S.A. Rahim vs B. Kanniah Prasad

S. Ramachandra Ayyar, C.J.—About thirty years ago the Respondent obtained on lease from the Petitioner a piece of vacant land

described as No. 90-L Cemetry Road, OH Washermanpet, Madras. It is not now disputed that the conditions of lease permitted the Respondent

to put up a superstructure which he did shortly after taking up the lease. That was prior to the amendment in the year 1955, of the Madras City

Tenants'' Protection Act of 1921 By reason of that amendment tenants similarly situate to the Respondent were enabled to buy, if certain

conditions were satisfied, the demised land in the event of the landlords seeking their eviction. The rent agreed upon under the original lease was

rupees forty per month. In June 1961, that rent was increased by rupees five but the other terms of the lease continued as before.

On 22nd December 1961, the Petitioner with a view to obtain possession of the property gave notice of eviction to the Respondent and also

asked him to deliver vacant possession of the property. He followed up that notice by initiating proceedings u/s 41 of the Presidency Small Cause

Courts Act for ejectment of the tenant. The latter countered this move by applying to the Court to direct the Petitioner to sell the land to him. This

application was contested by the landlord alleging that by reason of the increase in rent in June 1961, a fresh lease must be held to have come into

existence on that date and that the Madras City Tenants'' Protection Act could not apply to such a case. But the Respondent asserted that the old

lease continued in force notwithstanding the, increase of rent and as that lease was prior to the amendment of the Act, he was entitled to purchase

the land. Both the Courts below have rejected the landlord''s contention holding that the lease of the land was prior to the year 1955, and as the

tenant had put up a building thereon he would be entitled to the benefits granted u/s 9 of the Act.

Mr. V.C. Veeraraghavan appearing for the landlord has contended that as rent is a material part of an agreement for lease any alteration of it

could only imply that the earlier lease was given up and a fresh one had been entered into between the parties. Rent is a recompense to the

landlord for the exclusive possession of the property granted to the tenant under a lease in other words it is a payment under a contract for the use

of the property let. It will, therefore, be only one of the terms of the contract granting the lease, It is always be open to the parties to alter that term

of the contract even while the original relationship of landlord and tenant subsists. That means it cannot be implied as a matter of law that once the

parties agree to an alteration in the rent that the previous tenancy has come to an end and a fresh one with the increased rent has come into

existence. In Woodfali on Landlord And Tenant (twenty-sixth edition) (volume I) at page 301, it is stated:

If, whilst a tenant from year to year is in possession of lands under an agreement reserving a certain rent, he agrees with his landlord to pay an

increased rent or reduced rent, this will not necessarily have the effect of then creating a new tenancy.

The rule that a mere change of rent whether it be by way of increase or reduction cannot by itself operate as a new demise has also been

accepted in volume XXIII, Halsbury''s Laws of England (third edition), page 539. One of the cases cited by Halsbury in support of the proposition

italicised above is the decision Delmege v. Mullins (1875) I.R. 9 C.L. 209 Ex. Ch., where referring to an earlier decision it has been stated

If whilst a tenant from year to year is in possession under an agreement reserving a certain rent he agrees with his landlord to pay an increased rent,

this will not have the effect of creating a new tenancy.

Mr. V.C. Veeraraghavan would, however, distinguish the authorities cited above by contending that they related to cases where the tenancy

continued to exist and there was an alteration of one of the condition of the tenancy; but where the tenancy is monthly one (where it is open to the

landlord to evict the tenant by giving him fifteen days'' notice) it is a matter of reasonable inference that an increase in rent implies a termination of

by mutual consent of the previous tenancy and the grant of a new tenancy. There is, however, nothing in the evidence in this case to show that the

parties ever contemplated the termination of the old lease. It must not be forgotten that by June l961, when the increased rent was stipulated, the

Amending Act had come into force; the Respondent must have been conscious of his rights. It is hardly likely that he would have agreed to give up

his previous tenancy which would imply that he is parting with a valuable right that has been secured to him under the Act.

Learned Counsel, then relied upon a decision of the Privy Council in Ranganatham v. Ethirajulu ILR (1940) Mad. 172 , where before the expiry

of a lease for a term an agreement for a fresh lease for a further specified period was entered into at increased rent. It was held that the later

tenancy was a new one and as took place subsequent to the coming into force of the Madras City Tenants'' Protection Act, 1922, the tenant

would not be entitled to the rights conferred thereunder. A careful reading of that judgment shows that in the lease there was a specific provision

for the payment of the price of the superstructure. That would certainly imply an agreement between the parties that the old lease under which there

existed certain rights had terminated. Eeference was made to the decision of King J., in Nayar Varada Pillai Vs. Ghulam Dastagir and Others, . In

that case a formal lease was granted in the year 1924, subsequent to the coming into force of the Act. But the finding of the Court was that the

tenancy commenced anterior to the Act and that the execution of the rent deed did not amount to a creation of a new tenancy.

In Ganesa v. Chellammal ILR (1961) Mad. 777. Kailasam, J., held that the burden will be on the landlord to prove when a variation takes place

as to the terms of tenancy, that the old lease had been given up and a fresh one had come into existence. The next case to which reference was

made is the decision reported in R. Ramaswami Chettiar Vs. Sriperumbudur M. Ramaswami Pillai, . I am unable to see how that decision has any

relevance to the present case for there, the subsequent lease was found to be inadmissible in evidence by reason of the non-registration of the

rental agreement. The learned judges held that the relationship between the parties should be attributed to the original letting and that the rights of

the parties should be adjudged on that basis. These cases only establish that the question whether an earlier lease had been superseded by a new

one is a question of fact to be decided in all the circumstances of the ease. The mere fact that the rent payable under the old lease had either been

increased or reduced by consent of parties cannot necessarily imply that the original relationship of landlord and tenant had been put an end to and

a fresh one established. It will be noticed that the Madras City Tenants'' Protection Act itself permits increase or reduction of rent and to apply to

the Court for that purpose. It must be open to the parties even without going to Court to obtain an alteration in rent by agreement between the

parties. The fact that by reason of such an agreement, the original rent stipulated had been altered cannot necessarily mean that a fresh tenancy had

come into existence between the parties. The conclusion reached by the lower Courts that the lease of land in the instant case was prior to 1955,

and that the building had been put up even before that year is correct. The Respondent will be entitled to buy the land. The Civil Revision Petition

fails and is dismissed. There will be no order as to costs.