1. Misapprehension and confusion as regards elementary principles of law relating to leases has resulted in these proceedings seeing the precincts of this Court. Factually speaking, the legal position was not in dispute in this Court, thanks to the candid and realistic attitude taken by both the learned advocates before me, but my attention was drawn to the fact that the mistake detected in the judgment of the lower Court is being repeated quite frequently by some of the Courts below. This is the only reason I am delivering this judgment just with a view to clarify the position of law, on first principles.
2. The facts relating to the appeal are very simple. The suit premises are situate in an area which was not governed by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter for the sake of brevity referred to as “the Rent Act”), till the date of the institution of the suit and for a long time thereafter. The appellant, who shall be referred to hereinafter as the plaintiff, let out the premises on lease to the respondent, who shall be referred to hereinafter as the defendant, a few years before 1974–76. The grievance of the plaintiff was that the defendant was of thrifty habits, which habits he manifested by displaying chronic reluctance for payment of rent. The plaintiff, therefore, terminated his tenancy by a valid notice under the Transfer of Property Act, 1882, with effect from 31st January, 1976. The validity of the notice of termination of tenancy is not in dispute. By the notice the defendant was called upon to vacate the premises, but his reluctance to pay rent regularly extended also to vacating of the premises. Ultimately, therefore, the plaintiff had to file a suit in the Court of the Civil Judge, Junior Division, Thane, for the defendant's eviction.
It is unnecessary to refer to the defendant's defence. It is enough here to state that the plaintiff's principal contention was accepted by the trial Court. The trial Court found that the suit premises were not governed by the Rent Act at all. The trial Court further found that the notice of termination of tenancy was lawful. There remained, therefore, no defence for the defendant to the suit claim. However, he claimed that he should’ be granted relief against forfeiture. The learned trial Judge held that even though the Rent Act did not apply, on the plaintiff's own showing, the suit was governed by the Transfer of Property Act and if that was so, there was the provision of section 114 very much there in the Transfer of Property Act which gave the Court jurisdiction to grant relief to the tenant against forfeiture on the ground of non-payment of rent. The defendant was, therefore, allowed to deposit all the arrears of rent in the Court, and purported to grant the relief against forfeiture. In this manner the plaintiff's suit for possession was dismissed by the trial Court.
The same view has been taken and the decree of dismissal has been confirmed by the appeal Court. Hence this second appeal.
3. I am somewhat unhappy that the law relating to forfeiture of tenancy has been misunderstood by both the Courts below. I have no objection to the Courts' committing mistakes. We all of us do so at one time or the other; but the question which I am dealing with should normally have been regarded as one of elementary principle. I am not happy that mistakes are committed by confusion of elementary principles.
The legal position to be noted is that there is a world of difference between liability of the tenant for eviction on the ground of forfeiture of tenancy and his liability on the ground of termination of the tenancy by a notice of termination simpliciter. The law relating to determination of tenancy is incorporated in section 111 of the Transfer of Property Act. There are various reasons for determining the tenancy and there exist various modes by which the tenancy comes to an end. If the tenancy is to come to an end by virtue of the principle of forfeiture, what is required under the law is that the tenancy should be for a particular period and the lease deed must contain a clause of forfeiture on the ground of breach of certain conditions of the tenancy. If the breach is committed, the tenancy becomes liable for forfeiture even before the expiry of the agreed period of the tenancy. When the tenant incurs forfeiture, there is a further thing required to be done by the landlord, namely, that the landlord must exercise his right of forfeiture either expressly or by necessary implication. If he exercises the right of forfeiture, then the tenancy comes to an end even before the agreed period of tenancy. In such a case no question of notice of termination of tenancy as provided by section 106 of the Transfer of Property Act arises, although, in certain cases, some kind of notice indicating exercise of the right of forfeiture by the landlord may be advisable. On the other hand, when the lease is not for a particular fixed period but is only a periodical lease like a yearly lease or a monthly lease and if the agreement of tenancy provides that the lease can be terminated by notice of termination as contemplated by section 106 of the Transfer of Property Act, no question of forfeiture as such arises. The tenant might happen to be a paragon of virtue and he might have been paying every single farthing of the rent with strict punctuality and might have been performing every term of the tenancy with enviable devotion; still, if the tenancy is terminated by the notice to quit provided for expressly or impliedly by the agreement of tenancy, the conduct of the tenant and absence of breach of termination of tenancy on his part are irrelevant factors.
This is the position in the Transfer of Property Act. The Legislature had found that sometime this position was abused by some of the rapacious landlords, and that is the reason why the various rent legislations were enacted. The places where the Rent Act applies, the tenants are relieved, to some extent, of this inexorable position under the Transfer of Property Act mentioned above; but for the premises which are not governed by the Rent Act, the position under the Transfer of Property Act continues to subsist. If the lease is capable of being terminated by a notice of termination under section 106 of the Transfer of Property Act, the legal position is not that the tenancy is terminated by forfeiture. Termination of tenancy on account of forfeiture is an entirely different concept, and the Court must bear in mind that the concept of termination of tenancy on account of forfeiture and the concept of termination of tenancy by a notice to quit under section 106 of the Transfer of Property Act are two distinct and independent concepts. In the instant case no doubt the plaintiff-landlady had a grievance against the defendant that he had innate reluctance to pay the rent. It may be also true that the motive behind terminating the tenancy was the tenant's reluctance to pay the rent; but still when the tenant remained in arrears of rent, no such thing as forfeiture was incurred by him, because the tenancy was not for any fixed period, and hence there was no question of there being any forfeiture clause in the agreement. Further, when the landlady terminated the defendant's tenancy on account of her dissatisfaction about him, no forfeiture was enforced by her, once again because there existed no forfeiture clause in the agreement of tenancy. The fact that the tenant had been guilty of non-payment of rent is just one of the historical facts having no relevance whatsoever with the tenant's right to terminate the tenancy.
I will explain the position further. If there existed a forfeiture clause to the effect that on account of breach of certain conditions of tenancy the landlady would be entitled to forfeit the tenancy, any number of notices she might give and still the tenancy would remain unaffected, if no breach of any of the conditions of the tenancy was committed by the tenant. On the other hand, if there existed no forfeiture clause but the landlady was entitled to terminate the tenancy, the tenancy being a monthly tenancy, the notice of termination will be effective in law, even if no breach whatsoever was committed by the tenant. This is the position in law resulting directly from the provisions of section III of the Transfer of Property Act. If this is the position also in the present case, section 114 of the Transfer of Property Act does not come into play at all. The fallacy in the reasoning of the lower Court lies in the fact that merely because there exists section 114 in the Transfer of Property Act, the Court volunteers to give the benefit of the same to the tenant, forgetting that section 114 does not come into play unless the forfeiture is incurred by the tenant in pursuance of a forfeiture clause contained in the agreement of lease. When there is no such clause in the agreement, section 114 does not come into play at all. The position of law is as simple as that.
4. I am told that after the filing of the suit the State Government has in fact issued a notification under the Rent Act and the Rent has been made applicable to these premises. Evidently the subsequent application of the Rent Act would have no effect upon the pending proceedings. Some attempt was made by Mr. Thorat, the learned advocate for the defendant, to contend that the defendant would be entitled to the benefit of the application of the Rent Act to the premises pending this litigation. But he was unable to invite my attention to any part of the notification which made the provisions of the rent act applicable even to the pending proceedings. I do not wish to enter into the question as to whether the State Government had the power to affect or nullify even the pending proceedings by application of the Rent Act to them, because as a matter of fact no such notification has been issued by the State Government making the Rent Act applicable even to these pending proceedings. If that is the position, then the plaintiff's claim in the suit is unanswerable. However, the reason why I pointed out this position was to illustrate the manner in which the inadequacies in the Transfer of Property Act are sought to be remedied by the Rent Act. By virtue of the said notification the future proceedings may be probably governed by the Rent Act, but so far as the present proceeding is concerned, it remains unaffected by the notification.
5. In the result, the appeal is allowed. The decrees passed by both the Courts below are hereby set aside and the plaintiff's suit for possession of the premises is decreed with costs throughout.
Appeal allowed.