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Nanakram Das And Others v. Nagarmal And Others

Orissa High Court

Apr 6, 1954

Judgment

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Concise Analytical Summary of the Provided Opinion

Factual and Procedural Background

This is a defendants' appeal against the concurrent decisions of the two lower Courts which decreed the plaintiff's suit for eviction of the defendants from two houses situated at Rajgangapur and for consequential reliefs.

The plaintiffs alleged that the defendants were their monthly tenants of the two houses; rent was originally fixed at Rs. 5-12-0 per month and had been raised to Rs. 10/- per month. The plaintiffs asserted the defendants were in arrears of rent, were given notice to quit on or before 1-9-47, and failed to vacate; plaintiffs claimed damages (the opinion records an asserted figure of "Rs. 1-8-0, per day" in the pleadings).

Procedurally, the trial Court held the tenancy to be monthly (though rent had earlier been paid annually), found the notice to be reasonable, and assessed damages at Rs. 40/- per month. The lower appellate Court affirmed the findings on nature of tenancy and notice but reduced damages to Rs. 20/- per month. The present appeal challenges those concurrent findings and the damages determination.

Legal Issues Presented

Whether the defendants were monthly tenants or annual tenants (i.e., the classification of the tenancy).
Whether the notice to quit served on 31-7-47, expiring on or before 1-9-47, was valid and reasonable for the tenancy in question.
Whether the equitable principles of the Transfer of Property Act (notably Section 106) may be applied to leases that began in the former Gangpur State prior to the merger when the Act was not in force there.
Whether a tenant who denied the landlord's title is entitled to notice and, if so, how such conduct affects the reasonableness of the notice.
The proper quantum of damages for unlawful occupation from the date of expiry of the notice until vacation of the premises.

Arguments of the Parties

Defendants' (Appellants') Arguments (as recorded)

The notice to quit was not validly given.
The tenancy was an annual tenancy and hence the defendants were entitled to one year's notice (variously argued with reference to provisions and calendar considerations).
The damages claimed (or awarded) were exhorbitant and the lower appellate Court's figure (Rs. 20/- per month) was too high.
Mr. Rao (for the defendants) relied on the decision Shamsoonessa Bibi v. Satya Sebak (AIR 1919 Cal 529) to argue that the mere method or timing of payment does not convert a yearly tenancy into a monthly tenancy; he also argued that if Section 106 principles applied then a shorter notice that expires with the Samvat month (15 days expiring with the month) should govern.

Plaintiffs' (Respondents') Arguments (as recorded)

The defendants were monthly tenants: account-book entries (showing annual payments calculated on a monthly rate of Rs. 5-12-0) demonstrated the tenancy was monthly notwithstanding annual payment timing.
The defendants had been given reasonable notice to quit (notice dated 31-7-47 to 1-9-47, which is more than thirty days), and they failed to vacate.
They claimed a higher rate of rent (alleged enhancement to Rs. 10/- per month) and sought damages for unlawful occupation on that basis.
Mr. Sen (for the plaintiffs) argued that a tenant who had denied the landlord's title should not be entitled to notice; he urged that the conduct in disputing title should be borne in mind when assessing whether notice was required or reasonable.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Debendra Nath v. Syamaj Frcsanna, 11 Cal WN 1124	Shows that equitable principles of the Transfer of Property Act were applied to leases commencing prior to the Act coming into force.	The court cited it to support applying equitable principles of the Transfer of Property Act in respect of leases in Gangpur predating the Act's operation there.
Shaller Bhagat v. Tulsi Bhagat, AIR 1921 Pat 307	Observations supporting that payment pattern/calculation may indicate monthly tenancy despite annual payment.	Referenced as supportive authority for treating the tenancy as monthly where rent is calculated on a monthly basis, though distinguished on application because that case applied Section 106 in terms.
Chinti Kaharin v. Kripashankar, AIR 1941 Pat 488	Similar observations to Shaller Bhagat about characterising tenancy by how rent is calculated.	Used as supporting material for the proposition that annual payment does not conclusively make a tenancy annual if rent is clearly calculated monthly; distinguished on facts as Section 106 applied in that case.
Shamsoonessa Bibi v. Satya Sebak, AIR 1919 Cal 529	Holds that a lease reserving a yearly rental is not converted into a monthly tenancy merely because rent is paid in monthly instalments.	Cited by defendants' counsel (Mr. Rao); the court found the facts of that case contrary to the present facts and did not regard it as authoritative for this case's particular factual matrix (annual payment but clear monthly calculation).
Haridas Tanti v. Upendra Narain, 16 CLJ 74	Shows that courts, for leases predating the Transfer of Property Act, have held that "reasonable notice" suffices (in some cases six months' notice held reasonable for annual tenancies).	Cited in the context of what constitutes reasonable notice for pre-Act leases; the court relied on the general proposition that reasonable notice depends on case facts and that prior decisions establishing six months' notice related to annual tenancies.
Hemangini v. Gobinda Chowdhury, 6 Cal WN 69	Same general proposition as Haridas Tanti about reasonable notice for pre-Act leases.	Referred to as an authority that reasonable notice was applied where the tenancy was annual; the court distinguished such cases from the present monthly tenancy.
Kishori Mohun Roy v. Nand Kumar, 24 Cal 720	Another decision cited on "reasonable notice" in leases predating the Transfer of Property Act.	Used to illustrate that prior courts sometimes held longer notices (e.g., six months) reasonable for annual tenancies; not applied to justify six months' notice in the present monthly-tenancy case.

Court's Reasoning and Analysis

The court conducted a step-by-step analysis grounded in facts that were before the lower Courts and in equitable principles drawn from the Transfer of Property Act where applicable.

Classification of tenancy:
- There was no direct evidence of the original tenancy terms because the tenancy began in the time of predecessors-in-interest. The plaintiffs' account-book entries, however, showed rent paid in Sambat years 2002–2004 on an annual basis but calculated at Rs. 5-12-0 per month.
- The correctness of those account entries was not challenged; the trial and appellate Courts relied on them (specifically Ext. 3(c), showing in a Samvat year with 13 months the rent paid exceeded the 12-month charge at Rs. 5-12-0), concluding the tenancy was monthly despite annual timing of payment.
- The court accepted the lower Courts' reliance on the equitable principle in Section 106 of the Transfer of Property Act and on the account-books, holding that mere annual payment does not necessarily make a tenancy annual when the rent is clearly calculated monthly.
- The court distinguished Shamsoonessa Bibi (cited by defendants' counsel) on facts and found it inapplicable to the present factual pattern.
Applicability of equitable provisions of the Transfer of Property Act:
- Though the Transfer of Property Act may not have been in force in Gangpur prior to merger (1-1-1948), the court accepted the lower Courts' view that the equitable principles underpinning many provisions (including Section 106) could be applied because they are founded on equity, justice and good conscience.
- The court emphasized that applying equitable principles does not require literal application of every provision's technical requirement (see notice expiry with the month requirement in S.106).
Reasonableness and validity of notice:
- The notice was served on 31-7-47 directing vacation on or before 1-9-47 — a period of more than thirty days. The court viewed one month's notice as reasonable in this case, in light of the tenancy being monthly, the residential character of the property, and the defendants' arrears of rent.
- Mr. Rao's argument that, if Section 106 principles applied, a notice must conform to the end-of-month expiry rule (and thus be only 15 days expiring with the Samvat month) was rejected. The court held that the end-of-month requirement in S.106 need not be applied literally to pre-Act leases; reasonable notice suffices.
- The court also addressed the argument (raised by Mr. Sen) that a tenant who denies the landlord's title should not be entitled to notice. The court observed that Section 111(g)(2) of the Transfer of Property Act indicates that even a tenant asserting a hostile title cannot be deprived of written notice; accordingly, the denial of title did not negate the requirement of notice or make the one-month notice unreasonable.
Quantum of damages:
- The trial Court had assessed damages at Rs. 40/- per month; the lower appellate Court reduced this to Rs. 20/- per month. The present Court found no data supporting Rs. 20/- and concluded that the plaintiffs' reasonably claimable loss would be the rent they could have realised — the plaintiffs alleged an enhanced rent of Rs. 10/- per month for the two houses.
- Accordingly, while maintaining the lower Courts' findings on tenancy and notice, this Court reduced the damages to Rs. 10/- per month from the date of expiry of the notice (1-9-47) until the date the defendants vacated the houses.
Costs and final directions:
- Because of the partial success (reduction of damages in this Court), both parties were ordered to bear their own costs in this Court.
- The appellant (defendants) were directed to pay the costs of the two lower Courts to the respondents on the reduced scale.
- Leave to appeal was refused.

Holding and Implications

Holding: The court upheld the lower Courts' findings that the tenancy was a monthly tenancy and that the notice to quit (served 31-7-47 to take effect on or before 1-9-47) was sufficient and reasonable; however, the court reduced the damages for unlawful occupation to Rs. 10/- per month from 1-9-47 until vacation.

Implications / Consequences:

Direct effect on the parties: The eviction decree as to tenancy classification and sufficiency of notice stands; the monetary relief for unlawful occupation is reduced to Rs. 10/- per month from 1-9-47 until the defendants vacated the two houses.
Costs: Each party bears its own costs in this Court; the appellant must pay costs of the two lower Courts to respondents on the reduced scale.
Appeal posture: Leave to appeal was refused.
Precedential effect: The opinion applied existing equitable principles of the Transfer of Property Act to leases that arose in a jurisdiction where the Act had not been in force prior to merger, but did not purport to lay down a new rule of law beyond applying those principles to the present facts. No novel precedent was explicitly stated as being created by this decision.

Note: This summary is strictly confined to the matters, findings and authorities expressly set out in the provided opinion. No facts, arguments or holdings beyond those appearing in the opinion have been added.

Show all summary ...

1. This is a defendants' appeal against the concurrent decisions of the two lower Courts decreeing the plaintiff's suit for eviction of the defendants from two houses situated at Rajagangapur and for other consequential reliefs. The plaintiffs alleged that the defendants-were their monthly tenants in respect of the two houses, and that the house rent was originally fixed at Rs. 5-12-0, but it had been raised to Rs. 10/- per month, and as the defendants were in arrears of house rent, they were given due notice to quit on or before 1-9-47, and that they failed to vacate the house in accordance with the notice. The plaintiffs further claimed damages-at Rs. 1-8-0, per day for the unlawful occupation, of the houses from the date of expiry of the notice.

2. The defendants took the plea that the notice was not validly given, that the tenancy was an annual tenancy, and that they were therefore entitled to one year's notice. They also urged that the damages claimed were exhorbitant. The trial Court negatived the defendants' contention and held that it was a monthly tenancy, though the rent used to be paid annually and” that reasonable notice to quit had been given. He assessed the damages at Rs. 40/- per month, but the lower appellate Court while maintaining-his findings as regards the nature of the tenancy, the validity and the reasonableness of the notice-reduced the damages to Rs. 20/- per month.

3. The parties belong to Rajgangpur which was formerly included in the State of Gangpur, a merged area. Admittedly the defendants' predecessors-in-interest had been occupung the disputed houses for more than 20 years. It appears that in both the lower Courts the parties proceeded on the assumption that prior to the merger (1-1-1948) the Transfer of Property Act was not in force in Gangpur State and that consequently the provisions of Chap V of that Act would not in terms apply.

4. But the Courts below held that the equitable principle contained in most of the provisions of the Act should be applied inasmuch as they are based on equity, justice and good conscience. There is no doubt about the correctness of the view taken by the lower Courts about applying the equitable principles of the Transfer of Property Act, even though the Act might not have been in force in Gangpur State prior to the merger. There are several authorities to show that even in territories formerly known as ‘British India’ the equitable principles of the Transfer of Property Act were applied in respect of leases which commenced prior to the coming into force of the said Act, (vide ‘Debendra Nath v. Syamaj Frcsanna’, 11 Cal WN 1124 (A), and the decisions cited therein.

5. The first question for consideration is whether both the Courts were justified in holding that the defendants were monthly tenants. There was no direct evidence to prove the terms of the original tenancy as it took place during the time of the predecessor-in-interest either of the plaintiffs or the defendants. But the plaintiffs relied mainly on certain entries in their account-books which showed that in Sambat 2002 to 2004 rent used to be paid annually but calculated on a: monthly rate of Rs. 5-12-0.

6. The correctness of the entries in the books was not challenged and therefore both the Courts thought that notwithstanding the annual payment, the calculation of rent on a monthly basis would show that the tenancy was really a monthly tenancy. In coming to this conclusion they relied mainly on Ext. 3(c) which showed that in Samtaat year 1995-1996, in which there were 13 months, the rent paid was in excess of what would be payable for 12 months at Rs. 5-12-0 per month.

7. They also relied on the equitable principles laid down in Section 106 of the Transfer of Property Act regarding the tenancy being a monthly tenancy. Apart from the provisions of Section 106 of the Transfer of Property Act, I think the account-books of the plaintiffs are sufficient to support the findings of the Courts below. The mere payment of rent annually would not make the tenancy an annual tenancy, if there are clear indications to show that the rent is calculated on a monthly basis. In ‘Shaller Bhagat v. Tulsi Bhagat’, AIR 1921 Pat 307 (A1) and ‘Chinti Kaharin v. Kripashankar’, AIR 1941 Pat 488 (B), there are some observations to support this view, though the aforesaid two decisions are distinguishable, because they dealt with leases to which Section 106 of the Transfer of Property Act in terms applied. But the principle enunciated therein seems to be definitely of wider import.

8. Mr. Rao, however relied on ‘Shamsoonessa Bibi v. Satya Sebak’. AIR 1919 Cal 529 (C) where it was held that in the case of a lease reserving a yearly rental, the mere fact that the rent was paid in monthly instalments was not sufficient to show that it was a monthly tenancy. But the facts of that case seem to be just contrary to the facts of the present case and I do not think that it will be an authority for the proposition that where the rent is paid annually, but calculated or a monthly basis, the tenancy must be held to be annual tenancy especially when the property is a building used for residential purposes.

9. The calculation of rent on a monthly basis is I think fairly decisive of the question irrespective of the period at which the payment is made. I would also agree with the Courts below that the equitable principles of Section 106 of the Transfer of Property Act should be applied. Hence there is no reason to disturb the findings of both the Courts about the tenancy being a monthly tenancy.

10. The next question for consideration is whether the defendants were given reasonable notice to quit. It is admitted that they were served with notice on 31-7-47 directing them to give up possession of the disputed houses on or before 1-9-47, more than thirty days later. Mr. Rao urged that if the equitable principles of Section 106 of the Transfer of Property Act were to be applied for purposes of holding that it was a monthly tenancy, the other provisions of that section should also apply with equal force and that he was entitled to 15 days' notice expiring with the end of the month of the tenancy.

11. Here the parties are Marwaris governed by Samvat year and consequently the notice should have expired with the end of the Samvat month. I am, however, unable to accept this argument. Though the equitable principles of many of the provisions of the T.P Act may properly be applied in respect of leases which took place prior to the commencement of that Act, it does not mean that every provision of that Act should be applied to the very letter.

12. The provision in S. 106 requiring that the notice should expire with the end of the month of the tenancy need not be literally applied. On the other hand Mr. Rao himself cited several authorities to show that in respect of leases which took place prior to the commencement of the Transfer of Property Act, the Courts have held that reasonable notice would suffice; vide ‘Haridas Tanti v. Upendra Narain’, 16 CLJ 74 (D); and ‘Hemangini v. Gobinda Chowdhury’, 6 Cal WN 69 (E) and ‘Kishori Mohun Roy v. Nand Kumar’, 24 Cal 720 (P).

13. The question as to what would be reasonable notice would depend upon the facts of each case, and it is obvious that no general rule can be laid down. Doubtless in the aforesaid three decisions cited by Mr. Rao, it was held that six months' notice expiring at the end of the year of the tenancy was reasonable notice; but in all those cases it was held that the tenancy was an annual one, whereas in the present case I have upheld the concurrent findings of the two Courts that it is a monthly one.

14. Hence the aforesaid decisions cannot be taken as authority for the view that in the present case also six months' notice would be reasonable notice. I think one month's notice should be considered quite reasonable, bearing in mind the general principles laid down in Section 106 of the Transfer of Property Act.

15. I should further note that in the trial Court the defendants denied the title of the plaintiff as their landlord; this was decided against them and they rightly did not press this point either in the lower appellate Court or before this Court. Mr. Sen, therefore, urged that a tenant who denied the title of the landlord was not entitled to any notice at all and that the question of reasonableness of the notice should be viewed against the background of the conduct of the defendants in challenging the title of the landlord.

16. Mr. Sen, however, does not appear to be quite correct on this legal question, inasmuch as the equitable principles laid down in Section 111(g)(2) of the Transfer of Property Act are to the effect that even if a tenant sets up a hostile title and thereby forfeits his tenancy, it cannot be determined without giving notice in writing. Hence though the tenant may be entitled to notice, the period of one month given in the notice appears to be quite reasonable, considering the conduct of the tenant and the fact that the property is a residential house, and also in view of the finding that the defendants were in arrears of rent for some period. I am, therefore, not inclined to disturb this finding of the Courts below as regards the sufficiency and reasonableness of the notice.

17. Mr. Rao then urged that the damages fixed at Rs. 20/- per month by the lower appellate Court were arbitrary and too high. There is no data on the basis of which the lower appellate Court estimated the damages at Rs. 20/- per month. The plaintiff's case was that the rent of the two houses had been enhanced to Rs. 10/-, per month and all that they could reasonably claim is that if the defendants had vacated the houses on the date of the expiry of the notice, they could have realised the rent at that rate. 5 would, therefore, while maintaining the order of the lower appellate Court in this respect, reduce the damages to Rs. 10/- per month from the date of the expiry of the notice (1-9-47) till the date of the vacation of the two houses by the defendants.

18. In view of the partial success in this Court on the question of damages, both parties should bear their own costs in this Court, but the appellate (sic) should pay the costs of the two lower Courts to the respondents on the reduced scale. Leave to appeal refused.

H.G.P

19. Order accordingly.