V. Natesa Naicker vs P. Arumugha Naicker

Natesan, J.—In this second appeal by the Defendant in a suit for possession of property within the city, with damages for use and

occupation is raised, a somewhat important problem as to the scope of Section 12 of the Madras City Tenants'' Protection Act (III of 1922).

There are a number of decisions on this section but there is an area where its applicability, it is stated, calls for careful consideration.

The facts of the case which at this stage are beyond controversy may first be set out. The Defendant became a tenant of vacant land of an extent

of 1,200 square feet shown as ABFE in the plaint plan some years prior to 1955 under the then owner Krishna-swami Pillai at a monthly rent of

Rs. 3. He put up a hut thereon and was in occupation of it, when Madras Act XIX of 1955 came into force extending the benefit of Madras Act

III of 1922 also to tenancies created prior to the 10th of September 1955. There is no written document to evidence this tenancy or its terms and

the Court below (lower appellate Court) has concluded that the tenancy under which the Defendant entered on the land and put up his hut was a

tenancy from month to month applying the presumption u/s 106 of the Transfer of Property Act, the rent agreed being Rs. 3 per month. While he

was thus in occupation of the land with his own superstructure thereon, a registered lease deed came into existence between him and his then

landlord Krishnaswami Pillai on 25th May 1956. This deed, while continuing the same rent, provided that the tenancy would be for a period of

three years. It is stated in the document that the three year period was granted at the request of the tenant. The rent was made payable by the fifth

of every month, arrears to carry interest. There was prohibition against subletting of the property, and provision for eviction of the tenant without

reference to the period of tenancy fixed, if the rent should be left in arrears for three successive months or there should be default in the payment of

rent under the current laws. Despite the provision for a tenancy of three years, the deed provided that on a month''s prior notice, the tenancy could

be terminated on either side, by the landlord if he found subletting or if he or his heirs required the land, and by the tenant if he did not require the

land. On the termination of the tenancy, the tenant had to deliver vacant possession of the site and on his failure to do so, the landlord could claim

damages for use and occupation for every day of continuance in possession by the tenant. The lease contained provisions against keeping cattle on

the land. If any corporation taxes were payable for the property, the tenant should pay them. The present Plaintiff became the owner of the

disputed site on his purchase from Krishnaswami Pillai, the original landlord of the Defendant, of an extent of 3,600 square feet under the

registered sale deed, exhibit A-2 on 7th February 1958. There is evidence that the Defendant attorned to the Plaintiff after his purchase.

The suit out of which this second appeal arises, was filed by the Plaintiff for possession of the site on default of the tenant in the regular payment

of rent after duly terminating the tenancy in terms of the . lease deed. The Plaintiff charged the Defendant with encroaching on a further extent of

600 square feet but as Defendant disclaimed any encroachment, the dispute centered round only the extent of 1,200 square feet which the

Defendant had taken up on lease. In defence to the action for eviction, it was contended that the Defendant was a tenant entitled to the protection

of the City Tenants Protection Act hereinafter referred to as the Act and that the registered rental agreement, dated 25th May 1956, did not grant

a fresh lease but was only a re-affirmation of the then existing tenancy under the Act which had commenced prior to September 1955. The Plaintiff

put forward a case that the Defendant''s occupation and putting up of the hut was for the first time under exhibit A-1. This has been found against

by both the Courts below on substantial evidence. It has been found by both the Courts that the Defendant''s tenancy of the land had commenced

prior to the 10th of September 1955 and that prior to that date, he had erected the hut in question. There was no application by the Defendant u/s

9 of the Act for a direction to the landlord to sell the land to him, the Defendant contending himself with pleading that there had been no proper and

valid termination of the tenancy u/s 11 of the Act. If the Act applied, the suit for ejectment must be preceded by a notice in conformity with the

provisions of Section 11 of the Act. The notice must be given three months in advance and the demand for surrender of the land and building must

be accompanied by an offer of compensation for the building and trees if any, setting out the amount of compensation. The trial Court accepted the

defence u/s 11 of the Act and so while decreeing the suit for possession in respect of 600 square feet over which no rights were claimed, rejected

the Plaintiff''s claim for possession of the 1,200 square feet now in dispute. In respect of the tenancy, the Plaintiff was given a decree only for the

arrears of rent due. According to the trial Court, there was no new tenancy under exhibit A-1 to deprive the tenant of the protection of the Act.

On appeal, the learned Principal Judge, City Civil Court, held that the tenancy under exhibit A-1 was a fresh tenancy after the Act and that,

therefore, the Defendant cannot claim protection under the Act. The learned Judge pointed out that whereas the former tenancy was from month to

month, the tenancy under exhibit A-1 was for a fixed period of three years and that the duration of the period of tenancy was clearly a material

term of any tenancy. In that view he decreed eviction as prayed for.

There can be no doubt that the tenancy under exhibit A-1 differs materially from the tenancy under which the land was originally occupied.

There are important covenants governing the rights of parties in the new tenancy. There is a prohibition against assignment of the lease and against

sub-letting-any transfer or sub-lease the landlord to evict the tenant after notice. Normally in the absence of contract or usage to the contrary, a

lessee may u/s 108(j) of the Transfer of Property Act, transfer absolutely or by way of mortgage or sub-lease, the whole or any part of his interest

in the property. The original lease was an oral one, a lease of indefinite duration from month to month at a rent of Rs. 3. The question that arises for

consideration is whether notwithstanding the material variations brought about by exhibit A-1 in the tenancy relationship between the parties, the

Defendant could claim the protection of the Act and be considered a tenant as defined in Section 2(4) of the Act.

To summarise now the arguments of the learned Counsel on either side, Mr. M. S. Venkatarama Ayyar, learned Counsel, appearing for the

landlord submits that the effect of the new registered lease under exhibit A-1 is to bring a new tenancy between the parties extinguishing the original

tenancy. Exhibit A-1 is not just a record of the terms of a pre-existing tenancy. While there is a continuity in occupation, fresh terms govern the

occupation. Though the rate of rent has not been changed, even there, there is a stipulation as to interest on arrears at Re. 0-0-3 (old coinage) per

day per rupee. Also there is restriction in enjoyment-keeping of cattle is prohibited. Thus every terms of the old tenancy is given the go by and a

wholly fresh contract of tenancy substituted. Learned Counsel submits that it is well established law, if a lessee accepts a new lease, that by itself is

a surrender of the old lease. The new lease could not be granted unless the old one was surrendered. There is an extinguishment of the lease by

implied surrender on the substitution of the new lease. It is said that the Act applies only to tenancies created before the 10th of September 1955

[See Section 1 (3)] and a tenant who can claim the benefit of the Act in terms of Section 2(4) of the Act must be a person liable to pay rent in

respect of the land under a tenancy agreement expressed or implied prior to that date, or a tenant continuing in possession after the determination

of the tenancy agreement aforesaid or his heirs. In the present case, as there is an express agreement of tenancy no question of holding over under

any prior tenancy arises for consideration and that the liability of the tenant here to pay rent is under the registered tenancy agreement entered into

after the Act. It is not disputed that the liability to pay rent is in terms of the new tenancy. Therefore, it is said that the Defendant is not a tenant as

defined under the Act. For a person to be a tenant under the Act according to the learned Counsel, it is not sufficient that he was a tenant when the

Act came into force. As the benefits under the Act could be claimed only by a person who is a tenant as defined under the Act, he must continue

and remain as a tenant under the Act at the time when he claims the benefits under the Act. The benefits of the Act cannot be claimed by a person

who has covenated for the continuance of his occupation of the site under a new lease after the commencement of the Act as the Act has no

application to tenancies created after the Act.

As against this the arguments of the learned Counsel for the tenant Mr. A. Sundaresan may be summed up thus: First on the merits, there has

been no new tenancy in this case. The registered lease only affirmed and continued the original occupation as tenant. The original relationship

between the parties was not altered. The substance of tenancy is the transfer of the right to enjoy the land. That transfer stands. Only certain terms

mutually agreed upon have been added, to govern the original relationship between the parties. Learned Counsel submits that Section 12 of the

Act precludes the landlord from setting up the plea that by reason of a fresh contract, the tenant had lost the benefits he had become entitled to

under the Act. A lease is nothing but a contract. Exhibit A-1 may be a lease, all the same it is a contract entered into by tenant under the Act. The

effect of the contract is to vary the prior stipulations but here Section 12 read with Section 13 of the Act protects the tenant. To the extent required

to protect the tenant, the provisions of the Transfer of Property Act which may in law bring about a new tenancy despite the continuance of the old

occupation are abrogated.

Section 12 runs thus:

Nothing in any contract made by a tenant shall take away or limit his rights under this Act, provided that nothing herein contained shall affect any

stipulations made by the tenant in writing registered as to the erection of buildings, in so far as they relate to buildings erected after the date of the

contract.

Section 13 provides that the application of the Transfer of Property Act to the extent necessary to give effect to the provisions of the Act be

deemed to have been repealed or modified.

Section 12 secures to the specified class of tenants the benefits the Act intends them to have, by providing that the tenants rights under the Act,

cannot be taken away or limited by contracts entered into by the tenants. The rights under the Act include the right to compensation on ejectment

u/s 3, the fixation of fair and reasonable rent at the instance of the tenant u/s 7A, and the provisions u/s 9 for getting a direction from the Court to

the landlord to sell the land to the tenant if the landlord should seek to evict the tenant and the requirement as to three months notice in Section 11

coupled with an offer by the landlord to pay compensation for the building and trees before any suit is instituted for ejectment of the tenant. Prima

facie it could be said that if the effect of the new tenancy agreement after the Act is to take away completely the rights the tenant had acquired by

tenancy under the Act, recognition of it would be in the teeth of Sections 12 and 13 of the Act. We are not concerned here with the proviso to

Section 12. We are on the main part of the section. Learned Counsel for the landlord submitted that the contracts referred to in Section 12 must

be limited to contracts entered into at the time when the original tenancy was created or contracts before the Act and cannot refer to contracts

entered into subsequent to the Act. I am unable to limit the word contract referred to in Section 12 to contracts made before the Act. Clearly the

reference is to contracts in relation to a tenancy under the Act whether made before or after the Act. Of course, a contract made at the time of the

creation of the original tenancy or terms agreed in the original tenancy agreement before the Act would clearly fall within the expression. The

phrase by a tenant in the words contract made by a tenant in Section 12 appears to me to be descriptive of the person making the contract, and so

without doubt, would include also contracts entered into after the Act came into force. What has now to be examined is whether a contract for

fresh tenancy could be felled by the prohibition of Section 12. It may look like arguing in a circle to say that the tenant cannot be deprived of the

benefits of the Act by any contract made by him which would directly take away the benefits but that he can loose the benefits if the contract is

construed as a new tenancy after the Act. One way of reading Section 12 is to regard it as hitting at contracts made by the tenant in relation to his

tenancy, but not extinguishing the original tenancy, engagements entered into by a tenant which deprive him of the protection of the Act, while

maintaining the tenancy, whether they form part of the original agreement or subsequent engagements. Of course we are assuming that the fresh

contract of tenancy has been properly entered into and is not vitiated by any overreaching, fraud, mistake or mis-representation. Take a case

where the tenant at a particular time finds that if an eviction is sought, he may not find the money for purchasing the land'' but he could not afford to

vacate the premises and move elsewhere. He, therefore, prefers to waive the benefits conferred on a tenant under the Act by taking a fresh

tenancy for a period of ten years. Is the tenant in such a case to be permitted after ten years to resurrect the tenancy he had voluntarily surrendered

and turn it against the landlord after the expiry of the period of lease ? The Act does not prohibit action for eviction by the landlord. Nor does it tie

the tenant to the land whether he wants to stay on there or not-Voluntary surrender of a tenancy under the Act is not prohibited and there is no

question of general public policy being involved to vitiate the acceptance of the surrender by the landlord. A legal protection should not be

regarded as a legal disability. Much could be said on both sides but I find the case-law clear and there is no need for me to make any serious

attempt at solving the problem posed.

I shall first refer to some of the decisions where the paramountcy of the benefits conferred under the Act over contracts entered into by tenants

have been the subject of consideration. In A. Ponnambala Achary Vs. K. Mani, Ramachandra Ayyar J., as he then was, had to consider the

provisions in a lease for surrender of possession by the tenant after the removal of the superstructure. The learned Judge was principally concerned

with the proviso to Section 12 of the Act, in relation to the contention on behalf of the landlord that an agreement to deliver vacant possession after

the removal of the superstructure was a stipulation as to the erection of the building given under the proviso and that, therefore, the landlord could

take advantage of the proviso. Dealing with this contention, the learned Judge observed at page 517 thus:

The Madras City Tenants Protection Act was intended to protect tenants of land who had spent moneys in erecting buildings. This protection was

given notwithstanding the fact that the lease was terminable. Section 12 of the Act will have to be read consistent with the object and provisions of

the enactment.... The provisions of Section 9 of the Act are not subject to any contract between the parties. Section 12 cannot be read so as to

enable the parties to contract out of the statute.

In Vajrapuri v. New Theatres Carnatic Talkies, Limited ILR (1959) Mad. 997 affirmed by the Supreme Court, also a case relating to the

proviso to Section 12 of the Act, the learned Judges who formed the division Bench remarked thus at page 1011:

The first part of Section 12 is in absolute terms. It categorically states that nothing contained in any contract made by a tenant shall have the effect

of taking away or limiting his rights under the impugned Act.

The Court there was concerned with a stipulation in the original contract of lease providing for the tenant surrendering vacant possession after

removing the building constructed by him upon the land. The Supreme Court affirmed this decision in N. Vajrapani Naidu and Another Vs. The

New Theatre Carnatic Talkies Ltd. Coimbatore, and Shah J., who delivered the majority judgment observed thus:

Section 12 of the Act consists of two parts: by the first part it enacts that the rights conferred upon the tenant under the Act may not be taken away

or limited by any contract made by a tenant. Such rights would, amongst others, include the right to claim compensation under Sections 3 and 4

and the right to purchase the land from the lessor by order of the Court u/s 9; by the second part of Section 12, the protection granted by the first

part does not avail the tenant in certain conditions.... Section 12 has manifestly been enacted to effectuate the object of the Act which is set out in

the preamble viz. "" to give protection to tenants who...have constructed buildings on others'' lands in the hope that they would not be evicted so

long as they pay a fair rent for the land "". The legislature has sought thereby to protect tenants against any contractual engagements which may have

been made expressly or by implication to deprive themselves wholly or partially of the protection intended to be conferred by the statute. And the

only class of cases in which the protection becomes ineffective is where the tenant has made a stipulation in writing registered as to the erection of

buildings, erected after the date of the contract of lease. The restriction is therefore made only in respect of a limited class of cases which expressly

attract the description of the stipulation as to the erection of buildings. Having regard to the object of the Act and the language used by the

Legislature, the exception must be strictly construed,... It is true that the operative part of Section 12 protects the tenant against deprivations or

limitation of his rights under the Act and the rights conferred by the Act do not directly relate to covenants relating to erection of

buildings...stipulations concerning erection of buildings in registered leases, or contracts subsequent to the leases, providing for forfeiture on failure

to comply with the terms of the lease relating to the erection of buildings may undoubtedly involve limitation or deprivation of the rights of the tenant

under the Act and to that extent the protection conferred by Section 12 in favour of the landlord may be lost.

It must be noticed that the last part of the citation above given takes in also contracts subsequent to the original lease as falling within the

expression contract in Section 12. Earlier the learned Judge says that the object of the Act is to protect tenants against any contractual

engagements which may have been made expressly or by implication to deprive themselves wholly or partially of the protection intended to be

conferred by the statute.

In Subramania v. M.H.P. Fund. Ltd. ILR (1966) Mad. 381, 387, where again the scope of proviso to Section 12 came up for consideration

with reference to a lease deed which provided for the surrender of possession of the entire property including the superstructure on the expiry of

the lease and fixed the maximum amount payable for the superstructure, following the decision of the Supreme Court in N. Vajrapani Naidu and

Another Vs. The New Theatre Carnatic Talkies Ltd. Coimbatore, a division Bench of this Court observed:

It is very clear that any stipulation to surrender possession of the property with the superstructure, or to accept as compensation any value other

than the value to be determined u/s 3 will not be such a term as will fall within the proviso to Section 12, thereby disentitling the tenant to the

benefits of Section 9 of the Act.

In R. Venkataswami Naidu and Another Vs. Narasram Naraindas, the Supreme Court while restoring the decision of Anantanarayanan J., as

he then was, in Narasram Naraindas alias Purushotamdas Vs. R. Venkataswami Naidu and Others, and reversing that of the division Bench on

Letters Patent Appeal therefrom, Purushotamdas v. Venkataswami ILR 1963 Mad. 649 in a case where there was a lease in writing not registered

containing a covenant not to raise any building but the lessee in contravention of the covenant put up a building, observed that u/s 12 no contract

could be made affecting the section earlier mentioned. Referring to the judgment in the second appeal it is said at page 363:

He (Anantanarayanan J.) also pointed out that Section 13 of the Act specifically provided that the Transfer of Property Act must be deemed to

have been repealed to the extent necessary to give effect to the Act so that there was no scope for harmonising the Act with the Transfer of

Property Act. We entirely agree with the learned Judge''s views.

In none of the decisions above noted, had the Court to consider a case where subsequent to the Act, a fresh lease had come into existence.

The case for the tenant now submitted is that an agreement of fresh lease is nothing but a contract and the effect of the agreement for lease is

not to take away the rights accrued prior. In Pamidi Vedavalli Thayarammal Vs. Junus Chettiar, there was a fresh registered rental agreement after

the Act came into force containing certain stipulations relating to buildings. On the land there were buildings erected before the Act and a

stipulation in the new agreement provided for vacating and delivering the building on the land, but that was specifically in relation to a building not in

existence previously. The learned Judge Pandrang Row J., had to consider the proviso in the case and in the course of the discussion it is observed

at page 847:

I am of opinion therefore that Ex. E (the fresh registered agreement) does in no way alter the nature of the tenancy or deprive the tenants of

anything which but for that agreement they would have been entitled to under the Act;....

...The question is whether the Defendant''s tenancy is a tenancy to which the Act applies and there can be no doubt that the Act applies to that

tenancy. The tenancy was only the continuation of a tenancy to which the Act applied when it came into force.

This decision was reversed on Letters Patent Appeal by the division Bench in Thayarammal v. Junus Chettiar ILR 1939 Mad. 909 but on a

different point based on the finding that the tenant did not own the superstructure on the land. The question now under consideration was not

decided by the division Bench. The learned Judges observed at page 911:

One of the questions argued on behalf of the Appellant is that this tenancy agreement being in the nature of a contract entered into after the Act

came into force, the provisions of the Act cannot apply to it. It is unnecessary to decide this point for there is another and a clearer ground on

which we think the Appellant is entitled to succeed.

But I find that the question has been actually decided in Ranganatham Chetty v. Greaves Cotton and Co. Ltd. 1937 M.W.N. 1315 and the

decision was affirmed by the Judicial Committee in Ranganatham v. Ethirajulu ILR 1940 Mad. 172 (P.C.). In that case there was a lease in favour

of the Appellant granted on the 18th of October 1912 for a period of ten years, the lease to expire on the 30th of September 1922. The Appellant

continued to remain in occupation after the expiry of the lease and on the 1st of February 1923 executed a fresh lease for ten years to take effect

from the 1st of October 1922. The City Tenants Protection Act came into force meanwhile on the 21st February 1922 and the question

considered by this Court was whether the Act was not applicable to the tenancy in question by reason of Section 12 of the Act. This Court refer

ring to Section 12 observed at page 1316:

It seems to me that the fallacy underlying that argument is that whereas S. 1 (iii) says that the Act does not apply to this tenancy it is sought to make

a part of the Act apply to it. The answer to that argument is that, if the Act does not apply to this tenancy, the Act is wholly inapplicable and not

partly. For these reasons, the argument based on Section 12 of that Act must be rejected.

The Judicial Committee in affirming the decision of this Court observed at page 176 thus:

Their Lordships are of opinion that the latter part of the definition of ""tenant"" in Section 2(4) refers to persons who without a tenancy title continue

in possession after the termination of the tenancy, and that the benefit of the remaining sections including Section 12, on which the Appellants

sought to rely, cannot be of avail to the Appellants unless and until they have shown that the tenancy here in question was created before the

commencement of the Act within the meaning of Section 1(3).

Dealing with the argument that the lease of 1923 was merely a continuation of the earlier lease, there having been an earlier verbal agreement

even before the expiry of the earlier lease for a fresh lease for ten years their Lordships observed at page 177 thus:

But their Lordships are clearly of opinion that, though the physical possession was continuous, the possession from 1st October 1922, was

attributable to a new tenancy, which was formally embodied in the lease, dated 1st February 1923, the increased rent thereby provided having

been paid by them from 1st October 1922, in terms of the verbal agreement for a lease. Their Lordships, accordingly, concur in the view of both

the Courts below, that the tenancy here in question was not created before the commencement of the Act, and that the Act does not apply.

No doubt, it looks from the facts of the case set out by the Judicial Committee as if subsequent to the oral agreement the then existing building

had been demolished and a fresh substantial superstructure erected in terms of the new agreement. A reading of the judgment shows that this has

not the least affected the decision in the case. Their Lordships emphasise the fact that the Act is applicable only to tenancies of lands created

before the commencement of the Act and that there could be a fresh tenancy after the Act even if the possession was continuous. From the

argument before the Judicial Committee set out in Ranganatham v. Ethirajulu ILR 1940 Mad. 172 (P.C.) it is seen that the attention of their

Lordships was drawn to the decision of Pandrang Row J., in Pamidi Vedavalli Thayarammal Vs. Junus Chettiar, in support of the proposition that

the second lease affected the right of the tenant under the first and that was a contracting out of the Act which was prohibited. After this decision of

the Judicial Committee in unambiguous terms holding that the expression tenant in the several provisions of the Act conferring rights and benefits to

the tenant refer only to the tenant as defined u/s l(iii) and recognizing the validity of the fresh contract of tenancy after the Act by a tenant under the

Act the contention is no longer open that a fresh lease after the Act should be considered as a contract falling u/s 12 to strike down terms therein

taking away the benefits conferred on a tenant under the Act. It must be taken as settled law that to claim the benefits of the Act, the occupant

when he makes the claim must be a tenant continuing in occupation under a tenancy created before the Act or holding over after the expiration of a

tenancy created before the Act.

A real problem that can arise in a case where there is a fresh rental agreement by a tenant under the Act is whether the subsequent agreement

created a new tenancy between the parties. The answer in the ultimate is one of fact to be arrived at on well established principles. This question

has been discussed at length by Ramachandra Ayyar C.J., in Rahim v. Kanniah ILR (1964) Mad. 348. In that case after the Act, the rent was

increased but in other respects the terms of the lease were as before the Act. There was no new document of tenancy and while holding that 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 lease established, the learned Judge points out that the question

whether the earlier lease had been superseded by the new one is a question of fact to be decided on all the circumstances of the case. The test may

be seen in the following observation at page 349:

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

even while the original relationship of landlord and tenant subsists.

Referring to the decision of the Judicial Committee in Ranganatham v. Ethirajulu ILR (1940) Mad. 172 (P.C.) the learned Judge pointed out

that the stipulations in the new lease therein, implied an agreement between the parties that the old lease under which there existed certain rights

had terminated. As the Madras City Tenants'' Protection Act permitted increase or reduction of rent and provided for application to the Court for

the purpose, the learned Judge said that it must be open to the parties, even without going to the Court, to obtain an alteration in rent by agreement

between the parties and the fact of such an agreement altering the rent could not necessarily mean that a fresh tenancy had come into existence

between the parties.

In R. Ramaswami Chettiar Vs. Sriperumbudur M. Ramaswami Pillai, after the original lease deed, prior to the Act, there was a fresh rental

agreement after the Act, but this latter agreement which required registration had not been registered. Discussing the effect of the new agreement, it

is observed at page 274:

If Ex. P. 1 (the new rental agreement) had been registered and had been executed by the lessor as well as the lessee, it might have been arguable

that after 15th July 1944 (the date of Ex. P. 1) the Respondent was no longer a tenant within the meaning of the Act.... Ex. P. 1, had no legal

effect, as it was unregistered and was not signed by the lessor. That being so, the possession of the Respondent is referable only to his holding over

after the termination of Ex. D. 1 and not to the execution of Ex. P.1.

In Nayar Varada Pillai Vs. Ghulam Dastagir and Others, a decision of King J., the actual deed of lease between the parties was executed in

May 1924 long after the Act had come into force. The learned Judge held that the tenant was entitled to the protection of the Act as his tenancy

had commenced before the Act and the subsequent execution of the lease deed did not amount to creation of a new tenancy.

In Ganesa v. Chellammal ILR (1961) Mad. 777 where a tenant who had been in occupation from 1949 executed a fresh lease in 1956 and

there were no variations in the terms of the tenancy, the learned Judge, Kailasam J., held that there was no new tenancy and that it could not have

been the intention of the Legislature to exclude tenants who continues on the land on the same condition after execution of a fresh lease deed. It

was pointed out that the burden was on the landlord to prove that there had been a variation of the terms of the tenancy.

In City Civil Court Appeal No. 107 of 1950 Somasundarm J., held:

So long as the rent is the same and there was no substantial variation in the terms of the lease, despite the fact that a fresh lease was executed

subsequent to 1922, the tenancy must be deemed to be a continuation of the tenancy prior to the coming into force of the Madras City Tenants

Protection Act.

In Steel v. Cockcroft (1951) 2 All E.R. 175 the question was whether the statutory tenancy of the mother of the Defendant in an action for

possession by the landlord had been substituted by a contractual tenancy that would entitle the Defendant in the action to the benefit of the Rent

Restriction Acts. This depended upon the inference to be drawn on the assumption of the acceptance by the mother of the terms of a letter which

the landlord had written to her. It will be useful to set out somewhat in extenso the observations therein. It was observed at page 177:

The question is whether the fact that a tenant and a landlord agree between themselves for their mutual convenience that the method of payment of

rates shall be varied of itself as a matter of law necessarily destroys the statutory tenancy which was previously in existence (and which in the

present case had been in existence for nearly twenty-five years) and creates a new contractual tenancy. The learned Judge held that it did not, and

I am of the same opinion. When one looks at Section 2, and, particularly at the proviso to Section 2 (3) it is clear that it is implicit in the section

that the legislature is contemplating that that which was done in the present case can be done without amounting to a contravention of the

provisions of the Act. The Court is not compelled to draw the inference that when the parties have taken advantage of a provision of this kind they

must as a matter of law be held to be intending to do that which, in my view, they manifestly were not intending to do, namely to put an end to the

nature of the relationship between them which had existed over this long period and create a new contractual tenancy. The statute indicates that

parties may properly make an arrangement of this kind for a different method of payment of rates-a mere matter of machinery-providing always

that the proper corresponding reduction is made in the rent. That was done in the present case and I agree with the learned Judge in the view he

formed that there is nothing in the circumstances of the case or in the contents of the letter which compels the Court to draw the in ference that the

parties intended to create a new contractual tenancy.

In the present case the earlier tenancy was oral and was a tenancy from month to month. The tenant had entered into a new agreement exhibit

A-1 under a. registered instrument. It was a tenancy for a period of three years, and the tenant was prohibited from subletting or assigning his

tenancy. There was a restriction even in the user of the land-keeping cattle was prohibited. The learned Principal Judge of the City Civil Court finds

that the terms of the new tenancy differ materially from the previous tenancy.

In Woodfall on Landlord and Tenant, twenty-fifth edition at page 1052 it is pointed out:

...neither will new or altered terms necessarily determine an existing tenancy.

The core of a tenancy is the right to enjoy the land, and the duration of the period of tenancy is certainly a material term for a lease, equally the

right as to sub-letting or assignment. Changes in these do change the tenancy. While no new tenancy necessarily follows on a mere increase of rent,

certainly the parties may by agreement express or implied create a new tenancy on the expiration of the old or even during the continuation of the

old tenancy. The old tenancy then gets extinguished on surrender by operation of law. The two tenancies cannot co-exist. As pointed out in

Halsbury''s Law of England, volume XXIII page 686:

A surrender by operation of law takes place when the tenant takes a new lease from the landlord to commence during the term of the old lease,

even though the new lease is for a shorter term than the residue of the old term. This surrender is founded upon estoppel, and takes place without

regard to the intention of the parties The landlord has no power to grant the new lease except upon the footing that the old lease is surrendered,

and the tenant, being a party to the grant of the new lease, is estopped from denying the surrender. Consequently the acceptance of the new lease

operates as a surrender of the old one and the result is the same although the new lease is a future lease ; or although the new lease is by parol and

the old lease was by deed.

From the above citations, it is clear that the question is one for inference from all the facts and circumstances of the case, whether the parties

intended under the new agreement to put an end to the old tenancy and create a fresh tenancy. Here the tenant has secured material advantage

under the new registered rental agreement. There is security of tenure for three years which was not available to him under the old tenancy. The

Madras City Tenants Protection Act does not prohibit the eviction of a tenant. Only if ejectment of the tenant is sought, he gets a right to call upon

the landlord to sell the land to him. One can contemplate a tenant who may not be in a position to buy the land, if that right should be conceded, if

an action for eviction should be taken against him then and there, to prefer to give up the benefits under the Act for a clear tenancy for a particular

period. The document exhibit A-1 says that the tenant wanted the three year period. The validity of the document is not otherwise impugned. In

effect the tenant her(c) had asked to be released from a tenanoy of indefinite duration and wanted tenancy for a period of three years on certain

terms. The landlord consented to that and fresh tenancy was created with all formalities. Having regard to all these features, I see no reason to

differ from the view of the learned Principal Judge of the City Civil Court that there has been a fresh tenancy in the case.

It is argued that the Plaintiff has not discharged the burden that there had been a variation in the terms. This argument is without substance as

the only term earlier agreed upon was as to the rent and all other terms that governed the earlier tenancy have to be presumed from the provisions

of the Transfer of Property Act. The appeal, therefore, fails and is dismissed. In the circumstances there will be no order as to costs. Time for

vacating six months from to-day.

No leave.