AND DECREE DATED 03.06.2020 PASSED IN SC.NO.15333/2018 ON THE FILE OF THE XVII ADDL. JUDGE, COURT OF SMALL CAUSES AND ADLL. CHIEF METROLITAN MAGISTRATE, MAYO HALL UNIT BENGLALURU (SCCH-21) PARTLY DECREEING THE SUIT FOR EJECTMENT, ARREARS OF RENT AND ALSO MESNE PROFITS. THIS PETITION HAVING BEEN HEARD AND RESERVED ON 02.11.2020 AND COMING ON FOR PRONOUNCEMENT OF ORDERS THIS DAY, THIS COURT MADE THE FOLLOWING: ORDER The petitioner, the tenant in possession of shop bearing No.3, Ground Floor, in the property bearing municipal No. 199, Veerapillai Street, Shivajinagar, Bengaluru - 560001 (for short, the Subject Premises), has filed this revision petition under Section 18 of the Karnataka Small Causes Courts Act, 1964 impugning the judgement and decree dated 03.06.2020 in SC No.15333/2018 on the file of the XVII Additional Judge, Court of Small Causes and Additional Chief Metropolitan, Mayo Hall Unit, Bengaluru (for short, the small causes Court). The Small Causes Court by the impugned judgement and decree has directed the petitioner to quit and deliver vacant possession of the subject premises to the respondent within 90 [Ninety] days from the date of its judgement, and the small Causes Court has also declared that the respondent would be entitled for mesne profits at the rate of Rs.15,000/- per month from the date of the suit till the date of delivery of vacant possession of the subject premises to the respondent.
2. The respondent has filed the suit in SC.No.15333/2018 for the petitioners ejectment from the subject premises asserting that the petitioner is in possession of the subject premises (a commercial premises) as a tenant on a monthly rent of Rs.650/, and the tenancy in favour of the petitioner is an English Calendar month to month tenancy. The provisions of the Karnataka Rent Act, 1999 would not apply to the subject premises. The petitioner was inducted as a tenant by the respondents parents who were owners of the subject premises at the relevant point of time. The petitioner, who was paying rents for the subject premises at a rate lower than the market rent, continued to pay the same lower rent even after the petitioners father breathed his last on 14.11.2013. The petitioner persisted to send the monthly rents by cheques drawn in the name of the respondents deceased father. The petitioner was in due of rental arrears from the month of October 2013, and the subject premises was sublet by the petitioner without the consent of either the respondent or his siblings.
3. The respondent also asserts that his siblings have transferred all their undivided right, title and interest in the subject premises in his favour under the Release Deed dated 28.3.2018. The respondent is thus the owner of the subject premises, and he proposes to demolish the building which includes the subject premises and reconstruct commercial building for his own use and occupation. The respondent has issued Legal Notice dated 04.10.2018 determining the tenancy in favour of the petitioner on the expiry of 31.10.2018 and calling upon the petitioner to pay rental arrears in a sum of Rs.39,650/-. The petitioner has caused an untenable reply vide the reply dated 15.10.2018 and paid only a sum of Rs. 3,000/- towards the rental arrears.
4. The petitioner, upon service of the suit summons, has contested the suit contending that he is a protected tenant as per the provisions of the Karnataka Rent Act, 1999 which would apply to the subject premises. The petitioner has also contended that he is entitled for statutory protection against eviction on the ground of non-payment of rent in the light of the provisions of Section 114 of the Transfer of Property Act, 1882 (for short, the Transfer of Property Act). As regards the tenancy, the petitioner has contended that he and a certain Syed Munnevar Ahmed were jointly inducted as tenants of the Subject Premises and both of them have continued in possession of the Subject property as joint tenants. As such, the allegation of subletting is unjustified.
5. The respondent has examined himself as PW1 reiterating the plaint assertions. The respondent in his cross-examination has stated that there is no written contract of lease with the petitioner, and he admits that the petitioner has not sublet the subject premises to any third party. However, the respondent has asserted even in his cross-examination that the petitioner is in rental arrears in a sum of Rs.37,700/-. The respondent has marked Exhibits P1 to P12: the Legal Notice and the Reply Notice are marked as Exhibits P1 and P5, a certified copy of the Release Deed is marked as Exhibit P6, the Katha Certificates/Tax Paid Receipts are marked as Exhibit P7 - Exhibit P9 and three Cheques issued by the petitioner are marked as Exhibits.P.10 - P.12.
6. The petitioner has initially examined himself as DW-1 but he has later executed power of attorney in favour of Sri.Syed Munnevar Ahmed who is examined as DW2. The petitioner has not tendered himself for cross- examination, and as such, the evidence on behalf of the petitioner is only the evidence of Sri Syed Munnevar Ahmed. The evidence of this witness is again a reiteration of the pleadings in the written statement. He has stated that the petitioner and he were jointly inducted as tenants by the respondents father. They are protected tenants because the provisions of the Karnataka Rent Act, 1999 would apply to the subject premises.
7. As regards the rental arrears, Sri Syed Munnevar Ahmed has stated that the rents are paid diligently every month by way of cheque for the period between July 2008 and September 2013 and for the period from October 2013 to September 2018 by way of cash, and for the period after October 2018 the rents are again paid by way of cheques. This witness has also stated that the termination of the lease is not valid. Interestingly, there is no evidence on the ground that the petitioner would be entitled for relief against forfeiture. On behalf of the respondents two exhibits have been marked as Exhibits D1 and D2: Exhibit D1 is a passbook to show payment of rents by cheque during the years 2008-13 and during the year 2018-19 and Exhibit D2 is the power of attorney executed by the petitioner in favour of Sri.Syed Munnevar Ahmed.
8. The Small Causes Court, in the light of the pleadings and the evidence on record, has formulated different points for its consideration. The points for consideration formulated by the Small Causes Court read as follows:
1. Whether the plaintiff has proved that the determination of lease in respect of the suit schedule shop is governed by Transfer of Property Act?
2. Whether the defendant has proved that along with him, his brother, Sri Syed Munnevar Ahmed, is also a tenant in respect of the suit schedule shop?
3. Whether the defendant has proved that his tenancy is protected by payment of arrears of rent as contended by him?
4. Whether the plaintiff has proved that is entitled for a arrears of rent of Rs.37,700/- as claimed by him?
5. Whether the plaintiff is entitled for mesne profits at the rate of Rs.20,000/- per month from the date of suit till delivery of vacant possession of the suit schedule shop?
6. Whether the plaintiff is entitled for vacant possession of the suit schedule shop? The Small Causes Court has answered the first and the sixth points in the affirmative, the fifth point partly in affirmative and the second to fourth points in the negative. The respondent is granted the decree for ejectment of the petitioner from the subject premises and for damages/mesne profits at the rate of Rs.15,000/- per month from the date of the suit till the date of actual delivery of vacant possession of the subject premises. The respondents claim for arrears of rent is dismissed.
9. The learned counsel for the petitioner has argued in support of the petition contending that the Small Causes Court having concluded that the petitioner is not in arrears of rent should have found in favour of the petitioner on the question of the protection of the petitioners tenancy under Section 114 of the Transfer of Property Act. The learned counsel emphasises that the respondent has caused the Legal Notice dated 04.10.2018 specifically on the ground that the petitioner is a defaulter in the matter of payment of rents, and because the petitioner has failed to pay the enhanced rent, the lease is determined. The learned counsel relies upon paragraphs 6 and 7 of the legal notice dated 04.10.2018 in support of this submission.
10. The learned counsel for the petitioner submits that therefore it is indisputable that the respondent has determined the lease for forfeiture as a consequence of the alleged default in the matter of payment of rents, a circumstance contemplated under Section 111(g) of the Transfer of Property Act, 1882. If the lease is determined by forfeiture on the ground that the tenant has committed breach of the contractual term by non-payment of rent, with the rental arrears being paid, the tenant will be entitled to be relieved of forfeiture in lieu of a decree for ejectment as envisaged under the provisions of Section 114 of the Transfer of Property Act, 1882. The learned Counsel canvasses that the Small Causes Court has committed a serious error in concluding that the determination of the lease is not because of any violation or non-payment of regular rent; the Small Causes Court has completely misdirected itself in appreciating the respondents case resulting in the failure to relieve the petitioner of the consequences of forfeiture as provided under Section
114 of the Transfer of Property Act, 1882.
11. The learned Counsel for the Petitioner relies upon the decision of the Honble Supreme Court in Rakesh Wadhwan and others v. Jagdamba Industrial Corporation and others1 to contend that where the lease of immovable property is determined by forfeiture for non-payment of rent and the lessor files a suit for ejectment of the lessee, the Court, in exercise of the discretion conferred under Section 114 of the Transfer of Property Act, could pass an order relieving the lessee against the consequences of forfeiture if at the hearing of the suit the lessee pays or tenders to the lessor the rent in arrears with interest and costs or furnishes such security as the Court thinks sufficient. The Honble Supreme Court has also held that the discretion conferred by Section 114 of the Transfer of Property Act is of wide amplitude guided by the principles of justice, equity and good conscience and the Courts must (2002) 5 Supreme Court Cases 440 examine the conduct of the parties, the comparative hardship and lean in favour of one whose hands are clean. The discretion to grant relief against forfeiture is available not only to the trial court but also to the appellate court. The learned counsel finally submits that this Court, in the facts and circumstances of the case, and especially in the light of the unchallenged conclusion that the petitioner has paid all the rental arrears, must interfere with the impugned judgement and decree and exercise the discretion to relieve the petitioner of the consequences of forfeiture.
12. On the other hand, the learned counsel for the respondent argues that the canvass on behalf of the petitioner that the respondent has determined the lease in favour of the petitioner because of forfeiture of lease on the ground of non-payment of rent as contemplated under Section 111(g) of the Transfer of Property Act is presumptive. The lease of an immovable property could be determined in any of the circumstances mentioned in Section 111 of the Transfer of Property Act, and as contemplated under section 111(h) of the Transfer of Property Act, lease determines on the expiration of a notice to determine the lease, or to quit, or of intention to quit. There is nothing on record to indicate that the lease is determined by forfeiture as contemplated under section 111(g) of the Transfer of Property Act. The respondent in issuing the Legal Notice dated 04.10.2018, though has referred to the petitioners conduct in being a defaulter and subleasing the property, has determined the lease as contemplated under section 111(h) of the Transfer of Property Act and this Legal Notice dated 04.10.2018 is in accordance with the requirements of section 106 of the Transfer of Property Act. As such, the ground now canvassed on behalf of the petitioner would not be available.
13. The learned Counsel for the respondent further submits that, even otherwise the petitioner cannot seek invocation of the discretion available to court under section 114 of the Transfer of Property Act to relieve the lessee against forfeiture in the facts and circumstances of the case. A lessee suffers forfeiture of lease only when the lease is for a particular fixed period and if the agreement of tenancy, when in writing, provides for forfeiture and the landlord exercises the right to forfeiture either expressly or by necessary implication. In the present case, it is undisputed that the tenancy is a month to month tenancy and there is no written contract of lease between the respondent/his predecessors-in-title and the petitioner. Therefore, the argument based on the provisions of Section 114 of the Transfer of Property Act cannot be sustained.
14. The learned counsel in support of his submission relies upon the following paragraph in the decision of the Bombay High Court in Geetabai Namdeo Dap v. B.D Manjrekar .2 The legal position to be noted is that there is a world of difference between liability of the tenant for eviction on the ground of forfeiture of tenancy and his liability on the ground of termination of the tenancy by a notice of termination simpliciter. The law relating to determination of tenancy is incorporated in section 111 of the Transfer of Property Act. There are various reasons for determining the tenancy and there exist various modes by which the tenancy comes to an end. If the tenancy is to come to an end by virtue of the principal of forfeiture, what is required under the law is that the tenancy should be for a particular period and the lease deed must contain a clause of forfeiture on the ground of breach of certain conditions of the tenancy. If the breach is committed, the tenancy becomes liable for forfeiture even before the expiry of the agreed period of the
2 AIR 1984 Bombay 400 tenancy. When the tenant incurs forfeiture, there is a further thing required to be done by the landlord, namely, that the landlord must exercise his right to forfeiture either expressly or by necessary implication. If he exercises the right to forfeiture, then the tenancy comes to an end even before the agreed period of tenancy. In such a case no question of notice of termination as provided by section 106 of the transfer of property act arises, although, in certain cases some kind of notice indicating exercise of the right to forfeiture by the landlord may be advisable.
15. In the light of the rival submissions, the question that arises for consideration in the present petition is: Whether the petitioner should be relieved of forfeiture in lieu of a decree for ejectment, and whether the Small Causes Court has erred in not granting such relief to the petitioner.
16. The relief under Section 114 of the Transfer of Property Act would be available when a lease of immovable property is determined by forfeiture for non- payment of rent and the lessor sues to eject the lessee. The provisions of Section 111(g) of the Transfer of Property Act provides for determination of lease by forfeiture, and the provisions read as under: (g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event: and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease: Apart from the decision of the Bombay High Court in Geetabai Namdeo Dap v. B.D Manjrekar . supra, the requirements for determination of lease by forfeiture on account of the breach condition to pay rents regularly as contemplated under Section 111(g) of the Transfer of Property Act, and the consequential discretionary relief of relieving such tenant against forfeiture has come up for consideration before the High Court of Allahabad in Yashpal Lala Narain v. Allatala Talsa Malik Waqf Ajajhan Mus3.
17. After a detailed discussion on the provisions of Section 111(g) of the Transfer of Property Act, the High Court of Allahabad has delineated three categories of cases contemplated thereunder: Category 1 - where the determination of lease is because a tenant breaks an express condition which provides that, on the breach thereof, the landlord may re- enter:
3 AIR 2006 All 115 Category 2 - where the determination of lease is because a lessee has announced his character as such by setting up a title in 1/3 person or by claiming title in himself ; Category 3 - where the determination of lease is because a tenant has been adjudicated an insolvent under lease provides that the landlord may re- enter on the happening of such event. It has been further held that a combined reading of Category (1) of Clause (g) of Section 111, Section 114 and Section 114A of the Transfer of Property Act shows that the provisions of Section 114 as well as Section 114A pertain to the determination of lease by forfeiture under Section 111, Clause (g), Category (1) of the said Act, and while Section 114 of the said Act deals with the relief against forfeiture in case where the lease is determined by forfeiture for non-payment of rent, Section 114A provides for relief against forfeiture in certain other cases of determination of lease by forfeiture under Category (1) of Clause (g) of Section 111 of the said Act. It is emphasised that for the applicability of Section 114 as well as Section 114A the requirements of Section 111(g), Category (1) of the said Act must be satisfied, and it is concluded that: Therefore, it follows that for the, applicability of Section 114 of the Transfer of Property Act, it is necessary that the following conditions, as per the provisions of Section 111(g), Category (1) of the said Act must be fulfilled: (1) There must be a condition in the lease regarding payment of rent. (2) The condition must be an express condition. (3) The express condition must provide that in case of breach of the said condition (regarding payment of rent), the lessor may re-enter. (4) The lessee breaks such express condition. (5) The lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease.
18. This Court, persuaded to agree with the aforesaid enunciation, can only reiterate the requirements as aforesaid and conclude that the petitioner can seek relief against forfeiture under Section 114 of the Transfer of Property Act if the aforesaid conditions are satisfied. In the present case, there is no dispute that the respondent is put in possession of the subject premises as a tenant under an oral agreement, and if there is no dispute in this regard, it will have to be inevitably concluded that the petitioner is not entitled to claim relief against forfeiture. Even otherwise, in the facts and circumstances of the case, as borne out by the evidence, more specifically the terms of the legal notice dated 04.10.2018, it will have to be concluded that the respondent has not initiated proceedings for ejection asserting the right to forfeit the lease and determination of the lease invoking the right to forfeit.
19. The learned counsel for the petitioner relies upon paragraphs 6 and 7 of the legal notice dated 04.10.2018 in support of his submission that the respondent has filed the suit for ejectment asserting determination of the lease under Section 111(g) of the Transfer of Property Act. These paragraphs read as under:
6. You are therefore given notice to remit the arrears of rents within
7 (seven) days of the receipt of this notice.
7. You are not reliable tenant having defaulted in the matter of payment of rents and having refused to pay enhanced rent, further you have sub-let the shop under your occupation without the permission of our client. These terms do not indicate that the respondent has asserted the right to forfeit the lease and has determined the lease by forfeiture on the ground that the petitioner has not paid rents. The reference to the petitioner as an unreliable tenant because of the defaults committed in the matter of payments, cannot be construed as an assertion of the right to forfeit and the determination of the lease invoking such right of forfeiture. The respondent, being entitled to determine the lease under Section 111(h) of the Transfer of Property Act, has issued notice as required under Section 106 of the Transfer of Property Act. The first of the questions that arises for consideration is accordingly answered in favour of the respondent, and in the light of the aforesaid discussion, it is also opined that the impugned Judgement dated 3.6.2020 in S.C.No.15333/2018 by the Small Causes Court does not suffer from any infirmity in law. The Civil Revision Petition is accordingly dismissed. The Revision Petitioner is granted time till February 2021 to vacate and handover vacant possession of the subject premises to the respondent. SD/- JUDGE ct:sr
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