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Pakrutheen Vava Rawther Abdul Hameed Rawther, v. Raman Pillai Balakrishna Pillai And Others,
Factual and Procedural Background
This appeal arises from a suit for eviction of the defendant from a shop building held under a lease deed dated 28-9-1961. The lease was for one year with monthly rent payable before the 30th of each month. The defendant paid an advance of Rs. 200 in consideration of the lease. After the lease expired on 28-9-1962, the defendant remained in possession and paid rent until September 1963, after which he defaulted. Notices were sent demanding surrender of the premises and payment of arrears, but the defendant did not comply, leading to the institution of the suit. The defendant appealed against the decree for eviction and rent arrears, and the case reached the Kerala High Court on second appeal.
Legal Issues Presented
- Whether Sections 106 and 116 of the Transfer of Property Act, 1882, apply to a lessee holding over after the expiry of a fixed-term lease and paying rent, thereby creating a month-to-month or year-to-year tenancy.
- Whether the lease deed contained an agreement to exclude the operation of Sections 106 and 116, thus dispensing with the requirement of a notice under Section 106 to determine the lease.
- Whether the plaintiffs were entitled to a decree for eviction without issuing a valid notice under Section 106 when the defendant was holding over under Section 116.
Arguments of the Parties
Defendant's Arguments
- The suit was not maintainable because the tenancy had not been validly terminated.
- Since the defendant held over after the one-year lease expired and the landlord accepted rent for another year, the lease was renewed by operation of Section 116 of the Transfer of Property Act.
- A valid notice as required by Section 106 was necessary to determine the renewed tenancy, which was not given.
Plaintiffs' Arguments
- The lease deed contained a contract that no yearly or monthly tenancy under Section 116 would arise after expiry of the original lease period.
- Therefore, no notice as required by Section 106 was necessary to determine the lease.
- The relevant clause in the lease deed required the tenant to surrender the building on expiry without dispute and provided for return of the advance, indicating no continuation of tenancy under Section 116.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Puran Chanda v. Motilal, AIR 1964 SC 461 | Interpretation of Sections 106 and 116 of the Transfer of Property Act regarding holding over after lease expiry. | Held that Sections 106 and 116 did not apply to the case before the Supreme Court; tenancy expired by efflux of time, no notice required. |
| Moothorakutty v. AyissaBi, 1963 Ker LJ 556 | Application of Section 116 to a lessee holding over after lease expiry. | Expressed the view that Section 116 applies to holding over after lease expiry, creating a renewed tenancy. |
| Kai Khurshroo Bezonjee v. Bai Jerbal, AIR 1949 FC 124 | Effect of holding over after lease determination and necessity of notice under Section 106 if rent accepted under Section 116 tenancy. | Held that holding over lessee becomes tenant on sufferance; acceptance of rent creates new tenancy under Section 116 requiring notice under Section 106 for determination. |
| Subramonia Iyer v. Ammu, 1963 Ker LT 1009 (AIR 1964 Ker 218) | Interpretation of lease terms and applicability of Sections 106 and 116. | Referenced by plaintiffs' counsel to argue that tenancy was for a fixed period and Section 106 did not apply; court did not find this persuasive in current case. |
Court's Reasoning and Analysis
The court examined the applicability of Sections 106 and 116 of the Transfer of Property Act to the facts. It recognized that Section 116 creates a renewed tenancy from year to year or month to month if a lessee holds over after lease expiry and the landlord accepts rent. The defendant had held over and paid rent after the fixed one-year lease expired, and the landlord had accepted rent, thereby creating a tenancy under Section 116.
The plaintiffs contended that the lease deed contained an agreement excluding such renewal tenancy and thus no notice under Section 106 was needed. The court analyzed the relevant lease clause and concluded it was merely a conditional undertaking for surrender and return of advance, not an agreement to exclude the statutory tenancy renewal under Section 116.
The court distinguished the Supreme Court’s decision in Puran Chanda v. Motilal, noting it did not support the view that Sections 106 and 116 do not apply to holding over tenants. The Federal Court’s decision in Kai Khurshroo Bezonjee v. Bai Jerbal was cited as authoritative, confirming that a holding over tenant who pays rent creates a tenancy under Section 116 requiring a valid notice under Section 106 to terminate.
Consequently, the court held that the plaintiffs were not entitled to eviction without a valid notice under Section 106, since the defendant’s tenancy had been renewed under Section 116. The decree for arrears of rent was maintained, but no eviction decree was granted. The court also addressed rent payments and interest, directing credits and settlement of disputes in execution proceedings.
Holding and Implications
The appeal is allowed in part. The court held that the defendant’s tenancy was renewed under Section 116 of the Transfer of Property Act due to holding over and acceptance of rent by the landlord, and that the lease deed did not exclude the operation of Sections 106 and 116. Therefore, a valid notice under Section 106 was necessary to determine the tenancy, which was absent.
As a result, the plaintiffs were not entitled to a decree for eviction. However, the plaintiffs were entitled to a decree for arrears of rent payable at the lease rate until August 1968, with interest and credit for payments made. The parties were directed to bear their own costs.
No new precedent was established beyond the application of existing statutory provisions and case law to the facts of this lease and holding over tenancy situation.
Isaac, J.:— This is a defendant's appeal under Section 5 of the Kerala High Court Act, 1959 from the judgment of our learned brother, Raghavan J., in S.A No. 1242 of 1965; and it arises out of a suit for eviction of the defendant from a shop building held by him under a lease deed Ext. D-1 dated 28-9-1961, and also for arrears of rent and future rent. Ext. D-1 was executed by the defendant in favour of the first plaintiff; and the rights of the first plaintiff subsequently devolved on the third plaintiff. The lease was for a period of one year on monthly rent of Rs. 17.50, payable before the 30th of every month. The defendant also paid a premium or advance of Rs. 200/- in consideration of the lease. The period of the lease expired on 28-9-1962; but the defendant remained in possession of the shop building after the expiry of the said period, and paid rent as provided in Ext. D-1, till the end of September 1963. Thereafter he defaulted payment of rent. The defendant was, therefore, called upon several times to surrender the building and pay the arrears of rent; but he did not do so in spite of notices sent to him. Ext. D-4 dated 4-2-1964 and Ext. D-3 dated 5-5-1964 are two notices issued to the defendant on behalf of the landlord, Both Exts. D-4 and D-3 required the defendant to surrender the building within 15 days of the date of the said notices. The defendant did not comply with the demand and therefore this suit was instituted.
2. The defendant contended among other things that the suit was not maintainable, as the tenancy of the building had not been validly terminated. This contention was apparently based on the provisions contained in Sections 106 and 116 of the Transfer of Property Act, 1882. Section 106, the first part of which alone is relevant, reads as follows:—
“106. 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, terminable, on the part of either lessor or lessee, by six months' notice expiring with the end of a year of the tenancy; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice expiring with the end of a month of the tenancy.”
3. Section 116 deals with the effect of holding over of the property after the determination of the lease; and it reads:—
“116. If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106.”
4. The defendant contended that, as he was holding over the property after the expiry of the period of one year for which the lease was given, and as the landlord had admittedly received rent thereafter for another one year, the lease had been renewed by virtue of Section 116 of the Act, and that it would not be determined except by a notice as required by Section 106 of the Act. There is no dispute that neither Ext. D-3 nor Ext. D-4 would satisfy the requirements of Section 106. But the plaintiffs contended that Ext. D-1 contained a contract to the effect that a yearly or monthly tenancy as provided in S. 116 would not be created after the expiry of the original period of the lease, and that a notice as required by Section 106 was not necessary to determine the lease. The plaintiffs relied on the following provision in Ext. D-1:—
(Original extract in Malayalam omitted).
5. The trial Court accepted the plaintiffs' contention, and decreed the suit. This contention was also accepted by the Subordinate Judge, before whom the defendant filed an appeal. He therefore filed Second Appeal in this Court. The learned Single Judge held that the above provision did not amount to a contract dispensing with the requirements of a notice as provided in Section 106; but he also held that Section 116 did not apply to a lease, which was for a fixed period, and that in such a case the question of determination of lease by a notice as required by Section 106 did not arise. In the result, he confirmed the decree, though for entirely different reasons. The defendant, therefore, filed the present appeal. Our learned brother relied on a decision of the Supreme Court in Puran Chanda v. Motilal, AIR 1964 SC 461 in support of his view that Sections 106 and 116 of the Transfer of Property Act did not apply in the case of a lessee remaining in possession of the property after the expiry of the period of the lease and paying rent to the landlord. It may, however, be mentioned that an opposite view was expressed by the learned Judge in Moothorakutty v. AyissaBi, 1963 Ker LJ 556. In that case he said:—
“Ext. A was of the year 1941 with a term of six years which expired in 1947. Thereafter till the filing of the suit in 1949, the tenant was holding over; and to such a tenancy, Section 116 of the Transfer of. Property Act must apply.”
6. It does not appear that this decision was brought to the notice of the learned Judge. The learned counsel for the plaintiffs contended that in the light of the above decision of the Supreme Court, the decision of this Court in Moothorakutty's case, 1963 Ker LJ 556 was wrong. This contention requires a careful examination. The case before the Supreme Court arose out of a suit for eviction of a tenant of a building. The lease was for a period of one year commencing on 1st August 1952, on a monthly rent of Rs. 70/-. On 27-6-1954, the landlord issued notice to the tenant calling upon him to vacate the building by midnight of 31st July 1954-1st August 1954. On 2-8-1954, the landlord instituted the suit for eviction. One of the contentions in the suit—and this was urged before the Supreme Court also—was that the notice was not valid in determining the tenancy, as it was short by 24 hours. In dealing with the above contention, the Supreme Court said:
“It is not necessary in this appeal to express our opinion on the validity of the contention, for we are satisfied that the term of the tenancy had expired by efflux of time; and, therefore, no question of statutory notice would arise.”
7. It is the above passage that has been quoted by our learned brother in support of his decision under appeal. There is no finding in the Supreme Court case that, after the expiry of the period of one year for which the lease was created, the tenant was holding over, and a tenancy under Section 116 of the Transfer of Property Act had been created. We cannot assume that it was an omission. It must be a case where Section 116 had no application; and if so, the tenancy had expired by efflux of time, and no question of notice arose, as held by the Supreme Court. This decision does not, therefore, support our learned brother's view that Sections 106 and 116 of the Transfer of Property Act have no application to the case of a tenant holding over after the expiry of the period of the lease.
8. The above question arose pointedly for decision before the Federal Court in Kai Khurshroo Bezonjee v. Bai Jerbal, AIR 1949 FC 124. That case arose out of a suit for eviction of a lessee of a building. The period of lease expired on 31-8-1942; and the landlord had issued notices to the lessee, requiring him and the sub-lessees to vacate the building on the expiry of the period. But they did not surrender the building. They continued to pay the rent and the landlord continued to accept the same, till the suit was instituted on 7-12-1945. It was contended among other things that the suit was not maintainable for want of a proper notice as required by Section 106 of the Transfer of Property Act, as the tenants were holding over the property under Section 116 of the Act. Dealing with this matter, the Federal Court said:
“On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised premises to the lessor. If the lessee or a sub-lessee under him continues in possession even after the determination of the lease, the landlord undoubtedly has the right to eject him forthwith; but if he does not, and there is neither assent nor dissent on his part to the continuance of occupation of such person, the latter becomes in the language of English law a tenant on sufferance who has no lawful title to the land but holds it merely through the laches of the landlord. If now the landlord accepts rent from such person or otherwise expresses assent to the continuance of his possession, a new tenancy comes into existence as is contemplated by Section 116 of the Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month in accordance with the provisions of Section 106 of the Act.”
9. The Court also added:
“What Section 116 of the Transfer of Property Act contemplates is that on one side there should be an offer of taking a renewed or fresh demise evidenced by the lessee's or sub-lessee's 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 by acceptance of rent or otherwise.”
10. This decision is clear authority for the position that, in the absence of an agreement to the contrary, Section 116 of the Act would apply to a lessee continuing in possession of the property after the expiry of the period of the lease, and that in such a case, a notice satisfying the requiremens of Section 106 is necessary to determine the lease.
11. The learned counsel for the plaintiffs however contended that the lease created under Section 116 of the Act would be one from year to year or from month to month, only in the absence of an agreement to the contrary, that Ext. D-1 contained such an agreement, that notice as required by Section 106 of the Act was not, therefore, necessary to determine the lease, and that the finding of our learned brother to the contrary was wrong. We have already extracted the relevant portion of Ext. D-1, on which reliance was made. It only states that the tenant shall surrender the building on the expiry of the period of one year without any dispute or any damage to the building, that on the expiry of the said period, the landlord shall return to the tenant the sum of Rs. 200/-, which the landlord was receiving as advance, without interest, and that then the tenant shall surrender the building.
12. The learned counsel contended that the tenancy was for a period certain, and thereafter until the amount of advance was returned by the landlord to the tenant, and that Section 106 of the Act had, therefore, no application to the case. This contention was advanced on the basis of certain observations contained in the decision of this Court in Subramonia Iyer v. Ammu, 1963 Ker LT 1009 : (AIR 1964 Ker 218). It is unnecessary for us to consider the above contention, as we are in agreement with our learned brother that the lease deed does not make out an agreement to the contrary, as canvassed by the plaintiffs' learned counsel in our opinion, the clause relied on by him is only a conditional undertaking on the part of the tenant to surrender the building on the expiry of the period of the lease, and a corresponding undertaking on the part of the landlord to return the advance amount without interest at that time. A number of decisions were cited by the learned counsel in support of his contention that this clause would make out such an agreement. It is unnecessary to refer to any of them as they do not deal with a similar clause, and ordinarily any decision on the construction of a particular clause in a document cannot be of any assistance in construction of another document. We are, therefore, constrained to differ from the conclusion of our learned brother, and hold that the plaintiffs are not entitled to get a decree for eviction in this suit, as the defendant has been holding over the property under Section 116 of the Transfer of Property Act after the expiry of the period of the lease, end as the lease thus created has not been determined by a valid notice as requited by Section 106 of the Act. The third plaintiff has also got a decree for arrears of rent and future rent after setting off the advance paid by the defendant; but no question of future rent or set off of the advance amount arises in the absence of a decree for eviction. We, therefore, give a decree to the 3rd plaintiff for arrears of rent payable at the rate fixed in the lease deed till the end of August 1968. All amounts found by the trial Court to have been paid towards rent and all payment made thereafter will be given credit to the defendant. Disputes, if any regarding payments made after the date of the trial Court's decree, will be settled by the execution Court. The third plaintiff will also get interest at 6% per annum on the amounts found due hereunder from this date. In the circumstances of the case, we direct the parties to bear their respective costs in all the Courts.
13. Order accordingly.
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