Chander Mohan Jain & Ors v. State Bank Of Patiala & Anr.

Factual and Procedural Background

This opinion addresses two interlocutory applications in a dispute involving a lease agreement and rent payment. The defendant bank occupies premises for which rent is claimed by the plaintiff. The building was partially damaged due to a roof collapse on 13.10.1990 and subsequently sealed by the New Delhi Municipal Committee on 05.10.1990 for being unsafe. Despite these events, the defendant bank has not voided the lease and has not paid rent since 31.10.1990. The plaintiff seeks directions for payment of rent amounting to Rs. 1,02,600/- per month.

Legal Issues Presented

1. Whether the defendant tenant is liable to pay rent despite the partial collapse of the building and its sealing by the municipal authority.
2. Whether the defendant tenant had the option or obligation to void the lease under Section 108(e) of the Transfer of Property Act, 1882, due to the premises being declared unsafe.
3. Whether the tenant can suspend payment of rent without formally voiding the lease.

Arguments of the Parties

Defendant's Arguments

• The defendant bank impliedly relies on the building being unsafe and sealed by the municipal authority to justify non-payment of rent.
• There is an assertion that the premises were unsafe due to the roof collapse and sealing, which presumably affects the leasehold obligations.

Plaintiff's Arguments

• The plaintiff contends that under Section 108(e) of the Transfer of Property Act, 1882, the tenant had the option to void the lease if the premises were unsafe but failed to do so.
• Citing the precedent from Chamber of Colour and Chemical Pvt. Ltd. v. Trilok Chand, the plaintiff argues that a tenant cannot treat a lease as subsisting and simultaneously suspend payment of rent.
• The plaintiff insists that since the lease has not been voided, the defendant remains liable for rent payment.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Section 108(e) of the Transfer of Property Act, 1882	Tenant's option to void lease if premises become unsafe	Court held that since the defendant did not void the lease, it remains liable to pay rent.
Chamber of Colour and Chemical Pvt. Ltd. v. Trilok Chand, 1973 Rajdhani Law Reporter (Note) 68	A tenant cannot suspend rent payment while treating the lease as subsisting	Court agreed with the precedent and applied it to hold the defendant liable for rent despite non-payment.

Court's Reasoning and Analysis

The court analyzed the situation by first considering the effect of Section 108(e) of the Transfer of Property Act, 1882, which provides the tenant an option to void the lease if the premises become unsafe. The defendant bank neither voided the lease nor disputed its continuing tenancy. The court found that the sealing of the premises by the New Delhi Municipal Committee did not absolve the tenant of rent liability, since the tenant chose not to exercise the option to void the lease. The court further relied on the precedent from Chamber of Colour and Chemical Pvt. Ltd. v. Trilok Chand, which established that a tenant cannot treat the lease as subsisting and simultaneously suspend rent payments. On this legal foundation, the court directed the defendant to deposit the outstanding rent in court within ten days.

Holding and Implications

DISPOSED OF

The court allowed the application for bringing subsequent events on record and directed the defendant bank to pay the rent of Rs. 1,02,600/- per month, which had not been paid since 31.10.1990. The decision confirms that a tenant who continues to treat a lease as valid must pay rent, even if the premises are sealed or unsafe, unless the lease is formally voided under the statutory provision. The ruling directly affects the parties by mandating payment but does not establish a new legal precedent beyond reaffirming established principles.