in a position to establish a right to the site, he would not be entitled to hold or have his licence renewed. We have already rejected the contention of Mr. L.N. Rao that the appellant-tenant is a statutory tenant for the reasons recorded earlier. The lease deed is very clear as to what was leased. The lease was of vacant land. That is evident from the recitals in the plaint, legal notice, lease deed etc. It is, therefore, not in dispute that the lease of land is not covered by the statute, The Pondicherry Buildings (Lease and Rent Control) Act, 1969 in force extending protection to tenants.

Their Lordships of the Hon''ble Supreme Court in Sarup Singh Gupta Vs. S. Jagdish Singh and Others, have held that it cannot be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so intended. Their Lordships have held as under:

In the instant case, as we have noticed earlier, two notices to quit were given on 10-2-1979 and 17-3-1979. The suit was filed on 2-6-1979. The tenant offered and the landlord accepted the rent for the months of April, May and thereafter. The question is whether this by itself constitutes an act on the part of the landlord showing an intention to treat the lease as subsisting. In our view, mere acceptance of rent did not by itself constitute an act of the nature envisaged by Section 113, Transfer of Property Act showing an intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted the rent which was being paid to him by the tenant. It cannot, therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the practice followed by the courts is to permit the landlord to receive each month by way of compensation for the use and occupation of the premises, an amount equal to the monthly rent payable by the tenant. It cannot, therefore, be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so intended. In the instant case, we find no other fact or circumstance to support the plea of waiver. On the contrary, the filing of and prosecution of the eviction proceeding by the landlord suggests otherwise.

Mr. Karan Singh Kanwar, learned counsel for the appellant, has put strong reliance on Bhuneshwar Prasad and Another Vs. United Commercial Bank and Others, . Their Lordships have held that landlord''s assent to tenant continuing in possession after expiry of lease can be inferred, if the landlord keep on accepting the increased rent. Their Lordships have held as under:

Mr. Sanyal, learned senior counsel appearing for the appellants contends that Section 116 of the Transfer of Property Act would not be attracted merely on acceptance of rent. Reliance is placed upon a decision of Federal Court in AIR 1949 124 (Federal Court) . We agree that to bring a new tenancy into existence within the meaning of Section 116, there should be an agreement as the section contemplates that on one side, there should be an offer of taking a fresh demise (premise) evidenced by lessee''s continuing occupation of the property after the expiry of the lease and on the other side, there must be a definite assent to this continuance of possession by the lessor/landlord and that such an assent of the landlord cannot be assumed in cases of tenancies to which Rent Restriction Acts apply on account of the immunity from eviction which a tenant enjoys even after the expiry of lease. In such cases, the landlord cannot eject him except on specified grounds mentioned in the Rent Restriction Acts and thus the acceptance of rent by the landlord from a statutory tenant, whose lease has already expired, would not be taken as evidence of new agreement of tenancy and it would not be open to such a tenant to urge that by acceptance of rent, a fresh tenancy was created. We do not expect a lessor not to accept the rent when, in view of the protection granted by the Rent Restriction laws, without existence of one or the other ground, he is precluded from seeking eviction of the lessee and in such a case, there would be no question of creation of tenancy from month to month. Under these circumstances, mere acceptance of amount equivalent to rent or the standard rent would not attract Section 116. Assent to lessee continuing in possession would be absent in such cases. However, an agreement creating fresh tenancy within the meaning of Section 116 can be implied from the conduct of the parties. In Ganga Dutt Murarka Vs. Kartik Chandra Das and Others, while affirming the dictum laid down in Khushroo''s case (supra), it was held that apart from an express contract, conduct of the parties may undoubtedly justify an inference that after determination of the contractual tenancy, the landlord had entered into a fresh contract with the tenant, but whether the conduct justifies such an inference must always depend upon the facts of each case. In Bhawanji Lakhamshi and Others Vs. Himatlal Jamnadas Dani and Others, , again the question that came up for consideration was as to whether a fresh tenancy was created or not by acceptance of rent by the lessor after the termination of the tenancy by efflux of time. This Court declined the prayer to reconsider Ganga Dutt Muraka''s case (supra) and held that acceptance by landlord from the tenant, after the contractual tenancy had expired, of amounts equivalent to rent or amounts which was fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of Section 116 of the Transfer of Property Act. The present is not a case of acceptance of amounts equivalent to rent or amounts fixed as standard rent but acceptance of increased rent. It was also observed that "we do not say that the operation of Section 116 is always excluded whatever be the circumstances under which the tenant pays the rent and the landlord accepts it." The whole basis of Section 116 is that a landlord is entitled to file a suit for ejectment and obtain a decree for possession and, therefore, his acceptance of rent after expiry of lease is an unequivocal act referable to his desire to assent to the tenant continuing possession. It would be absent in cases where there are the restrictions as contemplated by Rent laws. In such cases, therefore, it is for the tenant where it is said that the landlord accepted the rent not as a statutory tenant but only as a legal tenant indicating his assent to tenant''s continuing possession, to establish it.

In the present case, the bank from the conduct of the owners has established that the acceptance of increased rent was in token of owners assent to the bank continuing in possession after expiry of the lease, thereby creating lease from month to month within the meaning of Section 116 of Transfer of Property Act, 1882. The High Court has rightly reversed the judgment and decree of the trial Court. Before parting we may make it clear that we are not concerned with the proceedings for fixation of the rent if pending before the appropriate authorities under the Act, as the same are not the subject matter of this appeal and the fixation of the standard rent and from when it is payable is a matter to be decided by the said authorities in accordance with law.

However, in the instant case, the rent has been received by the learned counsel appearing on behalf of the plaintiffs as use and occupation charges under protest on 11.08.2010, 14.03.2011 and 12.10.2011 and his statements were recorded separately. Thus, it is held that both the Courts below have rightly come to the conclusion that there is no creation of new/fresh tenancy merely by accepting the rent, that to by the learned counsel appearing on behalf of the plaintiffs towards use and occupation charges under protest.

The learned Single Judge of Delhi High Court in Amar Chand Talwar and Others Vs. Export Promotion Council for Handicrafts, has held that in the absence of a registered instrument, the lease is to be treated as monthly lease. The learned Single Judge has held as under:

It is an admitted position that on 3.6.1986, the suit premises were leased out to the defendant at a monthly rent of Rs. 16,500 for a period of three years vide unregistered lease deed dated 3.6.1986. According to the lease agreement, the lease was renewable for a further period of three years with the mutual consent of the parties by paying 15% increased rent. It is also undisputed that the rent last paid by the defendant was Rs. 25,094/- per month. Learned Counsel for the defendant contended that since the defendant has been paying increased rent to the plaintiffs, the contract of tenancy stands renewed till 3.6.1998 in accordance with the terms of the lease agreement dated 3.6.1986 and that being so, the notice dated 7.1.1995 is invalid and the present suit for eviction is premature. I am unable to accept the aforesaid submissions of the learned counsel. Section 107 of the Transfer of Property Act postulates that a lease of immovable property from year-to-year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. In the absence of registered instrument, it must be a monthly lease. In view of the said provisions, since the lease was for a period exceeding one year, it could only have been extended by a registered instrument executed by the plaintiffs and defendant. In the absence of registered instrument, the lease shall be deemed to be "lease from month-to-month". The unregistered lease deed dated 3.6.1986 is clearly inadmissible in evidence u/s 49 of the Registration Act, except for the collateral purpose of proving the nature and character of possession of the defendant. The proviso to Section 49 of the Registration Act is not applicable in the present case inasmuch as the terms of a lease are not a "collateral purpose" within its meaning. (Satish Chand V. Govardhan Das). Thus, the lease deed dated 3.6.1986 is inadmissible in evidence to prove the transaction of lease. It was also ineffectual to create a valid lease for a renewed term for want of registration u/s 17 of the Registration Act. Consequently, I find and hold that in the instant case, the lease shall be deemed to be a lease from month-to-month, terminable, on the part of either lessor or lessee by 15 days'' notice u/s 106 of the Transfer of Property Act expiring with the end of a month of the tenancy.

18 Mr. Karan Singh Kanwar, learned counsel for the appellant has also submitted that the mesne profits @ Rs. 3000/-have been calculated merely on the basis of guess work. Learned Courts below have taken into consideration the statement of PW-1 while determining the mesne profits/use and occupation charges. The shops were let out to the defendant 30 years back. The rent of both the shops was Rs. 1800/- per month. The plaintiffs are also charging rent @ Rs. 800/- per month each for other shops, but the size of these shops is half the areas of each of the shops occupied by the defendant. The shops are situated on National Highway-72 and in case the plaintiffs have to induct new tenants, it would easily fetch rent @ Rs. 3000/- per month for two shops. Plaintiff No. 1 while appearing as PW-1, has also testified that the rent of similarly situate premises in the close vicinity of the suit premises was @ Rs. 3000/- per month. No suggestion was put to plaintiff No. 1 on this issue by the defendant. There is nothing in the statements of DW-1, Sh. Manjeet Singh, son of Sh. Jaswant Singh (defendant) and DW-3, Sh. Manjeet Singh, son of Sh. Hazara Singh that the prevailing rent of the shops in the area of similar size was less than Rs. 3000/- per month. The only requirement under the law is that the landlord is required to prove as to how much rent he can fetch by letting out the premises on being vacated by the tenant. There is no defect in notice issued u/s 106 of the Transfer of Property Act, as contended by Mr. Karan Singh Kanwar, learned counsel for the appellant. The notice was in the nature of communication of the intention to the tenant to vacate the premises. The averments contained in notice, Ex.-PX regarding constructing of Tandoor will not make the notice defective. Accordingly, in view of the observations and analysis made hereinabove, there is no merit in this Regular Second Appeal and the same is dismissed, so also the pending application(s), if any. No costs.