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Smart Summary

Factual and Procedural Background

The plaintiffs filed a suit seeking eviction of the defendant from the 2nd floor of premises No. 6, Community Centre, Basant Lok, Vasant Vihar, New Delhi, and recovery of Rs. 8,46,861 as compensation for use and occupation from 1.7.1995 to September 1995, along with future mesne profits of Rs. one lac per month. The defendant had taken the premises on rent by executing an unregistered lease deed dated 3.6.1986. The tenancy was month-to-month, terminated by a notice dated 7.1.1995. Despite service of the notice under Section 106 of the Transfer of Property Act, the defendant did not vacate. The defendant contested the suit, arguing the tenancy was renewed until 3.6.1998 and challenged the validity of the termination notice. The plaintiffs applied for judgment on admissions under Order 12, Rule 6 of the Code of Civil Procedure (CPC).

Legal Issues Presented

  1. Whether the unregistered lease deed dated 3.6.1986 creates a valid lease for a term exceeding one year, or whether the lease is deemed month-to-month under the Transfer of Property Act and Registration Act.
  2. Whether the tenancy was validly terminated by the notice dated 7.1.1995 under Section 106 of the Transfer of Property Act.
  3. Whether M/s. P. Talwar & Co. is a necessary party to the suit for eviction.
  4. Whether acceptance of increased rent by the plaintiffs amounts to renewal of the tenancy or waiver of the notice to quit.
  5. Whether the plaintiffs are entitled to judgment on admissions regarding eviction and the procedure for recovery of mesne profits.

Arguments of the Parties

Defendant's Arguments

  • The notice dated 7.1.1995 is invalid as the tenancy was not terminated by all joint landlords, including M/s. P. Talwar & Co.
  • The contract of tenancy stands renewed until 3.6.1998 due to payment of increased rent, making the eviction suit premature.
  • The amount of mesne profits claimed by the plaintiffs is excessive.
  • The plaintiffs waived the notice to quit by accepting rent payments after the notice.
  • Three months' notice was necessary for termination as per the unregistered lease agreement.
  • The suit is bad for non-joinder of M/s. P. Talwar & Co., a joint landlord.

Plaintiffs' Arguments

  • The lease deed dated 3.6.1986 is unregistered and inadmissible to prove a lease exceeding one year, hence the tenancy is month-to-month.
  • The tenancy was validly terminated by the notice dated 7.1.1995 under Section 106 of the Transfer of Property Act.
  • M/s. P. Talwar & Co. is not a necessary party as their contract with the defendant was for services, not tenancy.
  • Acceptance of rent after notice does not waive the notice to quit.
  • The claim for mesne profits requires a separate inquiry under Order 20, Rule 12 CPC.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Satish Chand v. Govardhan Das, (1984) 1 SCC 369 : AIR 1984 SC 143 Interpretation of Section 49 of the Registration Act regarding inadmissibility of unregistered lease deeds except for collateral purposes The court held the unregistered lease deed inadmissible to prove the lease transaction and that terms of lease are not a collateral purpose under Section 49, thus invalidating the lease renewal claim.

Court's Reasoning and Analysis

The court analyzed the nature of the lease deed dated 3.6.1986 and found it unregistered and thus inadmissible under Section 49 of the Registration Act to prove a lease exceeding one year. Consequently, the lease is deemed month-to-month under Section 107 of the Transfer of Property Act and terminable by 15 days' notice under Section 106. The defendant's contention of renewal till 3.6.1998 was rejected as the unregistered lease could not create a valid renewed lease. The court also examined the role of M/s. P. Talwar & Co. and concluded they were not joint landlords but service providers, so their non-joinder does not invalidate the suit. The acceptance of rent after notice was held not to waive the notice to quit, consistent with settled law. The notice dated 7.1.1995 was found to have validly terminated the tenancy with effect from the end of the tenancy month. As the defendant admitted receipt of the notice and termination of tenancy, the plaintiffs were entitled to judgment on admissions for eviction. However, the claim for mesne profits involved disputed facts and required inquiry under Order 20, Rule 12 CPC.

Holding and Implications

The application (IA No. 2546/98) under Order 12, Rule 6 CPC is allowed to the extent that the defendant's tenancy is held to be validly terminated and the defendant is ordered to deliver vacant possession of the suit premises to the plaintiffs.

Consequently, a decree for possession is drawn in favor of the plaintiffs. The claim for mesne profits remains disputed and will be subject to a separate inquiry under Order 20, Rule 12 CPC. The decision directly affects the parties by confirming eviction and setting procedure for mesne profits without creating new legal precedent.

    Amar Chand Talwar v. Export Promotion Council For Handicrafts

    M.S.A Siddiqui, J.— The plaintiffs have filed the application (IA No. 2546/98 under Order 12, Rule 6, CPC for judgment on admissions.

    2. To appreciate the merits of the controversy, it will be necessary to give brief narrative of the material facts. The plaintiffs filed the present suit for eviction of the defendant from the 2nd floor of the premises No. 6, Community Centre, Basant Lok, Vasant Vihar, New Delhi (hereinafter called the ‘suit premises’) and for recovery of Rs. 8,46,861/- as compensation for use and occupation of the suit premises from 1.7.1995 to September, 1995 besides future mesne profits @ Rs. one lac per month. According to the plaintiffs, the defendant took the suit premises on rent after executing an unregistered lease deed dated 3.6.1986 in favour of the plaintiffs. The rent last paid by the defendant was Rs. 25,094/- per month. Since the defendant's tenancy was from month-to-month, the same was terminated w.e.f 2.3.1995 by the notice dated 7.1.1995 Despite service of the said notice under Section 106 Transfer of Property Act, the defendant did not vacate the suit premises.

    3. The defendant resisted the suit and in the written statement apart from raising other objections regarding maintainability of the suit for non-joinder of M/s. P. Talwar & Co., it was asserted that the notice dated 7.1.1995 is invalid as the tenancy was not terminated by M/s. P. Talwar & Co., one of the joint land lords and further the contract of tenancy stands renewed till 3.6.1998 and thus the plaintiffs' suit for eviction is premature. It was also asserted that the amount of mesne profits claimed by the plaintiffs is highly excessive.

    4. It is an admitted position that on 3.6.1986, the suit premises were leased out to the defendant at a monthly rent of Rs. 16,500 for a period of three years vide unregistered lease deed dated 3.6.1986 According to the lease agreement, the lease was renewable for a further period of three years with the mutual consent of the parties by paying 15% increased rent. It is also undisputed that the rent last paid by the defendant was Rs. 25,094/- per month. Learned Counsel for the defendant contended that since the defendant has been paying increased rent to the plaintiffs, the contract of tenancy stands renewed till 3.6.1998 in accordance with the terms of the lease agreement dated 3.6.1986 and that being so, the notice dated 7.1.1995 is invalid and the present suit for eviction is premature. I am unable to accept the aforesaid submissions of the learned Counsel. Section 107 of the Transfer of Property Act postulates that a lease of immovable property from year-to-year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. In the absence of registered instrument, it must be a monthly lease. In view of the said provisions, since the lease was for a period exceeding one year, it could only have been extended by a registered instrument executed by the plaintiffs and the defendant. In the absence of registered instrument, the lease shall be deemed to be “lease from month-to-month”. The unregistered lease deed dated 3.6.1986 is clearly inadmissible in evidence under Section 49 of the Registration Act, except for the collateral purpose of proving the nature and character of possession of the defendant. The proviso to Section 49 of the Registration Act is not applicable in the present case inasmuch as the terms of a lease are not a “collateral purpose” within its meaning. (Satish Chand v. Govardhan Das, (1984) 1 SCC 369 : AIR 1984 SC 143). Thus, the lease deed dated 3.6.1986 is inadmissible in evidence to prove the transaction of lease. It was also ineffectual to create a valid lease for a renewed term for want of registration under Section 17 of the Registration Act. Consequently, I find and hold that in the instant case, the lease shall be deemed to be a lease from month-to-month, terminable, on the part of either lessor or lessee by 15 days' notice under Section 106 of the Transfer of Property Act expiring with the end of a month of the tenancy.

    5. Learned Counsel for the defendant further contended that since M/s. P. Talwar & Co. was one of the joint-landlords, the suit is bad for non-joinder of the necessary party to the suit. It is beyond the pale of controversy that by the agreement dated 3.6.1986 executed between M/s. P. Talwar & Co. and the defendant, M/s. P. Talwar & Co. had undertaken to render following services to the defendant:

    “(a) Provide, and maintain tube-light fittings.

    (b) Provide and maintain ceiling fans in the premises.

    (c) Provide and maintain a booster pump for pumping water to overhead tank.

    (d) Maintenance of the common passage including the staircase.

    (e) Provide a night watchman for the security of the premises.

    (f) Major breakdown in electricity and water lines shall also be looked after by the party of the second part including internal white washing/painting of the premises.

    6. On a careful perusal of the said agreement, it becomes clear that M/s. P. Talwar & Co. had undertaken to render services to the defendant for a consideration of Rs. 3300/- per month. The said contract is independent of the contract of tenancy and it does not create relationship of landlord and tenant between the defendant and M/s P. Talwar & Co. Consequently, I find and hold that M/s P. Talwar & Co. is not a necessary party to this suit and so the suit is not bad for non-joinder of the necessary party.

    7. Next it was contended by the learned Counsel for the defendant that notice dated 7.1.1995 is invalid and ineffective on the following grounds—

    (a) that the plaintiffs have been accepting increased rent from the defendant and so the contract of tenancy stands renewed till 3.6.1998

    (b) that by accepting rent from the defendant, the plaintiffs have waived the notice to quit;

    (c) that as per the agreement dated 3.6.1986, three months' notice was necessary for termination of the tenancy;

    (d) that no notice was given on behalf of M/s P. Talwar & Co. for termination of the tenancy.

    8. As regards the contention for renewal of the contract of tenancy, learned Counsel for the defendant has invited my attention to clause 4 of the agreement dated 3.6.1986 It is undisputed that initially the suit premises were let out at a monthly rent of Rs. 16,500/- and the rent last paid by the defendant was at the rate of Rs. 25,094/- per month. According to the learned Counsel, rent of Rs. 25,094/- per month represents the increased rent in terms of clause 4 of the agreement. I have already held that the agreement dated 3.6.1986 is inadmissible in evidence to prove the transaction of lease and it was also ineffectual to create a valid lease for a renewed term for want of registration under Section 17 of the Registration Act. I have also held that in the instant case, the lease shall be deemed to be a lease from month-to-month, terminable on the part of either lessor or lessee by 15 days' notice under Section 106 of the Transfer of Property Act. In this view of the matter, it cannot be held that the contract of tenancy stands renewed till 3.6.1998 and further that three months' notice was necessary for its termination.

    9. As regards the ground (d), I have already held that there was no contract of tenancy between M/s. P. Talwar & Co. and the defendant. That being so, no notice was necessary on behalf of M/s. P. Talwar & Co. for terminating the defendant's tenancy.

    10. As regards waiver of notice dated 7.1.1995, it is an admitted position that after institution of the suit, the plaintiffs have received the amount for use and occupation of the suit premises. It is well settled that mere acceptance of rent by the landlord does not amount to waiver of notice to quit under Section 106 of the Transfer of Property Act. That apart, by the orders dated 16.5.1997, the plaintiffs have been permitted by this Court to collect the cheques representing the rent/compensation from the office of the defendant. Consequently, it cannot be held that the notice dated 7.1.1995 has been waived by the plaintiffs as alleged by the defendant.

    11. Admittedly, the notice dated 7.1.1995 was received by the defendant. It is also undisputed that the defendant's tenancy commenced on 3rd day of each month. By the notice dated 7.1.1995, the defendant's tenancy was terminated with the end of the month of the tenancy. I, therefore, find and hold that the defendant's tenancy was validly terminated by the plain tiffs vide notice dated 7.1.1995 Viewing the aforesaid admissions in the pleadings, the plaintiffs are entitled to judgment on admissions under Order 12, Rule 6, CPC regarding the defendant's eviction from the suit premises. As regards the claim of mesne profits for use and occupation of the suit premises, there is a dispute between the parties, which necessitates an inquiry under Order 20, Rule 12, CPC.

    12. For the foregoing reasons, the application (IA No. 2546/98) is allowed under Order 12, Rule 6, CPC to the extent indicated above.

    13. It is, therefore, ordered and decreed that the defendant shall deliver vacant and peaceful possession of the suit premises to the plaintiffs. As regards the plaintiffs' claim for recovery of mesne profits, an inquiry shall be held under Order 20, Rule 12, CPC. A decree be drawn up accordingly.

    Suit for possession decreed.
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    Comments

    Amar Chand Talwar v. Export Promotion Council For Handicrafts
    (Jan 28, 1999)