V. Natesa Naicker v. P. Arumugha Naicker.

JUDGMENT

This Second Appeal coming on for hearing on Friday the 14th July, 1967, Thusday tho 20th July, 1967, Friday the 11th August, 1967 and having stood over for consideration till this day the Court delivered the following Judgment:

In this Second Appeal by the defendant in a suit for possession of property within tho City, with damages for use and occupation it raised, a somewhat important problem as to the scope of S. 12 of the Madras City Tenant' s Protection Act Act III of 1922. There are a number of decisions on this section but there is an area where its applicability, it is stated, calls for careful consideration.

The facts of the case which at this stage are beyond controversy may first be set out. The defendant became a tenant of vacant land of an extent of 1200 square feet shown as ABFE • in the plaint plan some years prior to 1955 under the then owner Krishnaswami Pillai at a monthly rent of Rs. 3. He put up a hut thereon and was in occupation of it, when Madras Act XIX of 1955 came into force extended the benefit of Madras Act III of 1922 also to tenancies created prior to the 10th of September, 1955. There is no written document to evidence this tenancy or its terms and the Court below (lower appellate Court) has concluded that the tenancy under which the defendant entered on the land and put up his hut was a tenancy from month to month applying the presumption Under S. 106 of the Transfer of Property Act, the rent agreed being Rs 3.per month. While he was thus in occupation of the land with his own superstructure thereon, a registered lease deed came into existence between him and his then landlord Krishnaswami Pillai on 25-5-1956. This deed, while continuing the same rent, provided that the tenancy would be for a period of three years. It is stated in the document that the three year period was granted at the request of the tenant Tfce rent was made payable by the fifth of very month, arrears to carry interest. There was prohibition against subletting of the property, and provision for eviction of the tenant without reference to the period of tenancy fixed, if the rent should left in arrears for three successive months or there should be default in the payment of rent under the current laws. Despite the provision for a tenancy of three years, the deed provided that on a month's prior notice, the tenancy could be terminated on either side, by the landlord if he found subletting or if he or his heirs required the land, and by the tenant if he did not require the land. On the termination of the tenancy, the tenant had to deliver vacant possession of the site and on his failure to do so, the landlord could claim damages for use and occupation for every day of continuance in possession by the tenant. The lease contained provisions against keeping cattle on the land. If any Corporation taxes were payable for the property, the tenants should pay them. The present plaintiff became the owner of the disputed side on his pur chase from Krishnaswami Pillai, the original landlord of the defendant, of an extent of 3600 sq. ft. under the registered sale deed, Exhibit A. 2 on 7-2-1958. There is evidence that the defendant attorned to the plaintiff after his purchase.

The suit out of which this second appeal arises was filed by the plaintiff for possession of the site on default of the tenant in the regular payment of rent, after duly terminating the tenancy in terms of the lease deed. The plaintiff charged the defendant with encroaching on a further extend of 600 sq. ft. but as defendant disclaimed any encroachment, the dispute centred round only the extent of 1200 sq. ft. which the defendant had taken up on lease. In defence to the action for eviction, it was contended that the defendant was a tenant entitled to the protection of the City Tenants Protection Act, hereinafter referred to as the Act, and that the registered rental agreement dated 25-5-1956 did not grant a fresh lease but was only a re-affirmation of the then existing tenancy under the Act, which had commenced prior to September 1955. The plaintiff put forward a case that the defendant's occupation and putting up of the hut was for the first time under Ex. A-1. This has been found against by both the Courts below on substantial evidence. It has been found by both the Courts that the defendant's tenancy of the land had commenced prior to the 10th September 1955 and that prior to that date, he had erected the hut in question. There was no application by the defendant under Section 9 of the Act for a direction to the landlord to sell the land to him, the defendant contending himself with pleading that there had been no proper and valid termination of the tenancy under Section 11 of the Act. If the Act applied the suit for ejectment must be preceded by a notice in conformity with the previsions of Sec. 11 of the Act. The notice must be given three months in advance and the demand for surrender of the land and building must be accompanied by an offer of compensation for the building and trees if any, setting out the amount of compensation. The trial Court accepted the defence under Sec, 11 of the Act, and so while decreeing the suit for possession in respect of 600 sq. ft. over which no rights were claimed, rejected the plaintiffs claim for possession of the 1200 sq ft. now in dispute. In respect of the tenancy, the plant iff was given a decree only for the arsears of rent due. According to the trial Court, there was no new tenancy under exhibit A-1 to deprive the tenant of the protection of the Act.

On appeal, the learned Principal Judge, City Civil Court, held that the tenancy under Ex. A-1 was a freh tenancy after the Act, and that therefore the defendant cannot claim protection under the Act. The learned Judge painted out that whereas the former tenancy under Ex. A-i was for a fixed period of three years and that the duration of the period of tenancy was clearly a material term of any tenancy. In that view he decreed eviction as prayed for.

There can be no doubt that the tenancy under Ex. A-1 differs materially from the tenancy under which the land was originally occupied. There are importaat convenants governing the rights of parties in the new tenancy. There is a prohibition against of the lease and against sub-letting. Any transfer or sub lease entitled the landlord to evict the tenant after notice. Normally in the absence of contract or usage to the contrary, a lessee may under Section 108 (j) of the Transfer of Property Act, transfer absolutely or by way of mortgage or sub-lease, the whole or any part of his interest in the property. The original lease was an oral one, a lease of indefinite duration from month to month at a rent of Rs. 3/-The question that arises for consideration is whether notwithstanding the material variation brought about by Ex A-1 in the tenancy relationship between the parties the defendant could claim the protection of the Act, and he considered a tenant as defined in Sec. 2 (4) of the Act.

To summarise now the arguments of the learned Counsel oa either side Mr. M.S Venkatarama Ayyar, learned Counsel, appearing for the landlord submits that the effect of the new registered lease under Ex. A-1 is to bring a new tenancy between the parties extinghishiag the original tenancy.

Ex. A-1 is not just a record of the terms of a pre-existing tenancy. While there is continuity inoccupation fresh terms govern the occupa tion. Though the rate of rent has not been changed, even there, there is a stipulation as to interest on arrears at Rs 0-0-3 (old coinage) per day per rupee. Also there Ss restriction in enjoyment keeping of cattle is prohibited. Thus every term of the old tenancy is given the go by and a wholly fresh contract of tenancy substituted. Learned Counsel submits that it is well established law, if a leases accepts a new lease, that by Itself is a surrener of the old lease. The new lease could not be granted unless the old one was surrendered. There is an extinguishment of the lease by implied surrender on the substitution of the new lease. It is said that the Act applies only to tenancies created before the 10th September 1955 [See S. 1 (3)] and a tenant who can claim the benefit of the Act in terms of S. 2 (4) of the Act must be a person liable to pay rent in respect of the land under a ‘tenancy agreement’ expressed or implied prior to that date, or a tenant continuing in possession after the determination of the tenancy agreement aforesaid or his heirs. In the present case, as there is an express agreement of tenancy no question of holding over under any prior tenancy arises for consideration and that the liability of the tenant here to pay rent is under the registered tenancy agreement entered into after the Act. It is not disputed that the liability to pay rent is in terms of the new tenancy. Therefore it is said that the defendant is not a tenant as defined under the Act. For a person to be a tenant under the Act, according to the learned Counsel, is is not sufficient that he was a tenant when the Act came into force. As the benefits under the Act could be claimed only by a person who is a tenant as defined under the Act, he must continue and remain as a tenant under the Act at the time when he claims the benefits under the Act. The benefits of the Act cannot be claimed by a person who has covenanted for the continuance of his occupation of the site under a new lease after the com mencement of the Act as the Act has no application to tenancies created after the Act.

As against this, the arguments of the learned Counsel for the respondent Mr. A. Sundaresan may be summed up thus: First on the merits, there has been no new tenancy in this case. The registered lease only affirmed and conti nued the original occupation as tenant. The original relationship between the parties was not altered. The substance of tenancy is the transfer of the right to enjoy the land. That transfer stands, only certain terms mutually agreed upon have been added, to govern the original relationship between the parties. Learned Counsel submits that S. 12 of the Aet precludes the landlord from setting up tie plea that by reason of a fresh contract, the tenant bad lost the benefits he had become entitled to under the Act. A lease is nothing but a contract. Ex. A-1 may be a lease, all the same it is a contract enected into by a tenant under the Act. The effect of the contract is to vary the prior stipulations but here S. 12 read with S. 13 of the Aet protects the tenant. To the extent required to protect the tenant, the provisions of the Transfer of Property Act which may in law bring about a nsw tenancy despite the continuance of the old occupation are abrogated.

S. 12 runs thus:

“Nothing in any contract made by a tenant shall take away or limit his rights under this Act, provided that nothing herein contained shall affect any stipulations made by the tenant in writing registered as to the erection of buildings in so far as the relate to buildings erected after the date of the contract.”

S. 13 provides that the application of the Transfer of Property Act to the extent necessary to give effect to the provisions of the Act be deemed to have been repealed or modified.

S. 12 secures to the specified class of tenants the benefits the Act, intends them to have, by providing that the tenants' rights under the Aet, cannot be taken away or limited by contracts entered into by the tenants. The rights under the Act, include the right to compensation on ejectment under S. 3, the fixation of fair and reasonable rent at the instance of the tenant under |S. 7-A, and the provisions under S, 9 for getting a direction from the Court to the landlord to sell the land to the tenant if the landlord should seek to evict the tenant and the requirement as to three months notice in S. 11 coupled with an offer by the landlord to pay compensation for the building and trees before any suit is instituted for ejectment of the tenant. Prima facie it could be said that if the effect of the new tenancy agreement order Act. 5 to take away completely the rights that the tenant had acquired by tenant under the Act, recognition of it would be in the teeth of S. 12 and 13 of the Act. We are not concerned here with the proviso to S. 12. Weare on the main part of the section. Learned Counsel for the landlord submitted that the contracts referred to in S. 12 must be limited to contracts entered into at the time when the original tenancy was created or contracts before the Act and cannot refer to contrasts entered into subsequent to the Aet. I am unable to limit the word contraet referred to in S. 12 to contracts made before the Act. Clearly the reference is to contracts in relation to a tenancy under the Act whether made before or after the Act. Of course a contract made at the time of the creation of the original tenaney or terms agreed in the original tenancy agreement before the Act would clearly fall within the elearly fall within the expression. The phrase “by a tenant” in the words “contract made by a tenant” in S. 12 appears to me to be descriptive of the person making the contract, and so without doubt, would include also contracts ontered into after the Act came into force. What has now to be examined is whether a contract for fresh tenancy called be felled by the pro hibition of S. 12. It may look like argufsg in a circle to say that the tenant cannot be deprived of the benefits of the Act by any eontraet made by him which would directly take away the benefits but that he can lose the benefits if the contract is contrued as a new tenancy after the Act. One way reading S. 12 is to regard it as hitting at contracts made by the tenant in relation to his tenancy, but not extinguishing the original tenancy engagements entered into by a tenant which deprive him of the protection of the Act, while maintaining the tenancy whether they form part of the original agreement or subsequent engagements. Of course, we are assuming that the fresh contract of tenancy has been properly entered into and is not vitiated by any overreaching, fraud, mistake or mis-representation. Take a case where the tenant at a particular time finds that if an eviction is sought, he may not find the money for purchasing the land but he could net afford to vacate the premises and move elsewhere. He therefore prefers to waive the benefits conferred on a tenant under the Aet by taking a fresh tenancy for a period of ten years. Is the tenant in such a case to be permitted after ten years to resurrect the tenancy he had voluntarily surrendered and turn it against the landlord after the expiry of the period of lease? The Act does net pro hibit action for eviction by the landlord. Nor dees it tie the tenant to the land whether he wants to stay on there or not. Voluntary surrender of a tenancy under the Act is not prohibited and there is no question cf general public policy being involved to vitiate the acceptance of the surrender by the landlord. A legal protection should not be regarded as a legal disability. Much could be said on both sides but I find the ease law clear and there is no need for me to make any serious attempt at solving the problem possed.

I shall first refer to some of the decisions where the parameuney of the benefits conferred upon the Act over contracts entered into by tenants have been the subject of consideration. In A. Ponnambala Achari v. K. Mani(1) Ramachandra Iyer, J., as he then was, had to consider the provisions in a lease for surrender ef possession by tho tenant after removal of tho superstructure. The learned Judge was principally concerned with the pre? vise to 8. 32 of the Act, in relation to the con tention en behalf of the landlord that an agreement to deliver vacant possession after the removal ef the superstructure was a stipulation as to the erection ef the building gives under the proviso and that therefore the landlord could take advantage of the previse. Dealing with this contention, the learned Judge observed at page 516 thus:

“The Madras City Tenants Protection Aet was intended to protect tenants of land who had spent moneys in erecting buildings. This protection was given notwithstanding the faot that the lease was terminable. S. 12 of the Aet will have to be read consistent with the object and provisions of the enactment…… The provisions of S. 9 of the Act are not subject to any contract between the parties. S. 12 cannot be read so as to enable the parties to contract out of the statute.”

In Vajrapuri v. New Theatres Carnatic Talkies Limited affirmed by the Supreme Court, also a ease relating to the proviso to S. 12 ef the Act, the learned Judges who formed the Division Bench remarked thus:

“The first part of g. 12 is in absolute terms. It categorically states that nothing contained in any contract made by a tenant shall have the effect of taking away or limiting his rights under the impugned Act.” (Page 477).

The Court there was concerned with a stipulation in the original contract ef lease providing for the tenant surrendering vacant possession after removing the building constructed by him upon the land. Tho Supreme Court affirmed this decision in Vajrapani v. New Theatres Carnatic Talkies Limited(2) and Shah, J., who delivered the majority of the judgment observed thus:

“S. 12 of the Act consists of two parts: by the first part it enacts that the rights conferred upon the tenant under the Act may net be taken away or limited by any contract made by a tenant. Such rights would, amongst others, include the right to claim compensation under Ss. 3 and 4 and the right te purchase the land from the lessor by erder of the Court under S. 9. By the Second Part ef 8. 12, the protection granted by the first part does not avail the tenant in certain conditions S. 12 has manifestly been enacted to effectuate the object of the Act which is set out in the preamble viz. “to give protection te tenants who…… have constructed buildings en thers' lands in the hope that they would net be evicted so long as they pay a fair rent for tho land.”

The legislature has sought thereby te protect tenants against any contractual engagements which may have been made expressly or by implication to deprive themselves wholly or partially of the protection intended to be conferred by the statute. And the only class of cases in which the protection becomes ineffective is where the tenant has made a stipulation in writing registered as te the erection of buildings erected after the date of the contract of lease. The restriction is therefore made only in respect of a limited class ef cases which expressly attract the description of the, stipulation as to the erection of buildings. Having regard to the object of the Act and ths language used by the Legislature, the excepstion must be strictly construed……It is true that the operative part of S. 12 protects the tenant against deprivations or limitation ef his rights under the Act and the rights conferred by the Act do not directly relate to covenants “relating to ereetien of buildings…… stipulations concerning erection of buildings……in registered leases, or eontraets subsequent to the leases, providing for forfeitureon failure te comply with the terms of the lease relating to the erection of buildings may undoubtedly involve limitation or deprivation of the rights of the tenant under the Act and to that extent the protection conferred by S. 12 in favour ef the land may be lost.”

It must be noticed that the last part of the citation above given takes in also contracts subsequent to the original lease as falling within the expression “contract” in S. 12. Earlier the learned Judge says that the object of the Act is to protect tenants against any contractual engagements which may have been made expressly or by implication to deprive themselves wholly or partially of the protection intended te be conferred by the statute.

In Subramania Iyer v. M.H.P Fund Ltd. where again, the scope of proviso to S. 12 came up for consideration with reference to a lease deed which provided for the surrender of possession of the entire property including the superstructure on the expiry of ths lease and fixed the maximum amount payable for the superstructure, following the decison of the Supreme Court in Vajrapani Naidu v. The New Theatres Carnatic Talkies Ltd. a Division. Bench of this Court observed:

“It is very clear that any stipulation to surrender possession of the property with the superstructure, or to accept as compensation any value other than the value to be determined under S. 3 will sot bs sueh a term as will fall within the proviso to S. 12, thereby disentitling the tenant to the benefits cf S. 9 of the Act.”

In Venkataswamy Naidu v. Narasram Narayandos the Supreme Court while restoring the decision of Anantanarayanan, J., as he then was, in Narayandoss v. Venkataswamy Naidu(3) and reversing that of the Division Bench on Letters Patent Appeal therefrom in a case where there was a lease in writing not registered containing a covenant not to raise any building but the leases ia contravention of the covenant put up a bulling, observed that under S. 12 no contract could be made affecting the Sections earlier mentioned. Referring to the judgment in the Second Appeal it is said at page 4:

“He (Anantanarayanan, J.) pointed out; S. 13 of the Act specifically provived that the Transfer of Property Act must be deemed to have been repealed to the extent necessary to give effect to the Act so that there was no scope for harmonizing the Act with the Transfer of Property Act. We entirely agree with the learned Judge's views.”

In none of the decisions above noted, had the Court to consider a case where subsequent to the Act, a fresh lease had come into existence. The case for the tenant new submitted is that an agreement of fresh lease is nothing but a contract and the effect of the agreement for lease is take, away the rights accrued prior. In Thayarammal v. Junus Chettiar(4) there was a fresh registered rental agreement after the Aet came into force containing certain stipulations relating to buildings. On the land there were buildings erected before the Act and a stipulation in the new agreement provided for vacating and delivering the building on the land, but that was specifically in relation to a building not in existence previously. The learned Judge Pandrang Row, J. had to consider the proviso in the case and in the course of the discussion it is observed:

“I am of opinion therefore that Ex. E (the fresh registered agreement) does in no way alter the nature of the tenancy of deprive the tenants of anything which but for that agreement they would have been entitled to under the Act;………the question is whether the defendant's tenancy is a tenancy to which the Act applies and there can be no doubt that the Aet applies to that tenancy. The tenancy was only a continuation of a tenancy to which the Act applied when it came into force.”

This decision was reversed on Letters Paten Appeal by the Division Bench in Thayarammai v. Junus Chettiar(5) but on a different point based on the finding that the tenant did not own the superstructure on the land. The question now under consideration was not decided by the Division Bench, The learned Judges observed at page 744:

“One of the questions argued on behalf cf the appellant is that this tenancy agreement being in the nature of a contract entered into after the Act came into force, the provisions of the Act cannot apply to it. It is unneces sary to decide this point, for there is another and a clearer ground on which we think the appellant is entitled to succeed.”

But I find that the question has been actually decided in Ranganatham Chetty v. Ethirajulu Naidu(6) and the decision was affirmed by the Judicial Committee in Ranganatham Chesty v. Ethirajulu Naidu(7). In that case there was a lease in favour of the appellant granted on the 18th of October, 1912 for a period of ten years, the lease to expire on the 30th September, 1922. The appellant continued to remain in occupation after the expiry of the lease and on The 1st of February, 1923 executed a fresh lease for ten years to take effect from the 1st cf October, 1922. The City Tenants Protection Act came into force meanwhile on the 21st February, 1922 and the question considered by this Court was whether the Act was not applicable to the tenancy in question by reason of S. 12 of the Act. This Court referring to S. 12 observed:

“It seems to m® that the fallacy underlying that argument is that whereas S. 1 (iii) gays that the Act does not apply to this tenancy it is sought to make a part of the Act to it. The answer to that agreement is that if the Act does not apply to this tenancy, this Act is wholly inapplicable and not partly. For these reasons, the argument based on S. 12 of that Act must be rejected.”

The Judicial Committee in affirming the decision of this Court observed at page 176 thus:

“There Lordships are of opinion that the latter part of the definition of “tenant” in S. 2(4) refers to persons who without a tenancy title continue in possession after the termination of the tenancy, and that the benefit of the remaining sections including S 12, on which the appellants sought to rely, cannot be of avail to the appellants unless and until they have shown that the tenancy here in question was created before the commencement of the Act within the meaning of S. 1 (3)”.

Dealing with the argument that the lease of 1923 was merely a continuation of the earlier lease, there having been an earlier verbal agreement even before the expiry of the earlier lease for a fresh lease for ten years, their Lordships observed at page 177 thus:

“But their Lordships are clearly of opinion that, though the physical possgssion was continuous, the possession from 1st October 1922 was attributable to a new tenancy, which was formally embodied in the lease, dated 1st February 1923, the increased rent thereby provided having been paid by them from 1st October 1922, in terms of the verbal agreement for a lease. Their Lordships, accordingly, concur in the view of both the Courts below, that tbe tenancy here in question was not created before the commencement of the Act,. and that the Act, does not apply.”

No doubt, it looks from tbe facts of the case set out by the Judicial Committee as if subsequent to the oral agreement, the then existing building had been demolished and fres substantial superstructure erected in terms of the new agreement. A reading ef the judgment shows that this has not in the least affected the decision in the case. Their Lordships emphasise the fact that the Act is applicable only to tenancies of lands created before the commencement of the Act ant that there could be a fresh tenancy after the Act even if the possession was continuous. From the argument before the Judicial Committee set out in Ranganathan Chetti v. Ethirajulu Naidu, it is seen that the attention of their Lordships was drawn to the decision of Pandrang Row J. in Thayarammal v. Junus Chettiar, in support of the proposition thas the second lease affected the right ef the tenant under the first and that was a contracting out of the Act, which was prohibited. After this decision of the Judicial Committee in unambiguous terms holding that the expression ‘tenant’ in tbe several provisions of the Act, conferring rights and benefits, to the tenant refer only to the tenant as defined under S. 1 (iii) and recognizing the validity of the fresh contract of tenancy after the Act, by a tenant under the Act, the contention is no longer open that a fresh lease after the Act, should be considered as a contract failing under S. 12 to strike down terms therein taking away the benefits conferred on a tenant under the Act. It must be taken as sett led law that to claim the benefits of the Act, the occupant when he makes tbe claim must be a tenant continuing in occupation under a tenancy created before the Act or holding over after the expiration of a tenancy created before the Act.

A real problem that can arises in a case where there is a fresh rental agreement by a tenant under tbe Act is whether the subsequent agreement created a new tenancy between the parties. The answer in the ultimate is one of fact to be arrived at on well established principles. This question has been discussed at length by Ramachandra Iyer, C.J in Rahim v. Kanniah Prasad, in that case after the Act the rent was increased but in other respact the terms of the lease were as before the Act. There was no new document of tenancy and while holding that the mere fact that the rent payable under the old lease bad either been increased or reduced by consent of parties, cannot necessarily imply that the original relationship of landlord and tenant had been put an end to, and a fresh lease established, the learned Judge points out that the question whether the earlier lease had been superseded by the new one is a question of fact to be decided on all the circumstances of the case. The test may be seen in the following obser-, vatioa at page 523.

“It (rent) will therefore be only one of the terms of the contract granting the lease. It is always open to the partirs to alter that term of the contract even while the original relationship of landlord and tenant sabsists.”

Referring to the decision of the Judicial Committee in Ranganatham Chetty v. Ethirajulu Naidu, the learned Judge pointed out that the stipulations in the sew lease therein, implied on agreement between the parties that the old lease under which there existed certain rights had terminated. As the Madras City Tenants' Protection Act, permited increase or redaction or rent and provided for application to the Court for the purpose, the learned Judge said that it must be open to the parties, evea without going to the Court, to obtain an alteration in rent by agreement between the parties and the fact of such an agreement altering the rent could not necessarily mean that a fresh tenancy had come into existence between the parties.

In Ramaswami Chettiar v. Ramaswami Pillai, after the original lease deed, prior to the Act, there was a fresh rental agreement after the Act, but this latter agreement which required registration had not been registered. Discussing the effect of the new agreement, it is observed:

“If Ex. P-1 (the new rental agreement) had been registered and had been executed by the the lessor as well as the lessee, it might have been arguable that after 15th July 1934, the date of Ex. P-1 the respondent was no longer a tenant within the meaning of the Act Ex. P-1 had no legal effect as it was unregistered and was not signed by the lessor. That being so, the possession of the respondent is referable enty to his holding over the termination of Ex. D. 1 aad not to the execution of Ex, P-1.”

In Nayar Varada filial v. Ghulam Dastagir, a deeision of King. J., on actual deed of lease between the parties was executed in May 1924 long after the Act, had come into force. The learned Judge held that the tenant was entitled to the protection of the Act as his tenancy had commenced before the Act, and the subsequent execution of the lease deed dit not amount to creation of a new tenancy.

In Ganesa Mudaliar v. Chellammal, where the tenant who had been in occupation from 1949 executed a fresh lease in 1956 and there were no variations in the terms of the tenancy, the learned Judge, Kailasam J., held that there was no new tenancy and that it could net have been the intention of the legislature to exclude tenants who continued on the land on the same condition after execution of a fresh lease deed. It was pointed out that the burden was on the landlord to prove that there had been a variation of the terms of the tenancy.

In C.C.C.A No. 107 of 1950 (1954 M.W.N Short Notes Page 100) Somasundarm J., held:

“So long as the rent is the same and there was no substantial variation in the terms of the lease, despite the fact that a fresh lease was executed subsequent to 1922, the tenancy must be deemed to be a continuation of tenancy prior to the coming into foree of the Madras City Tenants, Protection Act.”

In Steel v. Cockroft, the question was whether the statutory tenancy of the mother of the defendant in an action for possession by the landlord had been substituted by a contract tual tenancy that would entitled the defendant in the action to the benefit of the Rent Restriction Acts. This defended upon the inference to be drawn en the assumption of the aeceptance by the mother of the terms of a letter which the landlord had written to her. It will be useful to set out somewhat in extenso the observations therein. It was observed at P. 177:

“The question is whether the fact that a tenant aad landlord agree between themselves for their mutual convenience that the method of payment of rates shall be varied of itself as a matter of law necessarily destroys the statutory tenancy which was previously in existence (and which in the present case has been in existence for nearly twenty five years) and creates a new contractual tenancy. The learned Judge held that it did not and I am of the same opnion. When one looks at S. 2 and particularly, at the proviso to S. 2 (3) it is clear that it implicit in the section the legislature is contemplating that which was dene in the present case can be done without amounting to a contravension of the provisions of the Act. The Court is not compelled to draw the inference that when the parties have taken advantage of a provision of this kind, they must as a matter of law be held to be intending to do that which in my view, they manifestly were not intending to do, namely to put an end to the nature of the relationship between them which had existed over this long period and create a new contractual tenancy. The statute indicates that parties may preperly make an arrangement of this kind for a different method of payment of relates a mere matter of machinery providing always that the proper corresponding reduction is made in the rent. That was done in the present case find I agree with the learned Judge in the view he found that there is nothing in the circumstances of the case or in the contents of the letter which compels the Court to draw the inference that the parties intended to create a new contractual tenancy.”

In the present care the earlier tenancy was oral and was a tenancy from month to month. The tenant had entered into a new agreement Ex. A-1 under a legistered Instrument. It was a tenancy for a period of three years, and the tenant was prohibited from sub-letting or assigning his tenancy. There was restriction sven in the user of the land keeping cattle was prohibited. The learned Principal Judge of the City Civil Court finds that the terms of the new tenancy differ materially from the previ ous tenancy.

In Wood fall on Landlord and Tenant, 25th Edition at page 1052 it is pointed out:

“…………neither will new or altered terms necessarily determine an existing tenancy.”

The core of a tenancy is the right to enjoy the land, and the duration of this period ef tenancy is certainly a material term for a lease equally the right as u sub-letting or assignment. Changes in these do change the tenancy. While no new tenancy necessarily follows on a mare increase of rent, certainly the parties may by agreement express or implied create a new tenancy on the expiration of the old or even during the continuation of the old tenancy. The tenancy then gets extinguished on surrender by operation of law. The two tenancies cannot co-exist. As point ed out in Halsbury's law of England, Vol. 23 page 686:

“A surrender by operation of law takes place when the tenant takes a new lease from the landlord to commence during the term of the old lease, even though the new lease is for a shorter term than the residue ef the eld term. This surrender is founded upon estop pel, and takes place without regard to the intention of the parties. The landlord has no power to grant the new lease except upon the footing that the old lease is surrendered, and the tenant, being a party to the grant of the new lease, is estopped from denying the surrender. Consequently the acceptance of the new lease operates as a surrender of the old one and the result is the same although the new lease is a future lease, or although the new lease is by parol and the old lease was by deed.”

From the above citations, it is clear that the question is one for inference from all the facts and circumstances of the case, whether the parties intended under the new agreement to put an end to the old tenancy and create a fresh tenancy. Here the tenant has secured material advantage under the new registered rental agreement. There is security of tenure for three years which was not available to bim under the old tenancy. The Madras City Tenants Protection Act does net prohibit the eviction of a tenant. Only if ejectment of the tenant is sought, he gets a right to call upon the landlord to sell the land to him. One can contemplate a tenant who may not be in a position to buy the land, if that right should be conceded, if an action for eviction should be taken against bim then and there, to prefer to give up the benefits under the Act for a clear tenancy for a paticular period. The document Ex. A-1 says that the tenant wanted the three year period. The validity of the document is not otherwise impugned In effect the tenant here had asked to be released from a tenancy of indefinite duration and wanted tenancy for a period of three years on certain terms. The landlord consented to that and a fresh tenancy was created with all formalities. Having regard to all these features, I see no reason to differ from view of the learned Principal Judge of the City Civil Court there has been a fresh tenancy in the case.

It is argued that the plaintiff has not discharged the burden that there had been a variation in the terms. This argument is without substance as the only term earlier agreed upon was as to the rent and all other terms that governed the earlier tenancy have to be presumed from the provisions ef the Transfer Property Act. The appeal therefore fails and is dismissed. In the circumstances there will be no order as to costs. Time for vacating six months from today.

No leave.

v.c.s