National Insurance Company vs Sunder Singh Khurana

A suit, for recovery of Rs.l,14,355.32 as use and occupation, And eviction of National Insurance Company from first floor of a house situated

at Vir Marg, Jammu, was filed by the President S. Sunder Singh Khurana, Dharamshala Trust, Jammu.

Plaintiff pleaded that an agreement of tenancy was executed by the parties on 19.08.1987 and the tenancy commenced from 01.12.1985 for a

period of five years. It was also pleaded that by efflux of time, the tenancy expired on 30.11.1990. Condition no. 4(c) of the agreement was relied

upon by the plaintiff to urge that the defendant had not exercised its option for extension of lease and in that view of the matter, defendant was

liable to vacate the premises and pay compensation for use and occupation of the premises. A notice too was served on the tenant on 29.01.1991

informing it that plaintiff will be entitled to receive a sum of Rs. 15,000/ per month for the use and occupation of the said premises from December,

1990 till vacation.

Defendant, in its written statement, inter alia pleaded that option in terms of condition 4(c) of the agreement was exercised by the Company and

the lease stood extended. It was further pleaded that the suit is not maintainable in view of the provisions of J and K Houses and Shops Rent

Control Act, which prohibit passing of decree against defendant/tenant except on proof of grounds mentioned in section 11 of the J and K Houses

and Shops Rent Control Act. Learned Trial Court framed issues, which read thus:

Whether the President of the Board of Trustee have duly authorized the plaintiff to institute suit by virtue of a resolution of the Board ? OPP.

Whether the tenancy between the parties by efflux of time has expired on 30.11.1990? OPP

Whether the defendant has committed default in payment of rent for the month of April 1989 and June 1990 and has also deposited less rent for

the months of Jan. and Feb. 1989 ?

OPP

If issue No.2 is proved in affirmative, whether by virtue of clause 4 (c) of the lease agreement, the defendant has validly exercised the option and

the tenancy stood duly extended ? OPD

Whether a valid notice has been served upon the defendant to terminate the tenancy ? OPP

Whether the plaintiff is entitled to recover Rs. l,l,43,5532NPfromthedefendant with interest, @ 24% p.a., both present use and future ? OPP.

Whether Houses and Shops Rent Control Act is applicable to the demised suit premises ? OPD

Relief? OPP

Learned Trial Court, after appreciating evidence of the parties, decided issues nos. 1, 2 and 4 to 7 in favour of the plaintiff and issue no. 3

regarding default in the payment of rent for the month of April 1989 and June 1990 in favour of the Companytenant. Suit of the plaintiff was, thus,

decreed and a decree for eviction of defendant from first floor at Vir Marg, Jammu, containing an area of 2042 Sq.ft., stairs and lobby, and for the

recovery of Rs. 1,09,623.00 as damages for use and occupation of the premises, was passed in favour of the plaintiff and against the defendant.

Aggrieved by the decree of learned Additional District Judge, Jammu, the tenant has come up in appeal to this Court.

I have heard learned counsel appearing for the parties.

First point urged by Sh. C. S. Gupta, learned counsel appearing for appellant, is that the option was exercised by the appellant under clause 4( c)

of the lease agreement and the lease, thus, stood extended. He questions the finding of learned District Judge to the contrary, as illegal and

unwarranted.

In order to appreciate the submission of learned counsel for appellant, it would be profitable to refer to clause 4 (c ) of agreement of tenancy

dated 19.08.1987. The clause reads, thus:

In the event of the demised premises being wholly or partially destroyed by Civil Commotion, enemy action, earthquake, violence of mob and fire

(non

caused through the negligence of the Lessee of its servants or agents or the act of its servants in the course of employment) at any time during the

subsistence of this lease, then, the lease shall at the option of the Lessee, stand determined or if so called upon by the Lessee, the Lessor shall take

all steps to reinstate repair and Lessee shall be entitled to the whole or proportionate abatement of the monthly rent, as the case may be reinstated

repaired and made fit for occupation of the Lessee.

In case the Lessee shall be desirous of obtaining a renewed lease of the demised premises for a further period of five years and of such desire shall

give at least two months' previous notice in writing to the Lessor provided shall have duly paid the rent and complied with all the covenants and

conditions herein contained on the part of the lessee to be paid observed and performed then and in such case the Lessor may on terms to be

mutually settled between the parties grant a further lease for such period as the parties may agree.

The only evidence which has been led by the appellant in support of the plea and the issue covering this plea is the statement of Sh. R. K. Wali,

Assistant Divisional Manager, National Insurance Company. This witness states that prior to the expiry of period of lease, the Company had on

21.08.1990 vide No.402102/Estb: 90/ 810 A communicated to the plaintiff/respondent that the Company wanted to retain the premises further on

rent but no reply was received thereto. In crossexamination, this witness has stated that the said communication was sent through ordinary post.

Record has not been maintained regarding the posting of this communication by ordinary post. Sh. Ved Parkash Goswami produced by the

plaintiff as his witness states that no extension was sought by the Company by exercising option. This witness has not been crossexamined on the

aforesaid statement. Except these two statements made on behalf of the plaintiff and the defendant, there is no evidence on records to prove the

exercise of option by the appellant in terms of clause 4 ( c) of the agreement of tenancy. Copy of the above communication alleged to have been

sent by the appellant to the respondent too has not been placed on the records, much less proved by the appellant.

In view of the deficient evidence produced by the appellant to prove issue no.4 and the nonproduction of copy of the communication (supra) on

records, the finding of learned District Judge can not be faulted.

That apart, the exercise of option by the appellant was to be followed by the terms and conditions, which were required to be settled between

the parties for the grant of further lease. Neither is there any pleading to this effect nor any evidence to suggest that there was any mutual settlement

between the parties for the grant of further lease for such period as the parties would have agreed. First part of clause 4 (c) can not, thus, be read

in isolation. Clause 4 (c) has to be read as a whole and when read as a whole, it leaves no manner of doubt that mere exercise of option by the

appellant was not enough to attract the operation of clause 4 (c ) and seek renewal in lease, which was contemplated by the parties only if there

was mutual settlement on the terms and conditions of the lease.

In this view of the matter, finding of learned District Judge on issue no.4 is affirmed.

The second point raised by learned counsel appearing for the appellant is that the respondent/plaintiff had accepted rent after the expiry of

period of lease and service of notice, and in mat view of the matter, appellant be treated as a tenant Holding over.

This plea of learned counsel for the appellant does not find mention either in the written statement or in the memo of appeal. In order to

consider this submission of the appellant for permitting him to raise this plea in the appeal, perusal of Section 116 of the Transfers of Property Act,

1977, would be necessary. Section 116 reads, thus:

Effect of holding over. If a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the

lessee, and the lessor or Ms legal representative accept rent from the lessee or underlessee, or otherwise assents to his continuing in possession,

the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for

which the property is leased, as specified in section 106.

Reading of Section 116 of the Transfers of Property Act, 1977, demonstrates that in order to hold as to whether or not a tenant is a tenant

Holding over, some facts are required to be pleaded by a tenant so as to prove that the lessor accepted rent from the lessee, or otherwise assented

to his continuing in possession. The question of status of a tenant as a tenant ""Holding Over"", in my opinion, is essentially a question of fact, which

may be adjudicated upon only if some or the other factual basis is laid for the purpose in pleadings. In the absence of requisite pleading, the plea

sought to be raised by learned counsel for the appellant, can not be so permitted because such a plea would require providing an opportunity of

hearing to the other side. The question of ""Holding Over"" is not a pure question of law. This litigation started in the year 1991. Plea raised by the

appellant at this belated stage can not, thus, be allowed.

The third point, which has been raised by learned counsel for the appellant is that the amount of compensation, for the use and occupation of

the premises, awarded by the learned Trial Court is excessive and no finding has been given by the learned Trial Court that the amount claimed is

reasonable. Learned counsel has relied upon a decision in case titled 'L. Bhagvvan Das Mengi v. Union of India' reported as AIR 1961 Jammu

and Kashmir 39, to support his plea.

I have gone through the judgment cited by learned counsel for the appellant. This judgment, does not support the case set up by the appellant

and rather supports the case of the respondent. The appellant has not led any evidence to show and prove that the amount of compensation

claimed at the rate of Rs. 15,000/ per month is in any way unconscionable or penal. Discussion of learned Trial Court on this issue is well reasoned

and as such does not call for any interference. In the absence of any evidence having been led by the appellant/defendant to suggest even remotely

that the amount claimed by the plaintiff/respondent as compensation for use and occupation of the premises is unconscionable or penal, the plea of

the appellant cannot be considered, much less allowed. The third point raised by Mr. Gupta too fails.

No other point has been urged by learned counsel for the appellant. Findings of learned trial court on issues nos. 1 to 7 are, thus, affirmed.

This appeal is, thus, without merit. It is, accordingly, dismissed with costs assessed at Rupees Three Thousand.

Registry to draw a decreesheet accordingly.