Citation Codes

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citation codes

Case Number

Second Appeal No. 358 of 1973

Judges

O.P Trivedi, J.

Acts

Section 20 of the U.P Act 13 of 1972, hereinafter referred to as the Act.
SECTION 116 TRANSFER OF PROPERTY ACT
Section 39 of the U.P Act 13 of 1972
provisions of U.P Act III of 1947
provisions of U.P Act 13 of 1972
SECTION 5 LIMITATION ACT
U.P Act 13 of 1972

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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

This is a defendant's appeal arising from a suit for ejectment and damages for use and occupation filed by the respondent, Babu Ram. The respondent's pleaded case was that the disputed shop had been let to the appellant for a fixed period of one year at an annual rent of Rs. 1,000, paid in advance; the tenancy ended on 1 September 1970 but the appellant allegedly remained in wrongful possession. The respondent claimed damages for the period 2-9-1970 to 15-11-1971 at the rate of Rs. 1,000 per year. The suit was filed on 16-11-1971.

The shop lay in a Notified Area to which the provisions of U.P. Act III of 1947 did not apply. The appellant defended on the ground that provisions of U.P. Act III of 1947 (and/or the U.P. Act 13 of 1972) were applicable and that eviction could not be ordered except on grounds in Section 20 of U.P. Act 13 of 1972. The trial court rejected the defences, held U.P. Act 13 of 1972 inapplicable, found the appellant had not complied with the deposit requirement of Section 39 within the statutory one-month period, and decreed ejectment and damages. On appeal the decree was affirmed by the lower appellate court.

In the trial court the appellant also pleaded that during the pendency of the appeal the respondent accepted Rs. 2,200 on 31-10-1972 (receipt Ext. A-1) as rent for 26 months prior to that date; the appellant argued this acceptance created a new lease by holding over under Section 116 of the Transfer of Property Act, relying on Bhawanji Lakhamshi v. Himatlal Jamnadas Dani. The lower appellate court rejected that contention.

Legal Issues Presented

Whether the statutory one-month period for making deposits under Section 39 (read with Section 40) of U.P. Act 13 of 1972 can be extended or condoned by the court under Section 5 of the Limitation Act (having regard to Section 35 of the U.P. Act 13 of 1972).
Whether acceptance by the landlord of rent after the determination of the lease (receipt Ext. A-1 for Rs. 2,200 dated 31-10-1972) operated as a definite consent to the appellant's continuing in possession and thereby created a new tenancy by holding over under Section 116 of the Transfer of Property Act.

Arguments of the Parties

Appellant's Arguments

The statutory one-month period for depositing the amount specified by Section 39 could be extended, and the court could condone the delay by invoking Section 5 of the Limitation Act (arguing this was permissible despite Section 35 of the U.P. Act 13 of 1972).
The acceptance by the respondent of Rs. 2,200 on 31-10-1972 (Ext. A-1), which was expressly received as rent for 26 months up to that date, referred to rent for the period after expiry of the original tenancy and thus indicated landlord consent; accordingly a new tenancy arose by holding over under Section 116 of the Transfer of Property Act (relying on Bhawanji Lakhamshi v. Himatlal Jamnadas Dani).

Respondent's Arguments

The respondent relied upon the Supreme Court decision in Bhawanji Lakhamshi v. Himatlal Jamnadas Dani, as interpreted by the lower appellate court, to resist the contention that acceptance of rent after expiry automatically created a new tenancy; the lower court had rejected the appellant's holding-over plea.
The respondent's initial position (as plaintiff) was that the statutory protection (U.P. Act 13 of 1972) was not applicable such that eviction was permissible where the appellant had not complied with Section 39's deposit requirement within the statutory period.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bhawanji Lakhamshi v. Himatlal Jamnadas Dani, (1972) 1 SCC 388 : AIR 1972 SC 819	Section 116 requires (a) an offer of taking a new lease evidenced by remaining in possession after term and (b) definite consent by the landlord (e.g., acceptance of rent) to the continuance of possession.	The court applied the test formulated in this case, found both conditions present here (appellant remained in possession after expiry and the landlord accepted rent by Ext. A-1), and concluded a new tenancy was created by holding over.
Sri Chand Gupta v. Madan Lal, (1973 All LJ 635)	Section 5 of the Limitation Act cannot be used to condone delay in making deposits required under Sections 39 and 40 of U.P. Act 13 of 1972.	The court followed this decision and held that the statutory one-month period under Section 39 could not be extended by invoking Section 5 of the Limitation Act.
J.C. and M. Mart v. Assistant Commissioner, (1968 All LJ 547) : AIR 1969 All 200 (Full Bench)	Full Bench authority supporting the principle that Section 5 of the Limitation Act cannot be used to condone delays under the U.P. Act deposit provisions.	The court relied on this Full Bench decision as the basis for the Sri Chand Gupta ruling and as supporting authority to reject the appellant's argument for extension of the deposit period.
Ganga Dutt Murarka v. Kartik Chandra Das, AIR 1961 SC 1067	In the context of statutory tenants (protected by separate statutory law), mere acceptance of amounts equivalent to rent after expiry cannot be treated as evidence of a new tenancy because the landlord may be compelled to accept rent.	The court distinguished this authority as inapplicable: the appellant was not a statutory tenant and thus the rationale that landlords are compelled to accept rent did not apply here.
Davies v. Bristow, (1920–3 KB 428)	When a landlord has no choice but to accept rent (because of statutory restrictions), acceptance does not signify assent to renewal of tenancy.	Referenced by the court as a supporting illustration of the principle in Ganga Dutt Murarka; the court found it inapplicable because the appellant was not under a statutory tenancy that compelled the landlord to accept rent.

Court's Reasoning and Analysis

The court proceeded in two principal analytical steps corresponding to the two central legal questions.

1. On condonation of delay for deposits under Section 39:

The appellant argued the one-month statutory period for deposits (Section 39, read with Section 40) could be extended by the court under Section 5 of the Limitation Act, having regard to Section 35 of the U.P. Act 13 of 1972.
The court rejected that contention. It relied on a directly applicable precedent (Sri Chand Gupta v. Madan Lal) which had held Section 5 could not be used to condone delay in making the required deposits under Sections 39 and 40. That decision rested on an earlier Full Bench decision (J.C. and M. Mart v. Assistant Commissioner).
On that basis the court concluded the statutory one-month period could not be extended by the court by invoking Section 5 of the Limitation Act, and therefore the appellant's contention on this point failed.

2. On creation of a new tenancy by holding over under Section 116 of the Transfer of Property Act:

The appellant relied on Ext. A-1 (receipt dated 31-10-1972 for Rs. 2,200), which expressly recorded payment as rent for 26 months up to 31-10-1972 — a period plainly including rent after the expiry of the original tenancy (which expired on 1-9-1970).
Section 116 provides that if a lessee remains in possession after determination of the lease and the lessor accepts rent or otherwise assents to his continuing in possession, the lease is renewed (year-to-year or month-to-month as appropriate).
The court examined the Supreme Court's formulation in Bhawanji Lakhamshi, which requires both an offer (remaining in possession) and a definite consent by the landlord (such as acceptance of rent). Applying that test here, the court found both elements present: the appellant remained in possession after the term expired, and the landlord accepted rent by Ext. A-1.
The court acknowledged the Supreme Court's caution that mere acceptance of amounts equivalent to rent will not always evidence a new tenancy where the landlord is compelled to accept rent (e.g., statutory tenants). The court carefully distinguished that line of authority (including Ganga Dutt Murarka and Davies v. Bristow) on the ground that the appellant was not a statutory tenant.
The court explained that at the time the suit was instituted the provisions of U.P. Act III of 1947 were not applicable to the building, and even after extension of U.P. Act 13 of 1972 to the Notified Area the appellant had not acquired full statutory protection except potentially by timely compliance with Sections 39 and 40. Because the appellant failed to make the statutory deposit in time, he did not obtain the statutory tenancy protections that would have compelled the landlord to accept rent.
Consequently, the court concluded that the acceptance of rent in Ext. A-1 constituted definite consent to the appellant's continuance in possession and satisfied Section 116, giving rise to a renewed tenancy by holding over.

On these combined bases the court found that a decree for eviction could not be sustained on the footing that the tenancy had ended by efflux of time and that the landlord-tenant relationship had ceased.

Holding and Implications

Holding: APPEAL ALLOWED. The appeal is allowed; the judgment and decree of the District Judge, Sitapur dated 27th September 1973 is modified and the respondent's suit for ejectment is dismissed.

Implications:

Direct effect on the parties: The appellant is held to have become a tenant by holding over under Section 116 of the Transfer of Property Act as a result of the landlord's acceptance of rent recorded in Ext. A-1; accordingly the ejectment decree is set aside (the suit for ejectment is dismissed). The remainder of the District Judge's decree (as to other relief) is confirmed, and the appellant is awarded proportionate costs of the appeal from the respondent.
The court distinguished precedents concerning statutory tenants and made clear that those authorities were inapplicable because the appellant did not enjoy full statutory tenancy protection (having failed to comply with Section 39's deposit requirement within the statutory period). Thus the decision turns on application of Section 116 to the undisputed receipt and the timing of events in this case.
No broader novel legal principle was announced beyond applying settled authorities: the court applied existing precedent (Bhawanji Lakhamshi and the All-India/All-LJ authorities on limitation/condonation) and distinguished inapplicable authority; the decision resolves the parties' rights in the circumstances described but does not purport to create a new precedent beyond that application.

Final line from the opinion: "I allow the appeal ... Rest of the decree of the District Judge is confirmed. The appellant shall get proportionate costs of this appeal from the respondent. Appeal allowed."

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Deep Chand v. Babu Ram

1. This a defendant's appeal and arises from a suit for ejectment from a shop and for damages for use and occupation which was filed against him by the respondent Babu Ram. The plaintiff-respondent's case was that the shop was let out to the appellant for a fixed period of one year on an annual rental of Rs. 1000/- which was paid in advance. The appellant's tenancy came to an end on 1st September, 1970 and yet the appellant did not vacate the shop and continued to remain in possession wrongfully. There was thus a claim for damages for use and occupation from 2-9-1970 to 15-11-71 at the rate of Rs. 1000/- per year. It may be mentioned here that the suit was filed on 16-11-71. The shop lies in a Notified Area to which the provisions of U.P Act III of 1947 did not apply. The defence was that the provisions of U.P Act III of 1947 were applicable and that in any case the defendant could not be evicted except on grounds mentioned in Section 20 of the U.P Act 13 of 1972, hereinafter referred to as the Act. All the pleas were rejected by the trial Court on the finding that U.P Act 13 of 1972 was not applicable and that the appellant was not entitled to the protection afforded by Section 39 of the U.P Act 13 of 1972 also because the amount required by Section 39 was not deposited by the appellant within one month of coming into force of that Act and its extension to the Notified Area in question, and the respondent was consequently awarded a decree for ejectment and damages for use and occupation. The defendant appealed but met with no success and the decree of the trial court was affirmed. In the trial court one additional plea was raised for the appellant namely that during the pendency of the appeal in that court on 31-10-1972 the landlord-respondent had accepted Rupees 2,200/- as rent for the shop from the appellant for 26 months prior to the said date and issued a receipt Ext. A-1. It was urged that by acceptance of rent for the period subsequent to the expiry of the tenancy a new lease had been created in favour of the appellant and he had become a tenant by holding over. In support of this submission reliance was placed for the appellant on the case of Bhawanji Lakhamshi v. Himatlal Jamnadas Dani, ((1972) 1 SCC 388 : AIR 1972 SC 819) but the lower appellate court rejected the plea.

2. I have heard Sri M.K Seth appearing for the appellant and Sri Hargovind Dayal Srivastava appearing for the respondent. The first submission of the learned counsel is that although the courts below found that the money, as required by Section 39, read with Section 40 of the Act was deposited by the appellant beyond one month from the date of commencement of this Act, the lower appellate court erroneously held that this statutory period could not be extended by the court under Section 35 of the Act. I find no force in the submission that the statutory period of one month for making deposits laid down under Section 39 of the Act can be extended by the court under Section 5 of the Limitation Act having regard to the provisions contained in Section 35 of the Act. This question came up directly for consideration before this Court in Sri Chand Gupta v. Madan Lal, (1973 All LJ 635) where it was held that Section 5 cannot be pressed into service to get the delay in making the requisite deposits under Sections 39 and 40 of the Act condoned. This decision is based on the Full Bench decision of this Court in J.C and M. Mart v. Assistant Commr., 1968 All LJ 547 : (AIR 1969 All 200) (FB). I am in respectful agreement with the view taken in the aforesaid case and, therefore, hold that the statutory period of one month laid down in Section 39 cannot be extended by the court with the aid of Section 5 of the Limitation Act having regard to the provisions contained in Section 35 of the Act. This submission is rejected.

3. The next submission of the learned counsel is that a new tenancy had been created in favour of the appellant by holding over under Section 116 of the Transfer of Property Act as a result of acceptance of rent by the respondent-landlord from him during the pendency of the suit. Ext. A-1 is receipt dated 31-10-72 for Rs. 2,200/- issued by the respondent. By this receipt the respondent expressly received payment of Rs. 2,200/- on account of rent for 26 months upto 31-10-72. The tenancy expired on 1-9-70. Therefore the sum of Rs. 2,200/-, payment of which was received by the landlord from the appellant on 31-10-1972 clearly related to the rent of this shop after expiry of the tenancy. Section 116 of the Transfer of Property Act provides that “if a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, 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.”

4. For the respondent reliance was placed on a Supreme Court decision in Bhawanji Lakhamshi v. Himatlal Jamnadas Dani, ((1972) 1 SCC 388 : AIR 1972 SC 819). This decision of the Supreme Court was in my judgment not correctly appreciated by the lower appellate court. In para 9 of this report the Supreme Court observed: “What the section contemplated is that on one side there should be an offer of taking a new lease evidenced by the lessee or sub-lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise”. Applying this test to the present case it appears that both the conditions formulated by the Supreme Court are present in this case. There was evidence of an offer of taking a new lease on the part of the lessee evidenced by remaining in possession of the property after expiry of the term and on the other side there is evidence of definite consent on the part of the respondent-landlord to the appellant's continuance in possession, the same being expressed by acceptance of rent on 31-10-1972. That being so, the conditions posited by Section 116 of the Transfer of Property Act were fully satisfied in this case and the appellant became a tenant of the respondent in the disputed shop by holding over. In column I at page 820 of the same report referring to its observations in the case of Ganga Dutt Murarka v. Kartik Chandra Das, (AIR 1961 SC 1067) the Court cautioned that mere acceptance of amounts equivalent to rent by a landlord from a tenant in possession after the lease had been determined either by efflux of time or by notice to quit cannot be regarded a new agreement of tenancy. In Bhawanji Lakhamshi v. Himatlal Jamina Das, (Supra) also the Supreme Court had referred with approval to observations made in Davies v. Bristow, (1920-3 KB 428) to the following effect “where a tenant of a house to which the Increase of Rent and c, (War Restrictions) Act applies, holds over after the expiry of a notice to quit, and pays rent, the landlord is not to be taken by accepting it to assent to a renewal of the tenancy on the old terms, for he has no choice but to accept the rent, he could not sue in trespass for mesne profits for the tenant notwithstanding the notice to quit, shall not be regarded as a trespasser so long as he pays the rent and performs the other conditions of the lease”. In Ganga Dutt Murarka v. Kartik Chandra Das, (supra) the court considered the position of a statutory tenant who was granted protection from eviction by the provisions of some statutory law. In the case of a statutory tenant of this character mere acceptance of amount equivalent to rent by a landlord from the tenant in possession after expiry of the lease cannot be regarded as evidence of creation of a new tenancy by holding over because such a landlord has no option but to accept the rent because he knows that the tenant has acquired a statutory tenancy and has a right to continue in possession until evicted in accordance with the condition of tenancy.

5. These observations, however, are inapplicable to the present case, firstly because the status of the appellant is not that of a statutory tenant. The suit out of which the present appeal arises was filed at a time when the provisions of U.P Act III of 1947 did not apply to this building and even though the provisions of U.P Act 13 of 1972 were extended to the Notified Area in which the disputed shop lies, no protection against the eviction was extended or enured to the appellant except to the limited extent provided by Sections 39 and 40 of the Act. In other words by the force of Sections 39 and 40 of the Act the tenant could save himself from eviction only if he made deposit of amounts required by Section 39 within time laid down under that provision. If he fails to make deposits within such time, then he is not protected from eviction. The result, therefore, clearly is that the appellant does not become statutory tenant because from the fact that the provisions of the Act are extended to the Notified Area in question, his rights and liabilities must be governed by the law prevailing at the time of institution of the suit out of which this appeal arises. I, therefore, hold that even on the basis of observations made by the Supreme Court in the case of Bhawanji Lakhamshi v. Himatlal Jamnadas Dani (supra) a new tenancy will be deemed to have been created in favour of the appellant by holding over under Section 116 of the Transfer of Property Act and as upon this view the appellant has again become a tenant of the respondent a decree for eviction cannot be granted against him on the footing that his tenancy has come to an end by efflux of time and the relationship of landlord and tenant has ceased. It is on these conclusions that the appeal is entitled to succeed.

6. I allow the appeal and modify the judgment and decree of the District Judge, Sitapur, dated 27th September, 1973 and dismiss the respondent's suit for ejectment. Rest of the decree of the District Judge is confirmed. The appellant shall get proportionate costs of this appeal from the respondent.

7. Appeal allowed.

Deep Chand v. Babu Ram

Concise Analytical Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Deep Chand v. Babu Ram

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