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Attorney(S)
  • Shamair Chand with Shri P.C Jain and Puran Chand,
  • H.L Sarin,
Judges
  • Dua, J.
Acts
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Citation Codes
Equivalent Citations
citation codes
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Attorney(S)
  • Shamair Chand with Shri P.C Jain and Puran Chand,
  • H.L Sarin,
Judges
  • Dua, J.
Acts
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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

Chowdhry Kesho Ram (since deceased) filed an application under Section 13 of the Pepsu Urban Rent Restriction Ordinance, 2006 Bk., seeking eviction of tenants from two shops at Sangrur. The Rent Controller allowed the eviction on 29-3-1956 and directed possession to be handed over by 30-4-1956. Narota Ram appealed to the Appellate Authority (District Judge), but that appeal was dismissed on 10-5-1956 and the tenants were directed to deliver possession within two months.

On Chowdhry Kesho Ram's death, Bhagwat Krishan and others (his heirs) instituted execution proceedings on 10-5-1957 in the Court of Subordinate Judge, Second Class, seeking possession by evicting Narota Ram and his son Hari Ram. Narota Ram objected under Section 47, Code of Civil Procedure, contesting the Subordinate Judge's jurisdiction to execute the Rent Controller's order, disputing the competency of the minor sons of Chowdhry Kesho Ram to sue out execution, and pleading a new contract of lease after the eviction order.

The Subordinate Judge overruled objections as to jurisdiction and competency but accepted the plea of a new tenancy (on the basis of rent receipts) and dismissed the execution petition. On appeal the District Judge set aside that dismissal, relying on Jai Lal v. Bhu Dev Bhola Singh to conclude that the heirs did not intend to create a new lease. Earlier appellate remedies had been exhausted: an appeal against the Subordinate Judge's order was dismissed by the District Judge on 30-9-1957 and a second appeal to the High Court was earlier dismissed on 2-5-1958.

The present execution second appeal was preferred from the District Judge's judgment allowing the decree-holders' appeal and dismissing the objections raised by Narota Ram. The court below (this Court) considered competing submissions about whether acceptance of rent after the eviction order created a new tenancy and whether Section 116 of the Transfer of Property Act applied or was excluded by the Patiala Ordinance.

Legal Issues Presented

  1. Whether acceptance of rent by the landlord after an eviction order has been made operates to create a fresh tenancy (under Section 116, Transfer of Property Act) and thereby prevents execution of the eviction decree.
  2. Whether Section 116 of the Transfer of Property Act is applicable in the circumstances of this case, particularly given the existence of the Patiala (Patiala Ordinance No. 8 of 2006 Bk.) as a special code which might exclude the operation of Section 116.
  3. Whether the mere acceptance of amounts described as rent or damages for use and occupation, without more, is sufficient to constitute satisfaction or discharge of an eviction decree so as to disentitle the decree-holder to execute the decree.

Arguments of the Parties

Arguments presented by Mr. Shamir/Shamair Chand

  • The acceptance of rent by the landlord after the eviction order operates to establish a new lease, making the eviction order no longer executable.
  • There are six receipts which, according to counsel, demonstrate the landlords' intention to create a new lease.
  • Reliance on Section 116 of the Transfer of Property Act to show that holding over and acceptance of rent produces a fresh tenancy.
  • Relied on case law (including Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden; Karnani Industrial Bank Ltd. v. Province of Bengal; Hari Singh v. Narain Das; Madhavji Virji v. Lakshmidas Mulji and Co.; Gooderhan and Works Ltd. v. Canadian Broadcasting Corporation; Har Nath v. Mohar Singh; and Jai Lal v. Bhu Dev Bhola Singh) to support the contention that acceptance of rent after expiry/determination of lease evidences tenancy continuation or renewal.

Arguments presented by Mr. Sarin

  • The Patiala Ordinance No. 8 of 2006 Bk. is a self-contained code that excludes applicability of other laws, including Section 116 of the Transfer of Property Act.
  • Relied on N. V. Kupaswami Ayyar v. Mahadeva Chettiar (AIR 1950 Mad 746) where Section 116 was held inapplicable to matters arising under the Madras Buildings (Lease and Rent Control) Act; relied on the reasoning of Horwill J. that Section 116 must be read in reference to Section 111 of the Transfer of Property Act and therefore would not apply where lease has not been determined in the ways set out in Section 111.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Jai Lal v. Bhu Dev Bhola Singh, 1956-58 Pun LR 267; AIR 1956 Punj 256 Used to determine whether heirs intended to create a new lease after landlord's death. The District Judge relied on this decision and concluded there was no new lease intended to be created by the heirs of Chowdhry Kesho Ram; the Court records this application by the lower court.
Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden, AIR 1949 FC 124 Majority view that holding over of a lessee or under-lessee produces a new tenancy, but a new tenancy requires a bilateral act. The court notes the majority view but emphasizes the opinion in the same case that a new tenancy requires bilateral consent (offer and definite assent). The court does not accept the argument that acceptance of rent alone automatically creates a new tenancy.
Karnani Industrial Bank Ltd. v. Province of Bengal, AIR 1951 SC 285 Clarified two necessary conditions for Section 116 to apply: (1) lessee in possession after termination; (2) lessor or representative accepts rent or otherwise assents to continued possession. The court cites this decision to state the legal requirements of Section 116 and uses it to analyse whether those requirements are satisfied in the present case.
Hari Singh v. Narain Das, AIR 1945 Lah 175 Authority relied on by counsel in support of the proposition that acceptance of rent may indicate consent to continue tenancy. The decision was cited by counsel in support of his submissions; the court lists it among authorities relied upon but does not treat it as determinative without examining the necessity of bilateral assent.
Madhavji Virji v. Lakshmidas Mulji and Co., AIR 1924 Bom 99 Cited by counsel as authority on effect of acceptance of rent/holding over. Included among the cases relied upon by counsel; the court records the citation but focuses on the requirement of landlord assent and consensus ad idem from other authorities.
Gooderhan and Works Ltd. v. Canadian Broadcasting Corporation, AIR 1949 PC 90 Cited by counsel in support of the effect of acceptance of rent or holding over. Noted as one of the authorities relied on by counsel; the court does not base its decision solely on this precedent and emphasizes broader principles (bilateral assent, requirements of Section 116).
Har Nath v. Mohar Singh, 1931-32 Pun LR 469; AIR 1931 Lah 675 (1) Cited by counsel as supporting acceptance-of-rent creating tenancy proposition. The precedent is listed among those cited by counsel; the court discusses general principles drawn from multiple authorities rather than treating this case as controlling.
N. V. Kupaswami Ayyar v. Mahadeva Chettiar, AIR 1950 Mad 746 Held Section 116 inapplicable to matters arising under the Madras Buildings (Lease and Rent Control) Act; used to support exclusion of Section 116 by a special rent law. The court records this reliance and cites Horwill J.'s observation that Section 116 must be read with other provisions (e.g., Section 111); the court uses this line of authority to consider whether Section 116 is displaced by the Patiala Ordinance.
Baldeodas Mahavirprasad v. G. O. Sanavalla, AIR 1948 Bom 385 Observed that mere acceptance of rent is not by itself sufficient to create a new tenancy; acceptance must be attributable to landlord assent to a new tenancy. The court invokes this authority to support the proposition that mere acceptance of rent after an eviction order is not conclusive of a new tenancy and that acceptance must reflect landlord assent.
Ghulam Ghouse Saheb v. Chowdri D. Raja Rajasthan, AIR 1947 Mad 436 Cited by one side; relevance questioned in the opinion. The court states this authority appears not very relevant to the point before it and therefore need not detain further consideration.
Mahadeo Prasad v. Sulekha Sarkar, AIR 1954 Cal 404 Held that consensus ad idem is necessary for renewing a lease or treating a lease as subsisting. The court relies on this authority to emphasize the necessity of mutual agreement between landlord and tenant for a lease to be considered renewed.
Panchanan Ghose v. Haridas Banerji, AIR 1954 Cal 460 Agreement between the parties to treat the lease as continuing is necessary to establish waiver of a notice to quit. The court cites this decision to reinforce that an agreement between parties is required to treat a lease as continuing; used in analysis of whether the eviction order was waived or discharged.
Manindra Nath v. Man Singh, AIR 1951 Cal 342 Cited in the record but regarded as not to the point. The court notes that this authority is not to the point and need not be discussed.
Dasrathi Rai v. Kali Charan, AIR 1951 Pat 372 Observed that the conception of a tenant under the Bihar Buildings (Lease, Rent and Eviction) Control Act is novel and not in keeping with ordinary ideas of tenancy. The court records this observation and notes that counsel submitted the observation would be equally applicable to the Patiala Ordinance; the court considers the submission but grounds its decision on other principles.

Court's Reasoning and Analysis

The court's analysis proceeds by addressing the competing legal contentions about the effect of acceptance of rent after an eviction order and the applicability of Section 116, Transfer of Property Act:

  1. The court rejects the submission that acceptance of rent by the landlord after the eviction order "automatically" creates a fresh tenancy and thus defeats execution. The court notes that authorities (including the Federal Court in Kai Khushroo) indicate that to bring a new tenancy into existence there must be a bilateral act: an offer by the lessee (continuing in occupation after the interest has ceased) and a definite assent by the landlord (acceptance of rent) which must be acceptance "as such" recognizing the tenancy right asserted.
  2. The court cites Karnani Industrial Bank's case to set out two necessary conditions for Section 116 to operate: (1) the lessee must be in possession after termination of the lease; and (2) the lessor or his representative must accept rent or otherwise assent to the lessee's continued possession. The court uses these criteria to evaluate whether a new tenancy arose here.
  3. The court further relies on authorities (Baldeodas Mahavirprasad; Mahadeo Prasad; Panchanan Ghose) emphasizing that mere acceptance of rent is not in itself sufficient to create a new tenancy — the acceptance must be attributable to an assent by the landlord and, generally, consensus ad idem (mutual agreement) is required to treat a lease as renewed or subsisting.
  4. The court considers the submission that Section 116 is displaced by the Patiala Ordinance, noting N. V. Kupaswami Ayyar v. Mahadeva Chettiar (Madras decision) and the reasoning of Horwill J. that Section 116 cannot be divorced from other provisions (such as Section 111) of the Transfer of Property Act. The court observes that Section 116 contemplates a lease determination in the manner set out in Section 111; because the lease in this case was not determined in any of the ways specified in Section 111, Section 116 "may not apply."
  5. The court adds a distinct point: Section 116 may be inapplicable to cases where decrees or orders for ejectment have been obtained. In those situations the central question is whether the decree has been satisfied or discharged so as to disentitle the decree-holder to execute his decree. The court states that acceptance of rent may be one circumstance to consider but is not conclusive proof of satisfaction of the decree; this aspect was not fully addressed by Mr. Shamair Chand.
  6. Applying these principles to the facts, the court reasons that unless the landlord and tenant consciously agree to enter a fresh lease and the landlord clearly gives up rights under the eviction order, mere acceptance of amounts (whether called rent or damages for use and occupation) will not make the eviction order incapable of execution. The court also notes that nothing was said at the Bar whether Section 116 is in force in the territory, but even assuming it is in force, the court considers it excluded by the special provisions of the Patiala Ordinance.

Holding and Implications

Holding: The appeal fails and is dismissed with costs.

Implications:

  • Direct effect on the parties: The decree-holder's appeal was allowed by the District Judge and, on the appeal to this Court, the execution second appeal has been dismissed; the court confirms that mere acceptance of rent after an eviction order does not automatically create a new tenancy that would prevent execution of the eviction decree.
  • The court held that Section 116, Transfer of Property Act, requires both continuing possession by the lessee after determination and definite assent by the landlord; mere receipt of rent, without clear assent or consensus, is not conclusive. The court further observed that Section 116 may be excluded by the special provisions of the Patiala Ordinance and may be inapplicable where an ejectment decree exists.
  • No broader legal precedent was announced beyond the application of established principles to these facts; the decision resolves the dispute between the parties on execution and the effect of acceptance of rent in the circumstances described.

This summary is confined to the material explicitly contained in the provided opinion and does not add facts or inferences beyond that text.

Show full summary ...

    Narota Ram, v. Bhagwat Krishan And Others,

    (1) This execution second appeal has been preferred from the judgment of the learned District Judge, Sangrur, allowing the appeal of the decree-holders and dismissing the objections raised by Narota Ram, the present appellant.

    (2) Chowdhry Kesho Ram of Sangrur (since deceased) filed an application under S. 13 of the Pepsu Urban Rent Restriction Ordinance, 2006 Bk., for eviction of the tenants from two shops situated at Sangrur. The Rent Contoller allowed the application on 29-3-1956 and directed the tenants to hand over the possession to the landlord on or before 30-4-1956. Narota Ram preferred an appeal to the District Judge, as Appellate Authority, against the order of eviction, but the same was dismissed on 10-5-1956 and the tenants were directed to hand over possession of the disputed shops of the landlord within two months of the order of the Appellate Authority.

    It appears that Chowdhry Kesho Ram did not live long and on his death Bhagwat Krishan and others sued out execution on 10-5-1957 in the Court of Subordinate Judge, Second Class and asked for possession of the disputed shops by evicting Narota Ram and his son Hari Ram. Narota Ram raised objections under S. 47, Code of Civil Procedure, challenging the jurisdiction of the Subordinate Judge to execute the order of the Rent Controller, disputing the competence of the minor sons of Chowdhry Kesho Ram to execute the eviction order and pleading a new contract of lease after the date of the eviction order. The learned Subordinate Judge overruled the objections regarding jurisdiction and competency of Bhagwat Krishan and others to sue out execution.

    An appeal against this order was also dismissed by the learned District Judge on 30-9-1957 and a second appeal to this Court met with no better fate on 2-5-1958. With respect to the plea of a new tenancy the learned Subordinate Judge upheld the contention, in view of certain receipts showing payment of rent by the tenants, and on this ground dismissed the execution petition. On appeal the learned District Judge set aside the order of the first Court and relying on Jai Lal v. Bhu Dev Bhola Singh, 1956-58 Pun LR 267: (AIR 1956 Punj 256), came to the conclusion that there was no new lease intended to be created by the heirs of Chowdhry Kesho Ram. It seems that on the death of Chowdhry Kesho Ram his heirs were not in a position immediately to start reconstruction of the building and therefore they merely postponed eviction proceedings for about a year.

    (3) Mr. Shamir Chand has very strongly urged that the acceptance of rent by the landlord after the order of eviction establishes a new lease with the result that the order of eviction is no longer executable. He submits that there are no less than six receipts which, according to him, establish the intention on the part of the landlords to create a new lease. He has also in this connection placed reliance on Section 116 of the Transfer of Property Act which lays down the effect of holding over. The decision of the Federal Court in Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden, AIR 1949 FC 124, as also the decision of the Supreme Court in Karnani Industrial Bank Ltd., v. Province of Bengal, AIR 1951 SC 285; in both of which the scope and effect of Section 116 of the Transfer of Property Act have been considered, have also been relied upon.

    The counsel contends that as soon as rent is accepted by the landlord, a fresh tenancy would automatically come into being, superseding the previous order of eviction. I regret I do not find it possible to agree with this contention. It is true that according to the majority view of the Federal Court in Kai Khushroo Bazonjee Capadia's case, AIR 1949 FC 124, the tenancy which is created by the holding over of a lessee or under-lessee is a new tenancy in law, but, as it has been held in this very case, to bring a new tenancy into existence, there must be a bilateral Act.

    What is contemplated by Section 116 of the Transfer of Property Act is that on one side there should be an offer of taking a renewed or fresh demise, evidenced by the 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. The assent of the landlord which is to be founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays it.

    Patanjali Sastri, J. of course went a little further and observed that there must be consensus between the parties and not an option exercisable by the lessor alone. In the later Supreme Court judgment in Karnani Industrial Bank's case, AIR 1951 SC 285, to which also Fazl Ali and Mukherjea, JJ. were parties (they were also parties to the Federal Court case), two things were held to be necessary for the application of Section 116, Transfer of Property Act: (1) the lessee should be in possession after the termination of the lease; and (2) the lessor or his representative should accept rent or otherwise assent to his continuing in possession.

    Mr. Shamair Chand contends that in the instant case rent having been accepted after the expiry of the lease shows that the landlord consented to the tenant continuing in possession. The counsel has also in support of his argument relied on Hari Singh v. Narain Das, AIR 1945 Lah 175; Madhavji Virji v. Lakshmidas Mulji and Co., AIR 1924 Bom 99; Gooderhan and Works ltd., v. Canadian Broad casting Corporation, AIR 1949 PC 90; Har Nath v. Mohar Singh, 1931-32 Pun LR 469: (AIR 1931 Lah 675 (1); and 1956-58 Pun lR 267: (AIR 1956 Punj 256).

    (4) Mr. Sarin has, on the other hand, contended that the Patiala Ordinance No. 8 of 2006 Bk. Is a self-contained Code and it excludes the applicability of all other laws, including Section 116 of the Transfer of Property Act. He also places reliance on N. V. Kupaswami Ayyar v. Mahadeva Chettiar, AIR 1950 Mad, 746, in which Section 116, Transfer of Property Act, was held inapplicable to matters arising under the Madras Buildings (Lease and Rent Control) Act.

    In the course of judgment Horwill J., who prepared the judgment on behalf of the Bench, observed that it was not possible to divorce Section 116, Transfer of Property Act, from the other provisions of that Act and when Section 116 speaks of the determination of the lease, it must have reference to a determination of the lease such as is contemplated in Section 111, Transfer of Property Act, which sets out the various methods of such determination. It is obvious that in the instant case the lease has not been determined in any of the ways set out in Section 111 of the Transfer of Property Act, and therefore, as held in the above decisions, Section 116 may not apply.

    (5) In my view Section 116 may also be inapplicable to this case on the ground that it does not deal with cases where decrees or orders for ejectment have been obtained. In such cases the question which arises for consideration always is to see as to whether or not the decree has been satisfied or discharged so as to disentitle the decree-holder to execute his decree. Acceptance of rent may be one of the circumstances to be taken into consideration, but it would not be conclusive for establishing satisfaction of the decree so as to make it incapable of execution. In the present case Mr. Shamair Chand has not addressed any arguments on this aspect of the matter.

    In Baldeodas Mahavirprasad v. G. O. Sanavalla, AIR 1948 Bom 385, while dealing with the provisions of Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, it was observed that the mere acceptance of rent is not by itself sufficient to bring into existence new tenancy as contemplated by Section 116, Transfer of Property Act, as it used to be prior to the passing of the Rent Restriction Act. Acceptance of rent, according to this authority, must be attributable to an assent by the landlord to bring about a new tenancy. Ghulam Ghouse Saheb v. Chowdri D. Raja Rajasthan, AIR 1947 Mad 436, cited by Mr. Sarin, appears to be not very relevant to the point before me and therefore need not detain us.

    In Mahadeo Prasad v. Sulekha Sarkar, AIR 1954 Cal 404, consensus ad idem was considered to be necessary for renewing the lease or for treating the lease as subsisting. In Panchanan Ghose v. Haridas Banerji, AIR 1954 Cal 460, also an agreement between the parties to treat the lease as continuing was considered to be necessary for establishing waiver of a notice to quit. Manindra Nath v. Man Singh, AIR 1951 Cal 342, is also not to the point and need not be discussed. In Dasrathi Rai v. Kali Charan, AIR 1951 Pat 372, which has also been relied upon by the learned counsel for the respondents, it has been observed that the conception of a tenant as conceived by the Houses and Rents-Bihar Buildings (Lease, Rent and Eviction) Control Act is entirely novel and not in keeping with the ordinary ideas as to what a tenant is. The counsel submits that this observation would be equally applicable to the case of the Patiala Ordinance in question.

    (6) After considering the arguments addressed at the Bar, in my view unless the landlord and the tenant consciously agree to enter into a fresh lease and unless the landlord clearly gives up his rights under the eviction order, the mere acceptance of an amount, whether described as rent or damages for use and occupation, to which he would clearly be entitled, so along as the tenant or ex-tenant, by whatever name the person in possession is called, remains in occupation, would not make the eviction order incapable of execution. Nothing has been said at the Bar whether the provisions of Section 116 of the Transfer of Property Act are actually in force in the territory in question, but assuming that they are, in my view these provisions would be excluded by the special provisions contained in the Patiala Ordinance.

    (7) For the reasons given above, this appeal fails and is dismissed with costs.

    (8) Appeal dismissed.

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    Comments

    Narota Ram, v. Bhagwat Krishan And Others,
    (Oct 23, 1959)