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K. Nasir Basha And Another v. Turukkan Chatram Charities .
Factual and Procedural Background
The suit was for ejectment. The plaintiff (a trust) alleged ownership of the suit property and that the first defendant (lessee) was a monthly tenant under the plaintiff, with the lease providing that the first defendant should vacate on 30 days' notice. The plaintiff issued a notice determining the tenancy on 26-01-1968; the first defendant denied the tenancy and later transferred or purported to transfer the lease to the second defendant, who was impleaded by the plaintiff. The plaintiff denied the alleged transfer and other contentions by the defendants.
The first defendant contended that he transferred the lease to the second defendant (21-11-1967), that the lease was permanent and not terminable against the wishes of the creator of the trust, that compensation was due for alleged improvements, that the notice to quit was defective, and that the suit suffered from misjoinder. The second defendant claimed to be the tenant, alleged no valid notice of termination had been given to him and that he paid Rs. 3,000 for the transfer and that amount should be paid to him by the plaintiff.
The trial court found in favour of the plaintiff: Ex. A-1 (lease) provided for termination by 30 days' notice; Ex. A-2 (notice to quit) validly determined the tenancy of the first defendant; Ex. B-12 (lease in favour of the second defendant) was fabricated; no compensation was payable to the defendants; and there was no misjoinder. The trial court directed delivery of vacant possession within a month from 23-10-1972.
The defendants appealed to the Sub-Court, Chingleput, which confirmed the trial court's findings (A.S. 116 of 1973). The defendants then preferred this second appeal to the court that produced the present opinion.
Legal Issues Presented
- Whether the lower appellate court erred by not discussing the evidence on record as the final court of facts.
- Whether Ex. A-2 (the notice to quit) is valid in law, particularly in view of Section 106 of the Transfer of Property Act and the requirement that a notice must expire with the end of a month of the tenancy.
- Whether the suit is bad for misjoinder of causes of action or parties (particularly regarding the position of an assignee of the lessee).
- Whether the lease (Ex. A-1) operates as a "contract to the contrary" under Section 106 of the Transfer of Property Act so that the statutory notice requirements do not strictly apply.
Arguments of the Parties
Appellants' (Defendants') Arguments
- The lower appellate court did not adequately discuss or assess the evidence on record and, therefore, its decision should be set aside.
- Ex. A-2 (the notice to quit) is invalid because Section 106 requires that notice must expire with the end of a month of the tenancy — the notice in this case terminated the tenancy by the end of 30 days after receipt and did not comply with the requirement to expire with the end of a tenancy month. Counsel cited multiple decisions to support this proposition.
- The suit is bad for misjoinder of causes of action and parties; the first defendant claimed he is an unnecessary party as the second defendant alone is the tenant; alleged transfer of lease to second defendant meant notice should have been to him.
- Substantive contentions by the first defendant included that the lease was transferred to the second defendant (21-11-1967), that compensation is payable for improvements, that the lease was permanent and could not be terminated against the creator's wishes, and that the property was a minor inam and the defendants were entitled to patta (referral to Settlement Tahsildar alleged).
- The second defendant specifically alleged that he is the tenant, that no valid notice of termination was given to him, and that he paid Rs. 3,000 for the transfer and that this amount should be paid to him by the plaintiff.
Plaintiff-Respondent's Arguments
- The evidence and trial court discussion are before the appellate court and the present court, and the matter can be decided on the record.
- Ex. A-1 constitutes a contract to the contrary to Section 106 of the Transfer of Property Act, so Section 106 cannot be strictly enforced in the facts of this case; accordingly Ex. A-2 is a valid notice in law.
- There is no merit in the contention of misjoinder of parties or causes of action; the suit and notices are appropriate and the plaintiff's claim should not be defeated on those grounds.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Dixon v. Bradford and Dt. Railway Servants Coal Supply Society, 1904-1 KB 444 | Where agreement mentioned a period (three months) to quit in an oral tenancy, the period must expire with the year (or tenancy period); tenancy was not duly determined where this did not occur. | Used as authority for the proposition that a contractual notice period must expire with the relevant tenancy period; cited as a leading authority followed by other Indian decisions. |
| Beevi Umma v. Allath Shamu Menon, 3 Mad LW 189 (AIR 1917 Mad 141) | Where agreement provided delivery of possession "on demand", such a provision did not constitute a contract to the contrary under Section 106 because it did not mention the time at which demand should be made; the demand must conform to Section 106. | Cited to distinguish cases where words were "on demand" from the present facts; court found no conflict between this decision and others and relied on its limited proposition about "on demand". |
| Chunilal v. Chunilal, AIR 1923 Lah 659 | Affirms the principle in Dixon v. Bradford regarding the requirement that notice periods tie into the tenancy period. | Noted by the court as laying down the same principle as Dixon; supports the body of authority about notice-expiry rules. |
| Baidyanath v. Onkarmal, AIR 1938 Cal 656 | Held that the only way to determine the tenancy was by observing the provisions of Section 106 and that, in that case, the lease was not terminated by the notice given. | Referred to as authority supporting the strict application of Section 106 where the agreement does not validly derogate from it. |
| U.A. Mfg. Co. v. Motilal Bombay Mills, AIR 1943 Bom 306 | Provision that either side will give one clear month's notice does not affect the rule that the notice must expire with the expiration of the tenancy. | Followed the Dixon principle; cited to demonstrate the line of decisions holding that contractual one-month notices must still expire with tenancy month ends. |
| Mukanchand v. Gulabchand, AIR 1950 Ajmer 79 | Although special contract abrogated the 15 days' requirement of Section 106, the notice must still comply with the second rule and expire on the last date of a month of the tenancy; otherwise invalid. | Cited as supporting the proposition that the second provision of Section 106 (notice expiring with end of tenancy month) remains obligatory unless a valid contractual contrary is shown. |
| Doe D Lucy Mary King v. Grafton, (1852) 88 RR 678 | Where the tenancy could not be construed as a yearly tenancy, a contractual six months' notice need not end with the year of tenancy; the contractual notice was valid. | Cited by respondent to support that, depending on the contract, the statutory requirement may be displaced and a contractual notice can be valid even if it does not end with the year/month. |
| Arunachala Naicker v. Ghulam Md. Saheb, AIR 1951 Mad 408 (1950-2 Mad LJ 535) | When a contract governs notice, the contract should be read reasonably to ascertain parties' intention; if parties intended one month's notice given at any time, that interpretation should be adopted. | Relied on by the court as analogous to Ex. A-1. The court found Ex. A-1 to be a "contract to the contrary" and held that parties intended one month's notice to be given at any time irrespective of expiry of a tenancy month. |
| Kelu v. Ammad Kutti, 1910 Mad WN 794 | An express stipulation in a lease to surrender on demand constitutes a contract to the contrary under Section 106 and no statutory notice is necessary. | Cited to illustrate that an express contractual provision can exclude the application of Section 106; used to support the principle that contractual terms govern where present. |
| Moosa Kutti v. Thekke, AIR 1928 Mad 687 | If under the lease the tenant is not entitled to notice, Section 106 does not apply; notice to quit is only one mode of determining tenancy and contracts outside Section 106 are possible. | Quoted to show that Section 106 applies only when there is no contract to the contrary; used to support the proposition that contractual terms can govern determination of tenancy. |
| Madhavarao v. Bhagwandas, AIR 1961 Madh Pra 138 | When there is an agreement as to the period of notice, it is a contract to the contrary for purposes of Section 106; the second provision requiring notice to expire with the end of a tenancy month is a concomitant, indivisible condition. | Referred to for the proposition that the requirement that notice expire with the end of a tenancy month is an integral part of Section 106; the court also expressed agreement with the view that the second provision is concomitant and indivisible. |
| C.E. Treasurer v. S.F.B. Tyabji, AIR 1948 Bom 349 | Privity of contract is between lessor and lessee, not the lessor and the assignee of the lessee; there is no need to give notice to the assignee in place of the lessee. | Applied to reject the argument that notice needed to be given to the assignee; supported the finding that notice to the lessee was sufficient and that adding the assignee did not prejudice parties. |
Court's Reasoning and Analysis
The court reviewed the facts, the lease (Ex. A-1), the notice (Ex. A-2), the trial court's findings, and the line of authorities cited by both sides concerning Section 106 of the Transfer of Property Act.
The court observed that Ex. A-1 expressly provided that the first defendant should vacate the property whenever required by the plaintiff upon the plaintiff giving 30 days' notice. Ex. A-2 referred to Ex. A-1 and purported to determine the tenancy by the end of 30 days after receipt and called upon the first defendant to quit and deliver vacant possession after that period.
The court analysed Section 106, which (in its second proviso) requires that a notice for a monthly tenancy expire with the end of a month of the tenancy, and considered competing lines of authority:
- One line (following Dixon and other decisions) emphasises that even contractual notice periods must expire with the tenancy month/year as required by the second provision of Section 106.
- The other line (including Doe D Lucy Mary King, Arunachala Naicker, Kelu, Moosa Kutti and others) recognises that a valid contractual stipulation regarding notice — a "contract to the contrary" — governs the parties' rights and can permit a notice to be effective even if it does not conform exactly to the statutory calendar requirement.
Applying these authorities to the present case, the court concluded that Ex. A-1 is a "contract to the contrary" to Section 106. The court regarded Ex. A-1 as showing the parties' intention that the period of notice should be one month and that a month's notice could be given at any time irrespective of the expiration of a month of the tenancy (drawing on Arunachala Naicker as analogous).
The court also stated that the second provision of Section 106 (requiring notice to expire with the end of a tenancy month) is a concomitant and indivisible condition in general; however, in the circumstances of this case the contractual term (Ex. A-1) constituted a contract to the contrary and the parties' intention was that notice could be given at any time.
On the misjoinder argument, the court observed that notice to the lessee (the first defendant) was proper and that there was no requirement to give notice to the assignee; adding the assignee did not prejudice anyone. The court relied on authority (C.E. Treasurer v. S.F.B. Tyabji) to support the proposition that privity of contract is between lessor and lessee and that notice to the assignee is not necessary.
The court further stated that the point about the lower appellate court's discussion of facts was of little importance because the court had itself discussed the necessary facts in the second appeal.
Holding and Implications
Holding: The court dismissed the second appeal.
Consequences and immediate effects:
- The trial court's decision (and the lower appellate court's confirmation) stands: the lease Ex. A-1 permitted termination on 30 days' notice, Ex. A-2 was valid as given under Ex. A-1, the defendants were not entitled to compensation for alleged improvements, and the defendants were required to deliver possession as directed by the trial court.
- The second appeal was dismissed expressly; the court ordered no costs and no leave (as recorded in the judgment).
Broader legal implication stated by the court (as applied to these facts): where there is a contract to the contrary (a lease term that reasonably and expressly governs notice), the contract may displace the statutory notice requirement of Section 106 and the contractual notice will be effective according to the parties' intention. The court relied particularly on the decision in Arunachala Naicker v. Ghulam Md. Saheb as analogous and persuasive for this interpretation.
The opinion does not purport to set out any further broader rule beyond applying established authorities to the facts of this case; its direct effect is to affirm the judgments below and dismiss the defendants' second appeal.
1. Defendants are the appellants. The suit was for ejectment on the allegations that the plaintiff-trust is the owner of the suit property, that the first defendant is a monthly tenant under the plaintiff, that the first defendant, according to the lease, should vacate after 30 days, notice, that no improvement had been made by the defendants as to claim compensation at the time of vacating, that to the notice issued the first defendant replied denying the tenancy, that thereupon a fresh notice dated 26-1-1968 was issued determining the tenancy and that the second defendant has been impleaded as a party as the first defendant has transferred the lease to him. The plaintiff no doubt denied the alleged transfer and also denied any practice in respect of chatram properties, alleged by the defendant.
2. The first defendant contended that he transferred the lease to the second defendant on 21-11-1967, which has been recognised by the plaintiff, that compensation has to be paid for the improvement made and that the lease is a permanent one and cannot be terminated, particularly against the wish of the creator of the trust who wanted to benefit his relations. The first defendant also contended that the notice to quit is defective and that he is an unnecessary party since the second defendant alone is the tenant, whose tenancy has not been terminated. It has also been alleged by the first defendant that the suit property is a minor inam, that the defendants are entitled to patta and that the matter should be referred to the Settlement Tahsildar. Finally, the first defendant pleaded that the suit is bad for misjoinder of causes of action.
3. The second defendant, in his written statement, alleged that he is the tenant, that no valid notice of termination has been given to him, and that as he got a transfer of the lease by paying Rs. 3,000 the said amount should be paid to him by the plaintiff. In other respects, the second defendant adopted the written statement filed by the first defendant. The trial court, on the issues framed, held that the lease deed Ex. A-1, executed by the first defendant clearly mentions that the lease can be terminated by 30 days, notice, that the lease is not a permanent one, that Ex. B-12, the lease deed in favour of the second defendant, is a fabricated one and as such it is only the first defendant who is the lessee under the plaintiff and not the second defendant, and that Ex. A-2, the notice determining the tenancy of the first defendant giving him 30 days' notice as per the terms of the lease, is valid and enforceable in law. The trial court further held that no compensation need be paid to the defendants for the alleged improvements and there is no question of misjoinder of parties and causes of action, as pleaded by the defendants. On these findings, the trial court directed the defendants to hand over vacant possession of the suit property within a month from 23-10-1972.
4. Aggrieved by the said decision of the trial court, the defendants preferred an appeal to the Sub-Court, Chingleput. The Subordinate Judge of Chingleput, confirmed the findings of the trial court and dismissed the appeal, A.S 116 of 1973. Aggrieved by the decisions of the courts below, the defendants have now preferred this second appeal.
5. The main points argued by Sri Srinivasan, the learned counsel for the appellants are-(i) that the lower appellate court has not discussed the evidence on record as the final court of facts, and as such the decision given by the lower appellate court has to be set aside; (ii) That Ex. A-2, the notice to quit, is not valid in law; (iii) and that the suit is bad for misjoinder of causes of action.
6. Sri T.V Subramaniam, learned counsel appearing for the plaintiffs-respondent contended that the evidence is before this court and the discussion made by the trial court is also there in its judgment and as such this court can decide the matter without any difficulty, that Section 106 of the Transfer of Property Act cannot be strictly enforced in view of the agreement Ex. A-1, and that as such the notice Ex. A-2 is valid in law. The learned counsel also submitted that there is no question of any misjoinder of causes of action or parties to warrant a dismissal of the suit.
7. Ex. A-1 is the lease deed. It is mentioned in the lease deed that the first defendant should vacate the property whenever needed by the plaintiff on the plaintiff giving 30 days' notice to the first defendant. Thus, Ex. A-1 is a clear contract specifying the time to be given to the first defendant for vacating the property. Ex. A-2 is the notice to quit given to the first defendant. In the said notice, reference has been made to the lease agreement dated 7-11-1967 (Ex. A-1). It determined the tenancy of the first defendant by the end of 30 days after the receipt thereof. Ex. A-2 also called upon the first defendant to quit and deliver vacant possession of the property after the expiration of the abovesaid period. Section 106 of the Transfer of Property Act states—
“In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year;…; and a lease of immoveable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either the lessor or lessee, by 15 days' notice expiring with the end of a month of the tenancy.”
8. Sri Srinivasan, the learned counsel appearing for the appellants, submitted that under Ex. A-2, no doubt, 36 days' notice has been stipulated instead of 15 days as contemplated under Section 106 of the Transfer of Property Act, but that Section 106 further stipulates that such a notice must expire with the end of a month of the tenancy. It is thus argued that the notice Ex. A-2 terminating the tenancy by the end of 30 days of the receipt of Ex. A-2 is defective since it does not determine the tenancy with the end of a month of the tenancy. For this proposition, Sri Srinivasan cited number of decisions.
9. In Dixon v. Bradford and Dt. Railway Servants Coal Supply Society, 1904-1 KB 444, the King's Bench Division, interpreting an agreement which mentioned “I beg to give you three months' notice that we shall cease the tenancy”, came to the conclusion that in that case, there was an oral tenancy and that the three months to quit must expire with the year of tenancy. It further held that the tenancy had not been duly determined.
10. The next decision cited is Beevi Umma v. Allath Shamu Menon, 3 Mad LW 189 :(AIR 1917 Mad 141). In that case there was an agreement to deliver possession on demand. Dealing with the said provision, a Bench of this court held that the provision for delivery of possession on demand did not constitute a contract to the contrary within the meaning of Section 106 of the Transfer of Property Act, as it did not mention the time at which the demand should be made and that the provision for the payment of rent annually could not be split up.
11. Chunilal v. Chunilal, AIR 1923 Lah 659 lays down the principle as stated in Dixon v. Bradford and Dt. Railway Servants Coral Supply Society, 1904-1 KB 444.
12. In Baidyanath v. Onkarmal, AIR 1938 Cal 656, which dealt with a specific agreement pertaining to tenancy in that case, it was held that the only way by which either party could determine the tenancy was by observing the provisions of Section 106 and that in that case the lease was not terminated by the notice.
13. The next case cited is U.A Mfg. Co. v. Motilal Bombay Mills, AIR 1943 Bom 306, wherein a Bench of the Bombay High Court has held that a provision in an agreement of tenancy to the effect that either side will give one clear month's notice to determine the tenancy does not affect the rule that the notice must expire with the expiration of the tenancy. Thus, this decision also follows the decision in Dixon v. Bradford and Dt. Railway Servants Coal Supply Society, 1904-1 KB 444.
14. To the same effect is the decision in Mukanchand v. Gulabchand, AIR 1950 Ajmer 79, wherein the Ajmer High Court held—
“Though the special contract as to notice abrogated the 1st rule in Sec. 106 regarding 15 days' notice still the notice had to comply with the second rule in that section and was invalid as it did not expire on the last date of a month of the tenancy.”
15. Sri T.V Subramaniam, to support his contention that the notice given under Ex. A-2, need not conform to the requirements of Section 106 in view of Ex. A-1, cited number of decisions. The first decision cited by him is Doe D Lucy Mary king v. Grafton, (1852) 88 RR 678. In that decision, dealing with the agreement entered into between the parties in that particular case, it was held that the tenancy cannot be construed as a yearly tenancy and the six months' notice to quit mentioned in the agreement need not end with the year of tenancy. As such the Queen's Bench held that the notice to quit was a valid one.
16. The next case cited by Sri Subramaniam is Arunachala Naicker v. Ghulam Md. Saheb, 1950-2 Mad LJ 535 : (AIR 1951 Mad 408). In that decision, a Bench of this court, interpreting the contract entered into between the parties for determining the tenancy, stated—
“It seems to us that when there is a contract governing the question of notice, we must read that contract in a reasonable was to ascertain what the parties intended by way of notice and not try to read into the contract some term that would have to be implied only if there were no contract. It seems to us reasonable to conclude from the passage set out in the opening paragraph that not merely did the parties intend that the period of notice should be one month, but also that the one month's notice should be given at any time.”
17. The relevant portion of the contract which was the subject-matter of interpretation in the above decision read as follows:—
“Besides this, if you, after the said stipulated period, send me a notice giving one month's time I shall vacate the said land and deliver to you possession thereof.”
18. Thus, it is clear that the terms of the contract considered in the abovesaid Bench decision are analogous to the contract under Ex. A-1 in the case before us.
19. At this stage, Sri Srinivasan confronted the other side with the Bench decision in Beevi Umma v. Allath Shamu Menon, 3 Mad LW 189 : (AIR 1917 Mad 141) wherein it has been stated that the notice must end the tenancy with the month of tenancy. But in Beevi Umma v. Allath Shamu Menon, 3 Mad LW 189 : (AIR 1917 Mad 141) the words which came up for discussion were ‘on demand’. In those circumstances, the court held that the demand must be in conformity with Section 106 of the Transfer of Property Act. I do not find any conflict of ruling in the above two decisions.
20. Sri T.V Subramaniam also cited the decision in Kelu v. Ammad Kutti, 1910 Mad WN 794. There, a Bench of this court held that where the lease deed contained an express stipulation to surrender on demand, there is a contract to the contrary within the meaning of Section 106 of the Transfer of Property Act and that no notice to quit is necessary.
21. In Moosa Kutti v. Thekke, AIR 1928 Mad 687, also, a Bench of this Court held that if according to the terms of the lease the tenant is not entitled to notice, it cannot be said that the cause of action does not arise till the period given in the notice to quit expires. Notice to quit is only one of the modes in which a tenancy could be determined. Section 106 only recognises two kinds of tenancies, one yearly tenancy and the other monthly tenancy. There are cases which do not come within the ambit of Section 106 and they are governed by the terms of the contract of tenancy. It is only in cases where there is no contract as to notice that the provisions of Section 106 would be applicable; but where there is a contract as to giving notice or waiving notice the parties are governed by the terms of the contract and the law enacted in Section 106 of the Transfer of Property Act, cannot apply. Where the contract was that the tenant should surrender the property whenever required, the provisions as to notice in Section 106 cannot apply to it.
22. In Madhavarao v. Bhagwandas, AIR 1961 Madh Pra 138, the Madhya Pradesh High Court held—
“When there is an agreement as to the period of notice, it is a contract to the contrary for all purposes of Section 106. The second provision requiring the notice to expire with the end of a tenancy month is concomitant part of the requirement and forms an indivisible condition.”
23. Sri Subramaniam also cited the decision in C.E Treasurer v. S.F.B Tyabji, AIR 1948 Bom 349, wherein a Bench of the Bombay Court categorically held that in the case of a lease, the privity of contract is between the lessor and the lessee, and not the lessor and the assignee from the lessee, and as such there is no need to give notice either as per Section 106 or according to the agreement, to the assignee of the lessee.
24. From the above discussion it is clear that, as has been held in Arunachala Naicker v. Ghulam Md. Sahib, 1950-2 Mad LJ 535 : (AIR 1951 Mad 408) that if there is a contract, the intention of the parties has to be ascertained in applying Section 106 of the Transfer of Property Act. As far as the present case is concerned, Ex. A-1, is a ‘contract to the contrary’ in relation to the provisions of Section 106. From the said contract, it is clear that the parties intended that the period of notice should be one month and that a month's notice should be given at any time irrespective of the expiration of a month of the tenancy.
25. In my view also, the second provision requiring the notice to expire with the end of a tenancy month is concomitant part of the requirement and forms an indivisible condition.
26. The contention of Sri Srinivasan as to want of discussion by the lower appellate court regarding facts, assumes little importance, inasmuch as I have discussed the necessary facts in detail in second appeal.
27. I do not also think there is any substance in the argument that the suit has to fail for misjoinder of parties and causes of action. The plaintiff has correctly given notice to the first defendant who is the lessee under him and there is no need to give notice to the assignee of the lessee. This apart, nobody is prejudiced by adding the assignee who claims that he is in possession by virtue of the assignment made by the lessee.
28. In these circumstances, the second appeal is dismissed. No costs. No leave.
29. Appeal dismissed.
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