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Judgment
P.R. Shivakumar, J.—The first defendant in the original suit is the appellant in the second appeal. The plaintiff in the suit is the first
respondent and the second defendant in the suit is the second respondent in the second appeal. V. Rajendran, the first respondent/plaintiff filed the
original suit on the file of the Sub-Court, Coimbatore against the appellant herein and the second respondent herein, praying for a decree directing
the defendants therein (appellant and second respondent): 1) to vacate and deliver vacant possession of the property described in plaint ''A''
schedule after removing the superstructure put up by the appellant herein/first defendant; 2) to pay Rs. 29,766/- as arrears of rent along with an
interest at the rate of 12% from the date of suit till realization; 3) to pay a sum of Rs. 25,000/- as damages for use and occupation together with an
interest at the rate of 12% p.a. from the date of suit till realization; 4) to pay future damages for use and occupation, at such rate as the court may
deem fit, from the date of suit till delivery of possession together with an interest at the rate of 12% p.a. and 5) to pay costs. The same was taken
on file as O.S. No. 1612 of 2000. Subsequently due to the changes made to the Civil Court''s Act by Act 1 of 2004, the suit was transferred to
the Court of District Munsif, Coimbatore and renumbered as O.S. No. 979 of 2004 on the file of the District Munsif Court, Coimbatore. The
learned II Additional District Munsif, Coimbatore to whom the same was made over, conducted trial and after trial, decreed the suit for the relief
of possession directing the defendants therein to hand over within two months vacant possession of the suit property after removing the
superstructures put up by them. The question of mesne profits (damages for use and occupation) was relegated to a separate enquiry on an
application to be filed for that purpose. The claim of the defendants to be entitled to the benefit u/s 9 of the City Tenants Protection Act was also
negatived.
As against the judgment and decree of the trial Court dated 16.03.2006, the appellant herein/first defendant preferred an appeal on the file of
the Sub-Court, Coimbatore in A.S. No. 89 of 2006, and the second defendant preferred appeals in A.S. No. 69 of 2006 and C.M.A. No. 46 of
2006. The learned lower appellate Judge, namely the II Additional Subordinate Judge, Coimbatore heard all the appeals together and disposed of
the same by a common judgment dated 09.11.2006. By the said common judgment, the learned lower appellate Judge, dismissed both the appeal
suits and also the civil miscellaneous appeal without costs.
The appellant herein/first defendant alone has come forward with the present second appeal against the decree of the lower appellate Court
made in A.S. No. 89 of 2006 alone. For the sake of convenience, the parties are referred to in accordance with their ranks in the original suit.
Plaint averments, in brief, are as follows:
i) The plaintiff is the absolute owner of the property described in plaint ''A'' schedule. It had been leased out by his mother under a Lease Deed
dated 30.06.1971 to M/s. Caltex India Limited for a period of 10 years commencing from 01.05.1971 and the agreed rent was Rs. 900/- per
month. M/s. Caltex India Limited constructed the building for running the Petroleum Outlet and the building thus put up by M/s. Caltex India
Limited is described in plaint ''B'' schedule. Later on, M/s. Caltex India Limited was taken over by the first defendant-Hindustan Petroleum
Corporation Ltd., in the year 1976. After the lease expired on 30.04.1981, the first defendant, who had stepped into the shoes of the original
lessee, opted for statutory extension of lease for another 10 years when the plaintiff filed a suit for possession in O.S. No. 760 of 1981 on the file
of the Sub-Court, Coimbatore. The plea for extension was upheld. The extended lease also expired on 30.04.1991. The first defendant failed to
vacate and deliver possession of the property on the expiry of the extended period of lease. It has also committed willful default in payment of
monthly rents for 114 months from 01.04.1991. On 24.05.2000, the plaintiff caused a legal notice to be issued to the first defendant terminating
the lease by 31.08.2000 and calling upon the first defendant to vacate and deliver vacant possession of the site described in plaint ''A'' schedule. In
the said notice itself, the plaintiff offered to pay the value of the superstructure as compensation. On receipt of the notice, the first defendant issued
a reply dated 28.07.2000 with untenable contentions. In view of the same, the plaintiff had no other option than to file the suit for recovery of
possession and for recovery of arrears of rent. Since the second defendant is a licensee appointed by the first defendant for running the petroleum
outlet and he will be interested in any decree or order that may be passed, he has also been made a party in the suit.
ii) The suit ''A'' schedule property is situated at a place strategically important and the amount fixed as rent in 1971 was nothing but a pittance.
Since the first defendant is clinching on to the possession of the property notwithstanding the expiry of the lease and termination of lease by issuing
legal notice, its possession shall be a possession of a trespasser in the eye of law. The second defendant, being a licensee of the first defendant, has
got no independent right against the plaintiff. The plaintiff claims damages for use and occupation at the rate of Rs. 10,000/- per month from
01.09.2000. Hence, a decree should be passed in favour of the plaintiff directing the defendants to vacate and hand over possession after
removing the superstructure put up by the first defendant, directing the first defendant to pay a sum of Rs. 29,766/- towards arrears of rent
together with an interest on the said amount calculated at the rate of 12% p.a. from the date of suit till realization, directing the first defendant to
pay the plaintiff a sum of Rs. 25,000/- as damages for use and occupation till the date of filing of the suit together with an interest thereon at the
rate of 12% p.a. from the date of suit till realization, directing the first defendant to pay future damages for use and occupation at such rates as the
court may determine, from the date of suit till delivery of possession and also directing payment of costs.
The suit was resisted by the first defendant on the basis of averment made in the written statement filed by the first defendant. The averments
contained therein, in brief, are as follows:
i) The plaint averments that the lease period expired on 30.04.1981 and in the suit filed by the plaintiff for possession in O.S. No. 760 of 1981 on
the file of Sub-Court, Coimbatore, first defendant claimed extension of lease for another 10 years as per takeover statue are not admitted. The
building described in plaint ''B'' schedule was put up by the second defendant. In the reply notice sent by the first defendant, by inadvertence it was
wrongly stated that the building was put up by the first defendant. Hence, the suit filed by the plaintiff on the assumption that the buildings belong to
the first defendant is not maintainable. The plaint allegations to the effect that the first defendant committed default in payment of rent from
01.04.1991 and it is in arrears of rent for 114 months are false. The lease cannot be unilaterally terminated at the instance of the plaintiff. The first
defendant was ever willing and keen to pay the rents from time to time. If there was any default, it would be of the own makings of the plaintiff as
he refused to receive the rents whenever the same was tendered by the first defendant. Notice of termination of lease was not in accordance with
law and hence, is not valid.
ii) The vacant land described in plaint ''A'' schedule was leased out by Smt. V. Krishnammal to M/s. Caltex India Ltd., the predecessor in interest
of the first defendant under a registered lease deed dated 30.06.1971 bearing Document No. 2296/71. As per a subsequent lease deed dated
02.12.1971, M/s. Balaji Service Station, the second defendant, as dealers, put up the buildings and in turn they leased out the buildings to Caltex
(India) Ltd.,. By inadvertence the first defendant had taken a plea that they were entitled to the benefits u/s 9 of the City Tenants Protection Act.
But the fact remains that the buildings were put up by the second defendant and were leased out to the first defendant''s, predecessor in title, by the
second defendant. Therefore, the first defendant withdraws the claim for the benefits u/s 9 of the Tamil Nadu City Tenants Protection Act as the
building belongs to the second defendant. The other allegations regarding the strategic importance of the situation of the suit property made with a
view to make it appear that the rents paid was a pittance are all not correct. The plaintiff cannot expect and is not entitled to, more than what has
been agreed as rent in the lease deed. The claim of damages for use and occupation at the rate of Rs. 10,000/- from 01.09.1990 cannot be
sustained. When the plaintiff filed the earlier suit O.S. No. 760 of 1981 on the basis of alleged termination of tenancy on 30.04.1981, the suit was
dismissed. It was held that the first defendant was entitled to have the lease renewed or continued on the very same condition which was originally
agreed. Having made several attempts to terminate the tenancy and recover possession, as 4th attempt, the plaintiff has filed the present suit and it
establishes mala fide on the part of the plaintiff. There exists no circumstance for voluntary deliver of possession. Several attempts made by the first
defendant to obtain renewal on mutually acceptable terms failed because of the non-cooperation of the plaintiff.
As the termination of the lease with effect from 30.08.2000 is illegal and unlawful and the compensation claimed is exorbitant, the plaintiff shall not
be entitled to either possession or damages for future use and occupation. The suit shall be dismissed with costs.
In the written statement filed by the second defendant and the additional written statement of the second defendant, besides supporting the
defence case of the first defendant, the second defendant has stated that second defendant had put up the superstructure in 1969 70 spending
about a sum of Rs. 1,85,000/- and thereafter is in possession and enjoyment of the same; that the lease deed dated 30.06.1971 itself contains a
clause that the lessee there under would be entitled to sublet without even getting the permission of the plaintiff and that hence, the suit should be
dismissed.
Based on the above said averments, the learned trial Judge framed the following issues:
1) Whether the plaintiff is entitled to recover vacant possession of the suit vacant site?
2) Whether there is arrears of rent due to the plaintiff?
3) Whether the plaintiff is entitled to claim Rs. 25,000/- as damages for use and occupation?
4) To what other relief?
The parties went for trial and in the trial, one witness was examined as Pw 1 and four documents were marked as Ex. A1 to A4 on the side of
the plaintiffs, whereas one witness was examined as DW 1 and two documents were marked as Exs. B1 and B2 on the side of the defendants. At
the conclusion of trial, the learned trial Judge, after hearing the arguments advanced on both sides, considered the evidence and upon such
consideration, came to the conclusion that the lease was properly terminated and the plaintiff was entitled to recover possession after removal of
the superstructure and granted the relief of recovery of possession. Regarding recovery of damages for use and occupation, the learned trial Judge
chose to relegate the issues to separate enquiry in an application to be filed for that purpose. Regarding arrears of rent, the learned trial Judge held
that the arrears of rent had been deposited and the same was withdrawn by the plaintiff and hence, the said issue had become infructuous. In
addition, the claim made by the first respondent that the notice sent to the first defendant offering to pay compensation was ineffective since the
superstructure was put up by the second defendant was also negatived holding that the second defendant was not entitled to the benefit of Section
9 of the City Tenants Protection Act. A separate application filed by the second defendant u/s 9 of the City Tenants Protection Act as I.A. No.
727 of 2005 also came to be dismissed.
The second defendant, namely Balaji Service Station represented by its Partner P. Janarthanam filed A.S. No. 69 of 2006 challenging the
decree passed in the original suit. The first defendant, namely Hindustan Petroleum Corporation Limited filed a separate appeal in A.S. No. 89 of
2006 challenging the very same decree. As against the dismissal of I.A. No. 727 of 2005 filed u/s 9 of the City Tenants, the second defendant
Balaji Service Station filed C.M.A. No. 46 of 2006. All the three appeals were filed on the file of the District Court, Coimbatore. Learned II
Additional District Judge, Coimbatore heard both the appeal suits and the miscellaneous appeal jointly and disposed of all the three appeals by a
common judgment dated 09.11.2006. By the said common judgment, the learned lower appellate Judge dismissed all the three appeals, namely
A.S. No. 69 of 2006, A.S. No. 89 of 2006 and C.M.A. No. 46 of 2006.
Dismissal of C.M.A. No. 46 of 2006 has not been challenged. The second defendant did not file any second appeal against the dismissal of his
appeal A.S. No. 69 of 2006. The first defendant, namely Hindustan Petroleum Corporation Limited, alone has chosen to file the present second
appeal against the dismissal of his first appeal A.S. No. 89 of 2006 on various grounds set out in the memorandum of appeal. The second appeal
has been has been admitted on the following substantial questions of law:
Whether the appellant is entitled to claim a second statutory renewal for a period of 20 years from 01.05.1991?
Whether the appellant having exercised the option of statutory renewal in 1981 for a period of 10 years is entitled to claim a further renewal for
a period of 20 years from the date of expiry of the first renewal as per the provisions of Act 17 of 1977?
The arguments advanced by Mr. B. Raghunatha Reddy, learned counsel for the appellant/first defendant, by Mr. T.R. Rajaraman, learned
counsel for the first respondent/plaintiff and by Mr. V. Shanmuga Sundar, learned counsel for the second respondent/second defendant were
heard. The materials available on record were also perused.
Admittedly, the land measuring 10,000 sq. ft. Comprised in T.S. No. 584/4 in Dr. Nanjappa Road, Ward No. 10 in Coimbatore Municipal
Corporation limits, morefully described in plaint ''A'' schedule belongs to the plaintiff (first respondent) Rajendran. The plaintiff''s mother V.
Krishnammal, the then absolute owner of the above said property, let out the same as a vacant site for the purpose of running a petroleum outlet to
M/s. Caltex India Limited for a period of 10 years commencing from 01.05.1971 under a registered lease deed dated 30.06.1971. A certified
copy of the said lease deed registered as Document No. 2296/1971 in the office of the District Registrar, Coimbatore has been produced as Ex.
A2. The following are the main features of the said lease deed:
1) Date of commencement of the lease - 01.05.1971;
2) Term of the lease - 10 years.
3) Monthly Rent Rs. 900/-4) The lease shall be renewable at the option of the lease for a further term of 10 years for a rent to be mutually agreed
upon at the time of renewal
5) Upon such exercise of right of renewal, a fresh lease incorporating terms and conditions found in Ex. A2 lease deed, except the clause regarding
renewal, shall be executed.
6) Lessee shall be at liberty to underlet or grant a licence to use the demised premises or any part thereof to any dealer or agent without any
consent of the lessor.
7) The constructions for the purpose of business shall be put up and erected by the lessee.
8) The lessee shall not assign the demised premises or any part thereof without any previous consent in writing of the lessor and the lessor shall not
withhold such consent unreasonably.
Admittedly, before the expiration of the term of lease fixed in the lease deed, M/s. Caltex India Limited was taken over by the first defendant-
Hindustan Petroleum Corporation Limited, by virtue of Act 17 of 1977. It got subrogated to the rights of M/s. Caltex India limited and the
petroleum retail outlet and service station was run by it through its dealer/agent, namely the second defendant. When the term of lease fixed under
Ex. A2 came to an end in 1981, the plaintiff holding that the lease was determined by efflux of time by 30.04.1981 filed a suit O.S. No. 760 of
1981 on the file of the Sub-Court, Coimbatore. Though the lease deed provided for an option for the lessee under Ex. A2 to seek renewal of the
lease for a further term of 10 years on the same terms excluding the clause regarding renewal, there was no occasion for M/s. Caltex India Limited
to exercise the said option, since before the expiry of the term of lease the same was taken over by Hindustan Petroleum Corporation Limited. Of
course, as a successor corporation, Hindustan Petroleum Corporation Limited (first defendant) could have exercised the option of getting the lease
renewed for a further term of 10 years from 01.05.1981. However, such a renewal of lease was to be made by way of a fresh registered lease
deed for a monthly rent to be mutually agreed upon. There is nothing on record to show that such a renewal lease deed was executed. On the
other hand, the first defendant Hindustan Petroleum Corporation Limited chose to rely on a clause in the takeover statue, namely Act 17 of 1977,
which provided that on the expiry of the lease in favour of M/s. Caltex India Limited, there shall be a statutory renewal on the same terms for a
further period equivalent to the original term of the lease. Thus, the first defendant got the lease renewed statutorily from 01.05.1981 upto
30.04.1991 because the term of original lease under Ex. A2 was only 10 years. Because of the exercise of such option, the earlier original suit,
namely O.S. No. 760 of 1981 came to be dismissed.
It was not the contention of the first defendant in the earlier suit that it was exercising the option for seeking renewal of the lease for a second
term as per the terms of Ex. A2 Lease deed. On the other hand, it was the contention of the first defendant at that point of time that it was entitled
to an automatic renewal of the lease for a further term equivalent to the term fixed in the original lease deed, which was in currency on the date on
which the undertaking was taken over by the first defendant. The lease deed that was in currency at the time of the Act coming into force was the
original of Ex. A2. The term under the said lease was only 10 years. It cannot be interpreted to mean that the original term of the lease was 20
years because there was a clause for renewal at the option of the Lessee under Ex. A2. The recitals found in Ex. A2 does not contemplate
automatic renewal. On the other hand, it gave an option to the Lessee there under to exercise such an option for renewal and it contemplates
execution of a fresh lease deed on such exercise for a rent to be mutually agreed upon and in such fresh lease deed there would not be a clause for
renewal. It is not the case of the first defendant that such a lease deed came to be executed in exercise of the option for renewal contained in the
original of Ex. A2. On the other hand, it was the contention of the first defendant in the earlier proceedings that the first defendant was entitled to
the benefit of the statutory renewal clause found in the takeover legislation. Therefore, the statutory extension commenced on 01.05.1981 and the
extension came to an end by 30.04.1991.
Though the extended period of lease as per the statutory extension ended with 30.04.1991, the plaintiff waited for another 9 years during
which period the first defendant was only a lessee by holding over. Such a lease was terminable at will. The plaintiff issued a legal notice on
24.05.2000 terminating the lease by 31.08.2000 and calling upon the first defendant to vacate and deliver vacant possession of the site described
in plaint ''A'' schedule. A copy of the said notice has been produced as Ex. A3. The said notice was replied by the first defendant under a reply
notice dated 28.07.2006 marked as Ex. A4. In the reply notice, the first defendant, through its advocate, contended that the original lease was
renewed from 01.05.1981 to 30.04.1991 as per the terms of the lease deed; that as per the statutory provision the first defendant was entitled to a
renewal on the same conditions on which the original lease was created; that upto 30.04.1991 there was a renewal of the lease as per the terms of
Ex. A2 lease deed and that thereafter, the first defendant was entitled to a renewal for a further period of 10 years which also shall incorporate a
right of option to the first defendant to have the lease renewed for a further period of 10 years. In effect, the first defendant''s contention was as
follows:
The original lease was for 10 years. As per the conditions in the lease deed, the first defendant exercised its option for contractual renewal of the
lease. Thus, 20 years was the contractual period of lease and thereafter, it was entitled to a renewal for a period of another 20 years by virtue of
the statutory provision providing for statutory renewal of the lease.
Such a contention was rightly rejected by the Courts below. The Courts below have held in clear terms that the original term of the lease as per Ex.
A2 was 10 years and the same was not renewed as per the renewal clause found in Ex. A2 and that on the other hand, when the previous suit was
filed in 1981, the first defendant exercised the option of statutory renewal of the contract. The stand taken by the first defendant was not uniform.
When the earlier suit was filed, it took a stand that on the expiry of the original period of 10 years by 30.04.1981, it was entitled to a statutory
renewal as per the provisions of Act 17 of 1977, which shall mean that the original term of lease stood statutorily renewed for another term,
namely for 10 years. Thus, the statuary renewal would have come to an end by 30.04.1991. The first defendant, had taken a stand in the previous
suit that on the expiry of the first term of lease by efflux of time on 30.04.1981, the lease was renewed for another 10 years from 01.05.1981 to
30.04.1991. According to unnumbered paragraph 5 of the reply notice, the said renewal was a statutory renewal of lease. However, shifting its
stand in the next paragraph, it has stated that after the statutory renewal, the first defendant exercised the option of contractual renewal on
21.04.1991 and thus the lease stood renewed upto 30.04.2001. But the said stand seems to have been given a go by in the written statement. The
first defendant has stated in the written statement that the first defendant stepped into the shoes of the original Lessee; that the first defendant opted
for statutory extension of lease when the lease period expired on 30.04.1981; that when the plaintiff filed a suit in O.S. No. 60 of 1981, the first
defendant claimed the extension of lease for another 10 years as per the takeover statute and that the plea was upheld and further extension of the
lease was recognized by the Court. The above said averment made in Paragraph 4 of the written statement will make it clear that the first
defendant did not exercise the option for execution of fresh lease deed as found in Ex. A2 on the expiry of the initial lease period of 10 years by
30.04.1981. On the other hand, it relied on the provisions found in Act 17 of 1977 for claiming statutory extension. The first defendant has also
made it clear that the statutory extension of lease was claimed for another 10 years from 01.05.1981 and the same was upheld by the Court.
Therefore, the contention of the first defendant that after 30.04.1981 there was a contractual extension for 10 years and after 30.04.1991 there
shall be a statutory extension cannot be accepted.
In the second appeal, the learned counsel for the first defendant/appellant has taken two different stands. First of all, he would state that there
was contractual extension of lease upto 30.04.1991 as per the conditions found in Ex. A2 and hence the statutory extension shall be for another 20
years from 01.05.1991. Yet another submission made by the learned counsel for the first defendant (appellant) is that on the expiry of the first term
of 10 years, the lease was statutorily extended on the very same terms i.e., for another 10 years with an option for a renewal for another 10 years.
The said contention is to the effect that the statutory extension was for 10 years from 01.05.1981 which would expire by 30.04.1991 with an
option for renewal for another 10 years upto 30.04.2001. Both the contentions raised on behalf of the first defendant/appellant are quite untenable
and the shifting stands taken by the first defendant/appellant from time to time will show that the first defendant is inclined to squat on the property
for ever.
In this regard, it is pertinent to note that even after 30.04.2001, the first defendant did not come forward to vacate and hand over vacant
possession. Even after the expiry of another 10 years, namely by 30.04.2011, the first defendant has not chosen to vacate and hand over
possession. Still the learned counsel for the first defendant would contend that the first defendant would not vacate and the plaintiff has to file a
fresh suit for recovery of possession. The unethical and untenable stand taken by the first defendant was rightly rejected by both the Courts below
holding that the original lease was for 10 years which came to an end by 30.04.1981 and the statutory extension of lease by the provision of Act
17 of 1977 was for another 10 years which came to an end by 30.04.1991 and that the termination of lease thereafter by issuance of Ex. A3
notice was perfectly valid.
For all the reasons stated above, it is hereby held that the first defendant/appellant is not entitled to claim a second statutory renewal for a
period of 20 years from 01.05.1991 and that the first defendant having exercised the option of statutory renewal in 1981 for a period of 10 years
is not entitled to claim a further renewal for a period of 20 years from the date of expiry of the first renewal and both the substantial questions of
law are answered accordingly against the appellant/first defendant. Both the substantial question of law on which the second appeal was admitted,
have been decided against the first defendant/appellant. The first defendant/appellant had taken a stand before the Courts below that the buildings
found mentioned in the plaint ''B'' schedule were constructed by the second defendant and the second defendant again leased out the same to M/s.
Caltex India Limited, the predecessor-in-interest of the first defendant/appellant; that hence the notice to quit issued to the first defendant offering
payment of compensation for the superstructure was not in compliance with the requirement of Section 11 of the City Tenants'' Protection Act
insofar as it was not offered to the second defendant and that hence the suit filed based on the defective notice terminating the tenancy was not
maintainable. The said contention was dealt with in detail by both the Courts below and it was held that the second defendant could not claim any
right under the City Tenants'' Protection Act. In fact, the second defendant, who chose to file an appeal before the lower appellate Court, which
was also dismissed by the lower appellate Court, has not chosen to file any second appeal. The attempt made by the learned counsel for the
second defendant/second respondent to support the case of the first defendant/appellant also failed miserably. The application filed by the second
defendant claiming benefit u/s 9 of the City Tenants'' Protection Act was dismissed by the trial Court and the appeal filed against such dismissal in
C.M.A. No. 46 of 2006 on the file of the lower appellate Court was also dismissed. The same has not been challenged. The decision on the
question whether the second defendant is entitled to the benefit of Section 9 of the City Tenants'' Protection Act made by the trial Court and
confirmed by the first appellate Court, has become final. The only ground on which the first defendant has prosecuted the present second appeal is
that the first defendant is entitled to a statutory extension of the lease for 20 more years from 01.05.1991 or 20 years from 01.05.1981, has been
rightly negatived by the Courts below and the questions raised in this second appeal as substantial questions of law have been answered against the
first defendant/appellant. In view of the same, this Court comes to the conclusion that there is no merit in the second appeal and the second appeal
deserves to be dismissed with costs.
In the result the second appeal fails and the same is dismissed with costs.