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Kapur Chand v. Kanji .

Andhra Pradesh High Court
Aug 14, 1958
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Judgment Summary — Sriniavasachari, J.

Factual and Procedural Background

This matter reached the Bench after a referral by Ansari, J., following a remand by the High Court to the District Court, Adilabad, on the specific issue framed by the High Court:

“Whether the plaintiff has received rents for the months subsequent to April, 1953 and has thereby ??? the notice with the intention of treating the case as subsisting.”

The underlying dispute arose from a suit instituted by Kanji (plaintiff) against Kapurchand (defendant/tenant) for eviction from shop No. 6 at Sirpur. The plaintiff relied on a rent note said to be executed on 1-10-1950 and alleged a tenancy at a rental of Rs. 30/- per [text unclear]. The plaintiff served a notice to quit dated 11-4-1953 calling upon the tenant to vacate by the end of April 1953. The tenant admitted execution of a rent deed but claimed it related to shop No. 7 (not No. 6) and also asserted that he held the premises under a ten-year tenancy.

Procedurally: the trial court dismissed the plaintiff's suit; the appellate court set aside that judgment and decreed the suit; the tenant appealed to the High Court. During the High Court proceedings the case was remanded for further evidence on the specific issue quoted above. After remand, the District Judge recorded further evidence and submitted findings which the High Court reviewed. The defendant (tenant) sought leave to amend his written statement to add an alternative plea (that the landlord had accepted rents after termination of tenancy), and the Court permitted that amendment conditionally (payment of Rs. 50 as costs).

Legal Issues Presented

  1. Whether acceptance by the landlord of rents after expiration of the tenancy and following a notice to quit amounts in law to a waiver of that notice (i.e., an intention to treat the lease as subsisting), within the meaning of Section 113 of the Transfer of Property Act.

Arguments of the Parties

Appellant / Defendant (tenant)

  • Primary plea: that he was tenant under a tenancy for a period of ten years (which, if established, would make him not liable to eviction for that period).
  • Alternative plea (sought to be added): that the landlord accepted rents after the termination of the tenancy and, therefore, had waived the notice to quit.
  • Evidence filed included receipts for rents for the period May to November 1953 which, the defendant relied upon, supported the alternative plea of waiver.
  • It was also argued (by implication in the defendant's case) that amounts received after the alleged termination could be treated as rent during a continuing lease if a ten-year lease were established.

Respondent / Plaintiff (landlord)

  • Contended that the tenant's primary case was that he held under a ten-year lease; therefore the tenant could not fall back on the plea of waiver arising from an acceptance of rent after a notice to quit that assumed a month-to-month tenancy.
  • Argued that waiver, under Section 113, requires consensus ad idem — an express or implied consent of the person to whom the notice was given that the lease was to continue — and such consensus was absent in this case because the defendant asserted a different tenancy (ten years).
  • Submitted that amounts paid after the notice could be treated as rent on the continuing ten-year lease (if that lease were proven), and that acceptance by the landlord is only a circumstance to be considered (not conclusive). The respondent relied upon precedents in support.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
K. Brahmayya v. K.B. Sundaramma, 1948-1 Mad LJ 96; AIR 1948 Mad 275 (FB) Onus on tenant to prove permanent occupancy/right of permanent tenure; effect of withholding rent in agricultural tenancy context. The Court found this decision did not touch the specific point under consideration (waiver by acceptance of rent after notice) and was not helpful to the landlord's case.
Mobd. Sadruddin Khan v. Ghulam Mohiuddin, ILR 1953 Hyd 110; AIR 1953 Hyd 97 Noting that mere acceptance of rent after a notice of ejectment does not automatically amount in law to waiver; intention on the part of landlord is required. The Court treated the decision as exemplifying that acceptance of rent will operate as waiver only if it results from the lessor's intention to treat the lease as subsisting; acceptance might be for use and occupation (damages) rather than rent.
Kai Khushroo v. Bai Jerbai, AIR 1949 FC 124 Requirement for creation of a new tenancy: (1) offer by lessee (continuance in occupation), and (2) definite assent by landlord (e.g., acceptance of rent). The Court relied on the Chief Justice's observation to support the proposition that assent by landlord must be definite and must be acceptance of rent as such to constitute waiver or continuation of tenancy.
Gooderham and Works Ltd. v. Canadians Broadcasting Corporation, AIR 1949 PC 90 (Privy Council) Asserts that whether payment and acceptance constitute waiver is a question of fact; supports the legal position employed in the opinion. The Court cited this Privy Council decision as establishing the correct position that each case requires an inquiry of fact as to whether payment and acceptance amount to waiver.
Navnithlal Chunilal v. Babu Rao (No. 1), AIR 1945 Bom 132 Support for the proposition that payment and acceptance of rent after notice may be evidence of waiver in appropriate circumstances. Cited as supporting authority for the factual inquiry into whether acceptance constituted waiver.
Kamakhya Narain Singh v. Khalik Ahmed, AIR 1927 Pat 305 Discusses doctrine of waiver and circumstances where waiver operates; highlights that waiver presupposes a notice to quit and may not apply where landlord denies issuance of notice. The Court distinguished this decision because, in the Patna case, it was not proved that a notice had been issued; accordingly, the Court held that the Patna decision did not apply to the present facts where notice had been issued.

Court's Reasoning and Analysis

The Court proceeded by reference to the relevant provisions of the Transfer of Property Act and the factual record:

  1. Statutory framework: The Court referred to Section III (clause (h)) and specifically to Sections 106 and 113 of the Transfer of Property Act. Section 106 creates certain presumptions about duration (a tenancy of non-agricultural immovable property is presumed month-to-month in the absence of proof of a longer term). Section 113 provides that a notice given under S. III clause (h) is waived by an act of the person giving it showing an intention to treat the lease as subsisting (illustration (a) describes acceptance of rent after expiry as waiver).
  2. Characterisation of the tenancy: The defendant pleaded a ten-year lease. The Court noted that a lease for a year or more must be registered; the alleged lease deed referred to by the defendant was not registered and the defendant failed to establish the ten-year lease. Consequently, under Section 106, the tenancy was to be treated as from month to month for the residential premises in question.
  3. Effect of the notice and subsequent payments: The plaintiff gave notice to quit on 11-4-1953 calling for vacation by the end of the month; thus the tenancy expired on 30-4-1953. Receipts admitted by the plaintiff demonstrated that the landlord accepted rent month after month from May to November 1953 (seven months) without demur.
  4. Application of Section 113 and precedents: The Court analysed authorities that emphasize that mere acceptance of rent after notice does not automatically prove waiver; rather, the landlord's intention to treat the lease as subsisting must be inferred. The Court accepted the principle that this is a question of fact requiring inquiry (citing the Privy Council and other High Court decisions). The Court rejected the landlord's contention that the tenant's alternate reliance on waiver was unavailable because he originally pleaded a ten-year lease: the Court held the tenant could still rely on waiver if he could establish that the landlord accepted rents after the expiration of the tenancy.
  5. Inference of intention and presumption of continued tenancy: Given the unchallenged receipts and the landlord's successive acceptance of rent for seven months, the Court concluded that this conduct "certainly goes to establish that the landlord intended to treat the terminated tenancy as continuing." Similarly, the tenant's continued payment was evidence that the tenant intended the tenancy to continue. The mutual conduct gave rise in law to the presumption that the parties' relationship was one of landlord and tenant.
  6. Conclusion from analysis: On the facts found after remand, the District Judge's findings were set aside and the trial court's dismissal of the plaintiff's suit for ejectment was restored because acceptance of rent for May–November 1953 amounted to waiver of the notice to quit.

Holding and Implications

Holding: The Court allowed the appeal, holding that the landlord's acceptance of rent for the period May to November 1953 amounted to an intention to continue the old tenancy and therefore constituted a waiver of the notice to quit. Consequently, the suit for ejectment was to be dismissed.

Orders made: The judgment of the District Judge, Adilabad dated 21-12-1955 was set aside and the trial court's judgment (which had dismissed the plaintiff's suit) was restored. The appellant was awarded costs throughout.

Implications: The direct effect is that the tenant could not be evicted on the basis of the notice to quit after the landlord's acceptance of rent for the seven-month period; the plaintiff's ejectment suit was dismissed. The Court treated the question as a fact-based application of Section 113 — it did not purport to lay down a novel principle of law beyond applying established authorities (the opinion explicitly reasoned from existing statutory provisions and precedents). No new, sweeping precedent was announced beyond the application of settled law to the facts.

Appeal allowed. (D.H.Z — as recorded in the original opinion.)

Show all summary ...

Sriniavasachari, J.:— This matter has come before us on having been Referred to a Bench by one of us (Ansari J.). It may also be pointed out that the case was remanded to he District Court, Adilabad, by the High Court after reaming an issue to the following effect:

“Whether the plaintiff has received rents for the months subsequent to April, 1953 and has thereby ??? the notice with the intention of treating the case as subsisting.”

2. After the case was remanded the District Judge ??? the evidence of the parties and has now submitted his finding. The facts briefly are that one Kanji instituted a suit against Kapurchand for eviction from shop No. 6 situated in Sirpur, basing the suit on a rent note said to have been executed by the said Kapur Chand on 1-10-1950. It was alleged that the ??? was taken on a rental of Rs. 30/- per ??? that the tenancy had expired and that a notice as given to quit on 11-4-1953 and inasmuch as the ??? failed to vacate, the present suit was instituted for ejectment. The tenant who is the appellant before us admitted the execution of the rent deed ??? said that it related to shop No. 7 and not shop No. 6.

3. With regard to the premises bearing No. 6, the defendant contended that he was tenant on a rental agreement for a period of 10 years and that the ??? was with-holding that rental agreement deliberately. After trial, the trial court dismissed he plaintiff's suit. On appeal the appellate court ??? aside the judgment of the lower Court and decreed he suit. Aggrieved by this judgment the tenant took the matter in appeal to the High Court and it was at the stage of the hearing before the High Court the case was remanded for further evidence on a fresh issue framed by the High Court on which findings have been given by the lower appellate court.

4. It has to be stated that the stand taken by the defendant tenant in answer to the suit of the plaintiff was that he held the suit premises on a tenancy basis for period of 10 years. This plea of his amounted to this that he was not liable to be evicted for a period of 10 years. It happened that when the case came up before the High Court in Second Appeal the defendant craved leave to amend his written statement in order to add an alternative plea to say that the plaintiff was not entitled to evict him by reason of his having accepted the rents after the termination of the tenancy.

5. This plea was not raised as such in the written statement but the defendant had filed receipts given by the landlord for rents due subsequent to the period after the termination of the tenancy. Therefore there was already material on record for forming the basis for the alternative plea. Although with regard to this question as to whether the landlord received rents subsequent to the termination of the lease the lower appellate Court was directed to enquire into the matter, the matter as to whether the defendant should be allowed to amend his written statement by reason of a further alternative plea was left open.

6. This matter was urged before us and we permitted the defendant to amend his written statement on condition that he paid Rs. 50/- as costs to the landlord, because it was an alternative plea raised by the defendant on the material already on record. We were of the opinion that in the circumstances the defendant could be allowed to raise the plea with the permission of the Court.

7. The only point which requires consideration now by this Court at this stage is as to whether by reason of the landlord having accepted rents after the expiry of the period of tenancy he was debarred from ejecting the tenant. In other words did this act of the landlord in accepting rents after the notice to quit and termination of the tenancy amount in law to ‘waiver’ of the notice to quit.

8. It would be useful to refer to the relevant provisions of the Transfer of Property Act relating to the termination of tenancy and leases. Ordinarily under Section III of the Transfer of Property Act a lease of immovable property is determined by efflux of time limited thereby, on the expiration of a notice to determine the lease or to quit the property leased, duly given by one party to another. This section speaks of other conditions under which a lease could be determined but we are now concerned only with the last clause (h) of S. 111 which speaks of the determination of the lease on giving a notice.

9. It has also to be observed that where there is no period fixed with regard to the lease of a property the law would presume it to be a lease from year to year in the case of agricultural lands and a tenancy from month to month in the case of other property. Where there is no contract to the contrary a lease of immovable property for other than agricultural purposes would be deemed to be a lease from month to month and such lease is terminable on 15 days' notice being given expiring with the end of a month of the tenancy.

10. In so far as this suit lease is concerned the case of the defendant is that it was leased to him for a period of 10 years. A lease for a period of year or more is compulsorily registerable under the law. Admittedly the lease deed referred to by the defendant in his written statement was not registered and the defendant has not been able to establish that there was a lease for a period of 10 years. Where therefore the lease as alleged by the defendant has not been established the lease being of a residential premises the lease would be deemed to be one from month to month as envisaged by Section 106 of the Transfer of Property Act.

11. According to the plaintiff he gave a notice to quit on 11-4-1953, calling upon the tenant to vacate by the end of the month, which meant that the lease expired on 30-4-1953. The defendant herein seeks to rely upon the receipts that have been filed which pertain to the period from May to November, 1953. These receipts are admitted by the plaintiff. The receipts are for rents having been paid by the defendant to the plaintiff month after month. The only short point therefore, is whether the passing of the receipts and accepting of rents would constitute waiver.

12. Section 113 of the Transfer of Property Act says that a notice given under S. III clause (h) is waived with the express or implied consent of the person to whom it is given by an act on the part of the person giving it, showing an intention to treat the lease as subsisting. Illustration (a) to this section is as follows:

“A the lessor gives B the lessee notice to quit the property leased. The notice expires. B tenders and A accepts rent which has become due in respect of the property since the expiration of the notice. The notice is waived”.

13. The provision is analogous to the provision in English Law but with the difference that while in the English Law the consequence of waiver would be that the whole tenancy would be terminated and a new tenancy created, such is not the case under the Indian Law. It only purports to continue the old tenancy. Practically it amounts to the landlord withdrawing the notice to quit.

14. The lower appellate Court has, on the evidence recorded by it subsequent to the remand came to the conclusion that the landlord accepted the rents for the seven months after the notice to quit, with the intention of treating the lease as subsisting. Learned Counsel for the landlord contended that it was not open to the tenant to rely upon this circumstance as amounting to waiver for the simple reason that his case was that he was a tenant under a ten years lease.

15. His argument was that it is only in cases where both parties admit that there was a tenancy from month to month and a notice to quit was given by the landlord and subsequently the landlord accepted the rent that the tenant could fall back upon the plea of waiver. It was also urged that there was no consensus ad idem which was necessary under S. 113. Learned Counsel pointed out that there ought to have been a consent express or implied of the person to whom the notice was given that the lease was to continue.

16. In this case the defendant could not be said to have consented to a continuation of the lease which had expired, for according to him the lease was to continue for ten years. It was also argued that the amounts paid by the tenant would be deemed to be amounts paid by him as rent during the continuation of the period of lease for ten years Finally it was submitted that the acceptance by the landlord could not be conclusive in the matter but was only a circumstance to be taken into consideration for determining whether the old lease continued or not. Learned Counsel relied upon certain decisions in support of this contention.

17. The first case was the case of K. Brahmayya v. K.B Sundaramma, 1948-1 Mad LJ 96 : (AIR 1948 Mad 275) (FB). In our opinion, this case does not touch the point we are now considering. The point that were decided by the learned Judges were the where in a suit for possession of agricultural lane the tenant set up a right of permanent occupancy the onus is on him to prove the existence of such a right and when he fails to prove it, the plaintiff would be entitled to a decree in, the absence of ??? plea that the tenancy was not duly terminated.

18. The other point decided was that by withholding the payment of rent a tenant cannot place him self in the position of a third party and assert that the relationship of landlord and tenant had terminated and he had converted his occupation from a lawful one into an unlawful one so that at the expiration of 12 years the landlord is precluded from recovering the possession of the land. We cannot understand how this case could help the landlord.

19. The other decision that was referred by the Counsel was a decision of one of us (Srinivasa Chand J.) in Mobd. Sadruddin Khan v. Ghulam Mohiuddin ILR 1953 Hyd 110 : (AIR 1953 Hyd 97). Reliance was sought to be placed upon this decision because of the observation in that case to say that

“the mere fact that rent is accepted after the notice of ejectment is given does not amount in lay to a waiver of the right of the landlord to ??? a tenant.”

20. While discussing the question of waiver it was stated in the aforesaid decision that there ought to be express intention on the part of the landlord to ??? his right to eject the tenant.

21. It merely exemplified the position, for example where the lessor demanded rent agreed after the expiration of the notice it would operate as a waive only if it could be shown that the demand was the result of the lessor's intention to treat the lease a subsisting. In many cases it would happen that the landlord accepts amount from the tenant as damage for use and occupation and not as rent. Then the act of the landlord could not be regarded as constituting a waiver of the notice to quit.

22. Likewise a landlord may demand rent after expiry of the period of notice; in such a case it would operate as waiver only if it could be shown that the demand was the result of lessor's intention to ??? the lease as subsisting. The Federal Court was considering about the creation of a new tenancy by the holding over of a lessee in Kai Khushroo v. Bai Jerbai AIR 1949 FC 124. Kania, Chief Justice of India observed as follows:

“On one side there should be an offer of taking a renewed or fresh demise evidenced by the lessee or sub-lessees continuing in occupation of the property after his interest has ceased and on the other side there must be a definite assent to this continuance of possession by the landlord expressed be acceptance of rent or otherwise.”

23. The assent of the landlord which is to be gathered by his acceptance of rent must be acceptance of ??? as such.

24. In the instant case the receipts speak ??? rents having been paid and it is not a casual payment of a rent for one month but successively the landlord has been receiving them for a period ??? seven months without a demur and this circum stance certainly goes to establish that the landlord intended to treat the terminated tenancy as continuing.

25. The point of time to judge the intention ??? the tenant as to whether he also agreed to the continuance of the old tenancy has to be judged is the date following the expiration of the lease. If after this he continues to pay amounts to the landlord month after month by way of rent it would certainly be regarded as evidence of the intention on the par of the tenant to continue the tenancy. By the continuance of the tenant's possession by paying rent and the acceptance of rent by the landlord, the ??? of the parties would be presumed in law ??? be one of landlord and tenant.

26. That this is the position of the law is well established by the decision of the Privy Council in Gooderham and Works Ltd. v. Canadians Broadcasting Corporation, AIR 1949 PC 90. Therefore in very case it has to be determined as a question of act as to whether the payment by the tenant and he acceptance of the amount by the landlord could be regarded as constituting waiver of notice. That this is the correct position of law is supported by decision of the Bombay High Court in Navnithlal Chunilal v. Babu Rao (No. 1) AIR 1945 Bom 132.

27. Learned Counsel for the respondent placed great reliance upon a decision of the Patna High Court in Kamakhya Narain Singh v. Khalik Ahmed, AIR 1927 Pat 305. The learned Judges who decided he case observed that the doctrine of waiver would of apply to a case where a landlord treated the ??? as a tenant from year to year and the tenant ??? his turn asserted a permanent tenancy. They further held that waiver would come in where there was a notice to quit but where the landlord himself ??? having sent a notice no question of waiver could arise.

28. It would, therefore, appear that in that case the landlord denied his having issued a notice to terminate the tenancy. Section 113 of the Transfer of Property Act deal primarily with the waiver of notice to quit. That means that it presupposes the issuing of notice to quit. In the Patna case it was not proved that a notice was issued by the landlord. The learned judges also observed that the doctrine of waiver could not come into play where the tenant asserted permanent tenancy. In this connection it may be stated that in the case before us the tenant did no ??? in his written statement put forward a tenancy of a period of 10 years.

29. But he was not able to establish the same. Under those circumstances, in our opinion, by force of Section 106 of the P. Act, this being a tenancy of a residential building, the tenancy would be deemed to be from month ??? month. Section 106 as has already been stated, follows the drawing of a presumption as above in the absence of a contract to the contrary. Where, there ??? as in this case the contract could not be established, the only natural corrollary would be that the ??? would be treated as a tenancy from month ??? month.

30. If that is the position, then we find that in this case a notice to quit was issued and after the expiry of the period of notice, the landlord received from he tenant sums of money on account of rent for the period of seven months.

31. Under these circumstances we think that the decision of the Patna High Court cannot apply to the facts of this case. We do not think that the learned Judges meant to lay down that ??? all cases where the tenant sets up a tenancy other than the one contemplated by Section 106 of the Transfer of Property Act, here could be no question of waiver.

32. We have made the position clear that even where the tenant sets up the permanent tenancy or lease for a particular period or in contradistinction ??? a tenancy from month to month or from year to ??? and is not able to establish that, he would not ??? debarred from putting forward the plea of waiver ??? he can establish that the landlord accepted rents subsequent to the expiration of the period of tenancy.

33. We are, therefore, of the opinion that the acceptance of the rent by the landlord for the period from May to November, 1953 amounts to an intention to continue the old tenancy and as such the appellant could not be evicted on the termination of the period fixed in the notice to quit. The present suit for the ejectment of the tenant is, therefore, liable to be dismissed. We, therefore, allow this appeal, set aside the judgment of the District Judge, Adilabad, dated 21-12-1955 and restore that of the trial court. The appellant will be entitled to his costs throughout.

D.H.Z

34. Appeal allowed.