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Case Number

Appeal from Appellate Decree No. 1777 of 1917

Attorney(S)

Babus D.N Chakerbutty and Gagan Chand Boral and M.A.K Fazlul Huq for the Appellant.
Babus Gunada Charan Sen and Joytish Chandra Sarkar for the Respondents.

Judges

N.R Chatterjea
Newbould, JJ.

Acts

Sec. 116 of the Transfer of Property Act
TRANSFER OF PROPERTY ACT

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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

This appeal arises from a suit for ejectment of Defendant No. 1 after service of a notice to quit on the allegation that he was a tenant-at-will. Defendant No. 1 had transferred the greater portion of the land to Defendant No. 2. The Defendants contended that Defendant No. 1 had a permanent tenure inherited from his ancestors with an unchanged rent, that the notice to quit was insufficient, and therefore they were not liable to be ejected. The Courts below (including the learned District Judge) decreed the suit in favour of the Plaintiffs, and Defendant No. 1 has appealed to this Court.

Legal Issues Presented

Whether the defendant's tenure was a permanent tenancy (inherited, with a uniform rent) or merely a tenancy-at-will.
Whether the kabuliyat (a one-year settlement document dated 1273/9th Assin 1273) is genuine and, if genuine, what legal consequences flow from its terms.
Whether, under the terms of the kabuliyat, the Plaintiffs were required to serve an assessment notice and obtain refusal of payment before seeking ejectment.
Whether the notice to quit served (dated 8th Sravan requiring the tenant to leave by the end of the month — about 22 days) was a reasonable and sufficient notice to terminate the tenancy.

Arguments of the Parties

Appellant's (Defendant's) Arguments

The Defendant No. 1 asserted a permanent tenure in the land, held from the time of his ancestors, at an unchanged rent; thus he was not a tenant-at-will.
The Defendant challenged the genuineness of the kabuliyat and contended that the case had not been properly tried.
It was contended that even if the kabuliyat were genuine, the Plaintiffs could not succeed without showing that they served the Defendant with an assessment notice of rent and that the Defendant refused to pay.
The Defendant contended the notice to quit (about three weeks/22 days) was insufficient.

Plaintiffs' Arguments

The Plaintiffs alleged that the Defendant's grandfather took a one-year settlement of the land by executing a kabuliyat in 1273 and that the current holding was a holding over (claimed as a monthly tenant by Plaintiffs).
The Plaintiffs relied on the kabuliyat as evidence of the original lease and the consequent rights to eject after notice to quit.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Haridas v. Upendra	Held that for a tenancy not governed by the Transfer of Property Act, six months' notice is sufficient to terminate it (as cited by the District Judge).	The District Judge referred to this authority when considering what constituted sufficient notice for tenancies not governed by the Transfer of Property Act. The Court noted the reference but did not rely upon it as dispositive in the present case.
Trailakhya Nath Roy v. Sarat Chandra Banerjee	Where a property was leased for a term of years (not for agricultural/manufacturing purposes) and the lessee held over after expiry, in absence of agreement the lessee is a tenant from month to month and entitled to 15 days' notice to quit expiring at the end of the month (under the Transfer of Property Act provisions).	The District Judge applied this case to hold that 15 days' notice (or, in his view, three weeks) was reasonable. The Court in the present opinion analyzed Trailakhya and concluded that its reasoning depended on the Transfer of Property Act (secs. 106 and 116) and therefore does not apply to a lease predating that Act; thus Trailakhya's rule was not applicable to the present facts.
Sheikh Akloo … Defendant v. Sheikh Emanon … Plaintiff	Cited for the proposition that a lease reserving a yearly rent leads to a presumption of a yearly tenancy.	The Court relied on this authority to treat the lease (which reserved a yearly rent even if payable by monthly instalments) as creating a yearly tenancy for the purpose of determining the character of the holding and the appropriate analysis of notice.
Debendra Nath Bhoumick v. Shyama Prosonna Bhoumik	Used to support the statement that, under the Transfer of Property Act, a contract of yearly tenancy cannot be implied merely from mention of an annual rent because a tenancy from year to year or reserving a yearly rent requires registration under sec. 107.	The Court cited this authority to explain why the reasoning applicable under the Transfer of Property Act (preventing implication of a yearly tenancy without registration) does not constrain the present case, which arose before the TPA and before later registration requirements.

Court's Reasoning and Analysis

The Court proceeded through a sequence of factual findings and legal analyses:

Factual findings at trial: The land had been held by Defendant No. 1 from the time of his ancestors, but the lower courts found the rent receipts produced by the Defendants to be untrustworthy (suspicious appearance, custody not properly proved, no proof of uniform rent payment over time). The District Judge also found an absence of substantial structures on the land, supporting the conclusion that the Defendant was merely a tenant-at-will. The appellate court did not disturb these findings.
On the kabuliyat: The Plaintiffs alleged a one-year settlement (kabuliyat dated 1273) taken by the Defendant's grandfather. Although the Defendants challenged its genuineness, both the learned Munsif and the District Judge accepted the document as genuine after considering custody evidence and age. The Court found no ground to interfere with that factual finding.
On the legal effect of the kabuliyat: The kabuliyat's clause obliged the tenant to pay rent as assessed at the expiry of the one-year pattah and allowed the landlord to "settle with somebody else" if the tenant did not pay. The Appellant argued that Plaintiffs must show they served an assessment notice and that the Defendant refused to pay. The Court interpreted the clause as referring to assessment at the expiry of the one-year term (year 1274). The landlord's contractual right to dispose of the land on refusal of payment at that time existed independently of service of a later notice to quit; but that contractual power did not oust the landlord's ordinary right to eject the tenant after service of a notice to quit according to law. Because this point had not been raised below, the Court overruled the contention.
On sufficiency of the notice to quit: The notice was dated 8th Sravan and required vacation by the end of the month (about 22 days). The District Judge had relied on two authorities: Haridas v. Upendra (six months' notice for tenancies not governed by the TPA) and Trailakhya Nath Roy (where a holding-over lessee became month-to-month with a 15-day notice requirement under the TPA). The Court analyzed Trailakhya in detail and concluded:
- The Trailakhya decision applied sec. 116 (and sec. 106) of the Transfer of Property Act — it addressed leases that came into existence after the TPA and therefore fell within that Act.
- In the present case the relevant lease dated 9th Assin 1273 (September 1866) predated the Transfer of Property Act and sec. 2 of that Act preserves rights arising before it came into force.
- The lease reserved a yearly rent. Although payable by monthly instalments, that payment structure does not convert a yearly rent into a monthly rent; thus a presumption of a yearly tenancy arises.
- Because the present lease predates both the Transfer of Property Act and the later Registration Act (1871), the legal rule preventing implication of yearly tenancies without registration under the TPA does not apply — under the law in force when the lease was granted (Act VI of 1866), a yearly tenancy implied from a yearly rent was a valid agreement.
The Court therefore concluded that the reasoning and fixed notice periods derived from the Transfer of Property Act do not control the present case.
Conclusion on notice question: For tenancies predating the Transfer of Property Act and governed by earlier law, there is no fixed statutory period of notice; the adequacy of notice must be determined by rules of justice, equity and good conscience having regard to all the circumstances. The learned Judge below had held a 22-day notice to be reasonable, but his reasoning relied on Trailakhya (which the Court found inapplicable). Consequently, the Court determined that the lower Appellate Court should reassess the question whether the notice was reasonable in the context of the correct legal framework and factual circumstances.

Holding and Implications

Holding: Case remanded.

Implications and direct effects:

The case is sent back to the lower Appellate Court for a fresh determination on whether the notice to quit (approximately 22 days) was reasonable, applying the correct legal principles relevant to a lease predating the Transfer of Property Act and the Registration Act.
The factual findings that supported the lower courts' conclusion that the Defendant was a tenant-at-will (unreliable rent receipts, lack of substantial structures, and other findings) were left undisturbed by this Court.
Costs were ordered to abide the result (i.e., costs reserved pending the outcome on remand).
No new broad precedent was enunciated beyond the Court's determination that the statutory rules under the Transfer of Property Act (secs. 106 and 116) and related registration constraints do not apply to a lease executed before those statutes came into force; the Court therefore remitted the matter for application of equitable standards to the question of reasonable notice.

N.G

Case remanded.

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Charu Chandra Nai v. Satya Sebak Ghoshal

The Judgment of the Court was as follows:—

This appeal arises out of a suit for ejectment of the Defendant after service of a notice to quit, on the allegation that he was a tenant-at-will. The Defendant No. 1, the tenant, had transferred the greater portion of the land to the Defendant No. 2. The defence was that the Defendant No. 1 had a permanent tenure in the land, having held the same from the time of his ancestors at a rent which had not been varied, that the notice to quit was not sufficient, and that the Defendants were not liable to be ejected.

The Courts below concurred in decreeing the suit. The Defendant has appealed to this Court.

There is no doubt that the land has been held by the Defendant No. 1 from the time of his ancestors, but the Courts below have found that the rent receipts produced by the Defendants are not trustworthy. The learned District Judge says “their appearance is suspicious, their custody has not been properly proved and in any event they do not show that rent has been paid at a unifrom rate for any considerable time.” He further found that there were no substantial structures on the land, and came to the conclusion that the Defendant was merely a tenant-at-will. Having regard to the facts found we are unable to hold that the Court below was wrong in finding that the tenure was not a permanent one.

The Plaintiffs alleged that the Defendant's grandfather took a settlement of this land for a term of one year fey executing a kabuliyat in 1273, and that on the expiry of the term was holding over as a monthly tenant. The genuineness of the kabuliyat was challenged by the Defendants but the Courts below have accepted the document as genuine. It is contended on behalf of the Appellant that the case has not been properly tried. The learned Munsif was of opinion that as the Defendants failed to show the tenancy to be premanent, the proof of the kabuliyat was not essential for the Plaintiff. He however observed “It is over 30 years old, so proof of custody is all that is necessary with regard to it. The evidence given as to custody is not entirely satisfactory but it may, on the whole I think, be regarded as adequate.” The learned District Judge considered the matter and accepted the document as genuine, and we do not think the finding of the Court below on the point can be interfered with.

It is contended however that even upon the kabuliyat the Plaintiffs cannot succeed.

The kabuliyat provides “on the expiry of the term of my pattah I shall be liable to pay the rent of which assessment notice will be served by you, and I shall pay the same. If I do not pay the said rent, you may settle with somebody else.” It is contended that the Plaintiff cannot maintain the suit unless it is shown that the Plaintiffs served the Defendant with notice of assessment of rent, and the Defendant refused to pay the same. But the clause appears to refer to the assessment of rent at the time when the lease would expire, i.e, in the year 1274. Under that clause the landlord was entitled to settle the land with others if the tenant refused to pay the rent which he might be called upon to pay on the expiration of the term of one year; and this the landlord was entitled to do under the contract and without the service of a notice to quit. But it did not take away the right of the landlord to eject the tenant after service of notice to quit according to law, even if the landlord did not choose to exercise the right to call upon the tenant to pay additional rent and settle the land with others in the event of the tenant refusing to pay such rent. It is to be observed that this question was not raised in the Court below. This contention also must therefore be overruled.

The last contention relates to the sufficiency of the notice to quit. The notice was dated the 8th of Sravan and the tenant was required to leave by the end of the month. The learned District Judge refers to the case of Haridas v. Upendra (1) in which it was held that in the case of a tenancy not governed by the Transfer of Property Act, six months' notice is sufficient to terminate it. He then says: “As regards the question whether the time allowed for removal was reasonable, it was held in the case of Trailakhya Nath Roy v. Sarat Chandra Banerjee (2) that where a property was leased for a term of years, and not for agricultural or manufacturing purposes and was held over by the lessee after the expiration of the term, that in the absence of an agreement to the contrary the lessee must be deemed to be a tenant from month to month and entitled to only 15 days' notice to quit expiring at the end of the month of the tenancy. The land in the present case was admittedly leased for dwelling purposes only, and as has been said above the Defendant is a tenant-at-will so that the three weeks' time allowed in the notice must I think be reasonable.”

Now, in the case of Trailakhya Nath Roy v. Sarat Chandra Banerjee cited above, the tenancy came into existence after the Transfer of Property Act and the case admittedly fell within the Transfer of Property Act. The lease was for a term of three years and the tenant was holding over after the expiry of the term. Sec. 116 of that Act lays down that if a lessee remains in possession after the determination of the lease and the lessor accepts rent from the lessee, 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 sec. 106. Under sec. 106, in the absence of an agreement to the contrary, a lease for a purpose other than agricultural or manufacturing purposes must be deemed to be a lease from month to month terminable by a 15 days' notice. In the present case the lease was dated the 9th Assin 1273 (September 1866) and is therefore not governed by the Transfer of Property Act, sec. 2 of which provides that nothing in the Act shall affect any right or liability arising out of a legal relation constituted before the Act came into force or any relief in respect of such right or liability. The lease reserved a yearly rent. It is true the rent was payable according to monthly instalments, but even in the case of permanent tenures such as patni or mokarari tenures where a yearly rent is reserved, the rent is payable in many cases according to monthly instalments, and that fact does not show that the rent is a monthly rent. The rent reserved in the lease being a yearly rent, the tenancy can be presumed to be a yearly tenancy, see Sheikh Akloo…Defendant, v. Sheikh Emanon…Plaintiff, . (3), and there is nothing to rebut the presumption. The tenant was therefore holding over as a yearly tenant on the expiry of the term. Sec. 116 of the Transfer of Property Act as stated above lays down that where a lessee holds over, 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 sec. 106, and that is the ground upon which the decision in Trailakhya Nath Roy's case proceeded. But apart from the fact that the tenancy in the present case is not governed by the Transfer of Property Act, it is to be observed that the provisions of both the secs. 106 and 116 of that Act are subject to an agreement to the contrary. In the present case the tenancy being a yearly tenancy there was an implied agreement to the contrary. In cases governed by the Transfer of Property Act it has no doubt been held that a contract of yearly tenancy cannot be implied from the mention of an annual rent (so as to constitute an agreement to the contrary within the meaning of sec. 106 or 116), because the contract must be a valid contract, and a tenancy from year to year or reserving a yearly rent can be made only by a registered instrument as laid down by sec. 107 of the Act. [See Debendra Nath Bhoumick v. Shyama Prosonna Bhoumik (4) and Sheikh Akloo…Defendant, v. Sheikh Emanon…Plaintiff, . ].

In the present case the lease came into existence not only long before the Transfer of Property Act, but also before the-Registration Act (VIII of 1871) which for the first time laid down that a lease of immoveable property from year to year or reserving a yearly rent required registration. At the time when the lease in the present case was granted, Act VI of 1866 was in force, and under that Act only leases for any term exceeding one year required registration, and there was no provision in that Act that a lease from year to year or reserving a yearly rent was to be registered. That being so, the agreement of a yearly tenancy which is implied from a yearly rent having been reserved by the lease was a valid agreement. The reasons therefore upon which Trailakhya Nath Roy's case was decided do not apply to the present case. In cases not governed by the Transfer of Property Act there is no fixed period of notice, and the question has to be decided according to the rules of justice, equity and good conscience having regard to all the circumstances. In the present case the learned Judge has held that a 22 days' notice is reasonable, but he has done so with reference to the decision in Trailayhya Nath Roy's case , which, as we have shown, has no application to the present case.

The tenancy has been in existence from 1866, and the question what is a reasonable notice in such a case should not be considered with reference to cases decided under the Transfer of Property Act.

The case should therefore go back to the lower Appellate Court in order that Court may come to a finding on the question whether the notice was a reasonable one and decide the case accordingly. Costs will abide the result.

N.G

Case remanded.

Charu Chandra Nai v. Satya Sebak Ghoshal

Concise Analytical Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's (Defendant's) Arguments

Plaintiffs' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Charu Chandra Nai v. Satya Sebak Ghoshal

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