Case Law Digest on Tenancy and Rent Law

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SUB-LETTING OF TENANCY In the case of Associated Hotels of India Ltd., Delhi v. S.B. Sardar Ranjit Singh AIR 1968 SC 933, this Court held that when eviction is sought on the ground of subletting, the onus to prove subletting is on the landlord. It

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was further held that if the landlord prima facie shows that the third party is in exclusive possession of the premises let out for valuable consideration, it would then be for the tenant to rebut the evidence. In Helper Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri & Others (1987) 3 SCC 538, this Court held that in a case where a tenant becomes a partner of a partnership firm and allows the firm to carry on business in the demised premises while he himself retains legal possession thereof, the act of the landlord does not amount to subletting. It was held that whether there is genuine partnership or not must be judged in the facts of each case in the light of the principles applicable to partnership. Shalimar Tar Products Ltd. v. H.C. Sharma[(1988) 1 SCC 70] where it was held that to constitute a sub-letting, there must be a parting of legal possession, i.e., possession with the right to include and also right to exclude others and whether in a particular case there was sub-letting was substantially a question of fact. A three-Judge Bench of this Court in Parvinder Singh v. Renu Gautam and Others (2004) 4 SCC 794 "The rent control legislations which extend many a protection to the tenant, also provide for grounds of eviction. One such ground, most common in all the legislations, is sub-letting or parting with possession of the tenancy premises by the tenant. Rent control laws usually protect the tenant so long as he may himself use the premises but not his transferee inducted into possession of the premises, in breach of the contract or the law, which act is often done with the object of illegitimate profiteering or rack-renting. To defeat the provisions of law, a device is at times adopted by unscrupulous tenants and sub-tenants of bringing into existence a deed of partnership which gives the relationship

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of tenant and sub-tenant an outward appearance of partnership while in effect what has come into existence is a sub-tenancy or parting with possession camouflaged under the cloak of partnership. Merely because a tenant has entered into a partnership he cannot necessarily be held to have sub-let the premises or parted with possession thereof in favour of his partners. If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, maybe along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of sub-tenancy or for providing a cloak or cover to conceal a transaction not permitted by law, the court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub-tenant. A person having secured a lease of premises for the purpose of his business may be in need of capital or finance or someone to assist him in his business and to achieve such like purpose he may enter into partnership with strangers. Quite often partnership is entered into between the members of any family as a part of tax planning. There is no stranger brought on the premises. So long as the premises remain in occupation of the tenant or in his control, a mere entering into partnership may not provide a ground for eviction by running into conflict with prohibition against 1 sub-letting or parting with possession. This is a general statement of law which ought to be read in the light of the lease agreement and the law governing the tenancy. There are cases wherein the tenant sub-lets the premises or parts with possession in defiance of the terms of lease or the rent control legislation and in order to save himself from the peril of eviction brings into existence, a deed of partnership between him and his sub-lessee to act as

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a cloak on the reality of the transaction. The existence of deed of partnership between the tenant and the alleged sub-tenant would not preclude

the

landlord from bringing

on

record material

and

circumstances, by adducing evidence or by means of cross-examination, making out a case of sub- letting or parting with possession or interest in tenancy premises by the tenant in favour of a third person. The rule as to exclusion of oral by documentary evidence governs the parties to the deed in writing. A stranger to the document is not bound by the terms of the document and is, therefore, not excluded from demonstrating the untrue or collusive nature of the document or the fraudulent or illegal purpose for which it was brought into being. An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction........." In Parvinder Singh v. Renu Gautam 1 [(2004) 4 SCC 794] a threeJudge Bench of this Court devised the test in these terms: (SCC p. 799, para 8) "If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, maybe along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of subtenancy or for providing a cloak or cover to conceal a transaction not permitted by law, the court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub- tenant"." Ms. Celina Coelho Pereira & Ors. Vs Ulhas Mahabaleshwar Kholkar & Ors. JUSTICE Tarun Chatterjee & JUSTICE R. M. Lodha DD 30-10-

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2009, The legal position was quoted by the court after discussing several decisions and summarised as follows: (i) In order to prove mischief of subletting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent. (ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to subletting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant. (iii) The existence of deed of partnership between tenant and alleged subtenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession in tenancy premises by the tenant in favour of a third person. (iv) If tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession. (v) Initial burden of proving subletting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises

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and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises. (vi) In other words, initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted.

TENANCY UNDER RENT ACT AND T.P. ACT In V. Dhanapal Chettiar vs. Yesodai Ammal [1979 (4) SCC 214 ] the question arose as to whether the landlord is required to give notice under Section 106 of the Transfer of Property Act before filing a petition for eviction under Tamil Nadu Building (Lease and Rent Control) Act. In that context it was held thus : Purely as a matter of contract a lease comes into existence under the Transfer of property Act. But in all social legislations meant for the protection of the needy, there is appreciable inroad on the freedom of contract and a person becomes a tenant of a landlord even against his wishes on the allotment of a particular premises to him by the authority concerned. Now, under the Transfer of Property Act no ground for eviction of a tenant has to be made out once a contractual tenancy is put to an end by service of a valid notice under Section 106. Once such a notice is served it is open to the lessor to enforce his right of recovery of possession of property. But when under the various State Rent Acts it has been provided that a tenant can be evicted on the grounds mentioned in certain sections of the said Acts no question of determination of a tenancy by notice arises. Once the liability to be evicted is incurred by the tenant

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he cannot turn round and say that the contractual lease has not been determined. The action of the landlord in instituting a suit for eviction on the ground mentioned in any State Rent Act will be tantamount to an expression of his intention that he does not want the tenant to continue as his lessee and the jural relationship of lessor and lessee will come to an end on the passing of an order or decree for eviction. Until then under the extended definition of the word tenant under the various State Rent Acts the tenants continues to be tenant even though the contractual tenancy has been determined by giving of a valid notice under Section 106 of the Transfer of Property Act, 1882. In Pradesh Kumar Bajpai vs. Binod Behari Sarkar [1980 (3) SRR 348] it was held that where a Rent Act is applicable to a premises and landlord applies for eviction on the ground of default in payment of arrears of rent the tenant cannot claim benefit under Section 114 of the Act and ask for opportunity to deposit arrears. It was further held that the tenant is not entitled to seek double protection of the State Rent Act and the Transfer of Property Act. In K.K. Krishnan vs. M.K. Vijaya Ragavan [1980(4) SCC 88] this Court held that the right conferred on landlord and tenant by virtue of Section 108 and other provisions of the Transfer of Property Act has no application where the premises is governed by the State Rent Act and if the tenant has sought to proceed with under the Rent Act for his eviction the tenant cannot resist the said eviction on the basis of rights conferred by the Transfer of Property Act. In Prithvichand Ramchand Sablok vs. S.Y. Shinde [1993 (3) SCC 271] it was held that the provisions contained under the Rent Control Act being a special provision would exclude the operation of Section 114 of the Transfer of Property Act. In substance it was held that a building cannot

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be governed by the provisions of two Acts, one by the State Rent Act and other by the Transfer of Property Act. Apex Court in Ambalal Sarabhai Enterprises Ltd. v. Amrit Lal & Co. ((2001) 8 SCC 397) the Rent Act gives protection to the tenant from being ejected except on the grounds referred to thereunder. In other words, it protects the tenant from ejectment, it protects a tenant from the drastic enhancement of the rent by the landlord which otherwise the landlord could do under the general law. Thus the right of a tenant under the Rent Act at the best could be said to be a protective right, which cannot be construed to be a vested right. In effect in view of this special enactment of the Rent Act, the right and remedies available to a landlord under the general law remain suspended or eclipsed. In other words, the landlord's vested right under the general law continues so long it is not abridged by such protective legislation, but the moment when this protection is withdrawn the landlord's normal vested right reappears which could be enforced by him. The Apex Court in Pujalal v. Bhagwat Prasad (AIR 1963 SC 120) held that once contractual tenancy created by the T.P. Act comes to an end the statutory tenancy created by the Rent Act comes into operation. The end of the former is the beginning of the later. Provisions of the Rent Control Act, are in addition to the provisions of the T.P. Act. But the non-obstante provision used in Section 11 of the Kerala Act gives an overriding effect when a tenant is sought to be evicted, but rest of the provision of T.P. Act would still govern the rights and liabilities of the parties. Section 109 of the Transfer of Property Act provides a transfer of the part of the property and the transferee possess all the rights of the transferor, so also subject to all the liabilities of the transferor.

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Apex Court in Mohar Singh v. Devi Charan (AIR 1988 SC 1365) wherein the Apex Court examined the scope of Sections 109 and 106 of the Transfer of Property Act read with Section 21 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act. In paragraph 5 of the judgment the Apex Court held as follows: "It is trite proposition that a landlord cannot split the unity and integrity of the tenancy and recover possession of a part of the demised premises from the tenant. But Section 109, T.P. Act, provides a statutory exception to this rule and enables an assignee of a part of the reversion to exercise all the rights of the landlord in respect of the portion respecting which the reversion is so assigned subject, of course, to the other covenant running within the land. This is the true effect of the words "shall possess all the rights ....... of the lessor as to the property or part transferred........" occurring in Section 109, T.P. Act. There is no need for a consensual attornment. The attornment is brought about by operation of law. The limitation on the right of the landlord against splitting up of the integrity of the tenancy, inhering in the inhibitions of his own contract, does not visit the assignee of the part of the reversion. There is no need for the consent of the tenant for the severance of the reversion and the assignment of the part so severed. This proposition is too well settled to require any further elucidation or reiteration."

CO-OWNER OF A PROPERTY Sri Ram Pasricha v. Jagannath (1976) 4 SCC 184 and Pal Singh v. Sunder Singh... “A co-owner is as much an owner of the entire property as a sole owner of the property. It is not correct to say that a co-owner's property was not its own. He owns several parts of the composite property alongwith others and it cannot be said that he is only a part owner or a

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fractional owner in the property. That position will undergo a change only when partition takes place and division was effected by metes and bounds. Therefore, a co-owner of the property is an owner of the property acquired but entitled to receive compensation pro rata.” In Kanta Goel v. B.P. Pathak (1977) 2 SCC 814, Court upheld an application by one of the co-owners for eviction of a tenant for personal occupation of the co-owners as being maintainable. Supreme Court in the case of N.M. Engineer and others V. Narendra Singh Virdi and another, reported in AIR 1995 SC 448, wherein it has been held as under : "Where in a deed by which the right, title and interest in the property in dispute was released in favour of one of the co-owners nowhere any assignment of rent was made, the assignee was not entitled to rent before assignment and the amount due prior to the deed could not constitute arrears of rent as it was merely an actionable claim. Consequently, notice demanding rent sent before the relinquishment deed by the co-owner was not valid. It was more so when, there was dispute as to amount of standard rent and the interim rent fixed by the small cause court was deposited by the tenant. Moreover, there was no arrears outstanding for the period of six moths on the date of notice and thus the notice did not satisfy requirement of S. 12(3)(b) as it could not be said that the tenant had neglected to pay the rent. In such case, it was not open to the landlord to fall upon S. 12(3)(b)." Supreme Court in C. Chandramohan v. Sengottaiyan A.I.R. 2000 S.C. 568 that mere assertion of tenant that landlord is co-owner because of lack of knowledge of deed does not amount to denial of his title. If a tenant asserts that plaintiff is co-landlord then it means that he is admitting him to be landlord because a co-landlord is also landlord. I therefore hold that the allegation of the defendant in his written statement filed in the previous suit (SCC suit No. 77 of 1980) does not amount to denial of title.

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LIABILITY OF TENANT TO PAY RENT EVEN AFTER TERMINATION SUBSISTS In Smt. Chander Kali Bail and others vs. Jagdish Singh Thakur and another, AIR 1977 SC 2262, the Supreme Court in paragraph 8, after referring to Damadilal and others vs. Parashram and others, AIR 1976 SC 2229, has held that if a suit is filed on the ground of non-payment of rent after termination of the contractual tenancy, the tenant still continues to be a tenant liable to pay rent not only for the past period but in future also and further that in absence of a decree of eviction the person in occupation of the accommodation continues to be a tenant and is not liable to pay any damages as his occupation is not unauthorised or wrongful even after the termination of the contractual tenancy. In Siddalingamma and another vs. Mamtha Shenoy, (2001) 8 SCC 561 and Sampath Kumar vs. Ayyakannu and another, AIR 2002 SC 3369, it has been held that an amendment made in the plaint relates back to the date of filing of the suit and that once the amendment is allowed, it would be treated as if the pleadings are available from the date of filing of the suit.

CASES ON LEASES OF IMMOVABLE PROPERTY http://sbn-caselaw.blogspot.com/2007/05/cases-on-leases-ofimmovable-property.html

DIFFERENCE BETWEEN LEASE AND LICENCE

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Whether particular agreement creates lease or licence has to be gathered from circumstances of agreement — Party claiming benefit of lease has to prove existence of lease — Annual auctioning of right to run hotel in premises at bus stand belonging to Village Panchayat — Agreement between Panchayat and successful bidder in auction — Agreement creates no lease but only licence. Held: There is a very clear and distinct distinction in law between the concept of tenancy and that of a licence. It is true that in certain cases an arrangement between parties regardless of what it is called or defined has been construed by a Court to be one that confers tenancy rights particularly in cases where the person has been in occupation for a long period of time. Various circumstances attendant in each of such cases must unmistakably indicate that the contract was one of tenancy arid that in order to deprive the occupant of the benefits and protection of the statute, the document was given a different colour. The first essential requirement is that these circumstances must be present but more importantly, it is for the party claiming those benefits to aver very specifically that the agreement was one of tenancy and thereafter to establish this to the satisfaction of the Court. The arrangement emanated from the usual auction of conducting rights for a period of one year and therefore even to set up a plea of tenancy would be extremely far-fetched. The agreement only conferred a licence for a period of twelve months and nothing else and further more, what needs to be taken cognizance of is the fact that the agreement and its execution itself are unchallenged. In these circumstances, the petitioner herself would be virtually estopped from even pleading any status other than that of a licensee. Under these circumstances, the respondents who are the authority in-charge of the premises would be justified in removing anybody including the petitioner, if such persons come in the way of the party to whom the contract has been awarded from functioning there. — Smt. Prathima S. Bhat v

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Uppinangadi Grama Panchayath, Uppinangadi, Puttur Taluk, D.K. and Another, 1995(6) Kar. LJ. 136. The Forest Department held an auction in respect of various items of forest produce and the auction notice required purchasers to comply with sales tax and stamp law. The auction agreements were for a period of nine to ten months and the purchasers were merely granted the right to cut and carry away the forest produce. Held, the purchasers did not acquire any interest in the soil but merely a right to cut the forest produce and therefore the agreements were in the nature of licences and not leases so as to attract Article 31 (e) of the (Indian) Stamp Act. A study of the definition of 'immovable property' in Section 3{26) of the General Clauses Act, Section 3 of the Transfer of Property Act, Section 2(6) of the Stamp Act and Section 2(7} of the Sale of Goods Act shows that it is the creation of an interest in immovable property or a right to possess it that distinguishes a lease from a licence. No rights over the earnest deposits made by bidders pending auction were created in favour of the State Government and hence the security deposits were not in the nature of mortgages and the purchasers could not be called upon to pay stamp duty under Section 35(c) of the Stamp Act. — Board of Revenue v A.M. Ansari, AIR 1976 SC1813 Section 105 — Easements Act, 1882, Section 52 — Karnataka Rent Control Act, 1961, Sections 21 and 31 — Lease or licence — Suit for eviction of tenant after termination of tenancy in building exempted from operation of Rent Control Act — Compromise decree under which tenant handed over portion of suit building to landlord and promised to vacate remaining portion before specified date and also agreed to pay "rent" till date of vacating — Agreement under compromise decree, held, did not

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create fresh lease even though word "rent" is used — Tenant has become licensee — Compromise decree can be executed when licensee has breached his promise to vacate suit building — Fresh order of eviction under Section 21 of Rent Control Act — Not necessary even though exemption from operation of Rent Control Act in respect of suit building has since been removed. Held.—The decree was passed on 21-4-1984 much prior to 1-7-1986. (the date on which Section 31 was struck down). If under the terms of the decree the party has agreed to abide by certain conditions and if by those conditions the petitioner has handed over a portion of the suit premises and retains some other portion of the premises, agreeing to pay damages till vacant possession is delivered, it would be difficult to go behind the decree and hold that the petitioner is still a tenant. If the petitioner is not a tenant pursuant to the compromise decree and pursuant to him handing over the possession of a portion of the suit premises, then, it would not be possible to hold that the petitioner retains the remaining portion of the property only as a tenant. Petitioner will undoubtedly be, under the terms of the compromise only a licensee and not a tenant. ... It is the intention of the parties which is the decisive test, notwithstanding the fact that the word 'rent' being used in the compromise decree. If it can be culled out from the decree passed by a Court of competent jurisdiction that the intention of the parties was that the tenant willingly acquiesced to be a licensee rather than a tenant then he will undoubtedly be a licensee and nothing more. In these circumstances the landlord was certainly entitled to execute the decree of a Civil Court. ... In the first execution case, the tenant did not question the jurisdiction of the Court but sought time to deliver vacant possession till 7-1-1991. It is only when the tenant did not deliver vacant possession on 7-1-1991 as agreed by him, the landlord was compelled to file the second execution petition. ... It is difficult to impute an intention to create a fresh

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lease and that pursuant to the compromise decree there was no intention for the parties to enter into a relationship of landlord and tenant. In the facts and circumstances of the case, it has to be necessarily held that the petitioner was only a licensee pursuant to the compromise decree and that such decree is executable. — C.L Seetharam v J.C. Rudra Sharma, 1997(3) Kar. L.J. 37 (DB).

GRANTED ONLY BY A PERSON COMPETENT TO CONTRACT A Lease can be granted only by a person competent to contract and the lessor must have title to the property or authority from the owner of the property. — Lakshman Gidwani v Thimmamma, 1987(2) Kar. L.J. 426.

TENANT AT WILL Even if it is held that a tenant at will has no sure interest or estate, he cannot be evicted without a notice, the duration of which would be depended upon the nature of the lease. In the case of an Agricultural Lease, the notice must expire with the end of the agriculture lease. A tenant at will is none the less a tenant the concept of tenancy at will has reference to duration and interest in the Sand. He is not a tenant at the

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sweet will and mercy of the landlord.

The status and possession of a

person who was admittedly a tenant of premises covered by local rent restriction Act till date of commencement of a fresh lease, which turns out to be void for want of registration during and at the expiry of the period purporting to be reserved by such void lease would be that of a tenant. Such a tenant could only be removed by proper legal proceeding and he is not a licence without interest in the premises and could not be forceably evicted by the landlord entering on the premises and locking the same. Such tenant could defend his possession by a suit seeking a declaration and mandatory injunction. — Biswabani (Private) Limited v Santosh Kurmr, 1979(2) Kar. L.J. Sh. N. 98 (SC). Even if it is held that a tenant at will has no sure interest or estate, he cannot be evicted without notice, the duration of which would be dependent upon the nature of the lease. In the case of an agricultural lease, the notice must expiry with the end of the agricultural lease. A tenant at will is nonetheless a tenant. The concept of tenancy at will has reference to duration and interest in the land. He is not a tenant at the sweet will and mercy of the landlord. Hence, possession of the tenant at will, where notice to quit has not been issued, is not on behalf of the landlord and the landlord cannot to be in khas possession within Section 6 of the Bihar Land Reforms Act. The right to take possession is not khas possession. A tenant at will enters possession with the consent of the landlord and till his tenancy is determined, he is in lawful possession and cannot be styled as a trespasser. — Ramesh Bejoy v Pashupati Rai, 1979(2) Kar. LJ. Sh. N. 97 (SC). Where the lease contained a specific condition that the tenant shall give up possession of the house at the will of the landlord without demur and

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no definite period was fixed in the lease, the tenancy is one at will. Such tenancy can be determined either by demand to give up possession or by operation of law at the death of the lessor. — Bhimangoud v Golangouda, 1983(1) Kar. LJ. Sh. N. 23.

A RIGHT TO CARRY ON MINING OPERATION Section 105 — Every interest in Immoveable property or a benefit arising out of land will be immoveable property for the purpose of Section 105 of T.P. Act. A right to carry on mining operation in land to extract a specified mineral and to remove and appropriate it, is a right to enjoy immoveable property within Section 105 of T.P. Act, more so when it is coupled with a right to be in its exclusive has possession for a specified period, — Shri Shri Takeshwar Sio Thakur Jiu v Hari Dass. — 1979(1) Kar. L.J, Sh. N. 71 (SC).

TENANT DIES THE LEGAL REPRESENTATIVE HAS NO HERITABLE RIGHT TO THE TENANCY Houses and Rent — Statutory tenant — termination of tenancy — The legal representative has no right to inherit the tenancy. The relationship of landlord and tenant is regulated by the Provisions of the T.P. Act once since relationship, which is Contractual, is terminated under Section 111 of the T.P. Act, the tenant, if he continued in possession of the premises is

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called statutory tenant, Since tenancy can be terminated only by having recourse to the Rent Control Act. When the Court passes an order of eviction, the tenancy stands terminated. If subsequently, the tenant dies the legal representative has no heritable right to the tenancy — Radheshyam Modi v Jadunath Mahapatra, AIR 1991 Ori. 88.

PERPETUAL LEASE

Whether perpetual or for term — Proof — Onus — Though there is no presumption in law against perpetual lease, unambiguous language is required to infer such lease which has effect of depriving owner of his right to enjoy property for ever — Mere fact that lease is for 99 years at uniform fixed rent, with stipulation for renewal under same terms and conditions at option of lessee and fact that lease is binding on heirs, administrators, executors, successors and legatees of both lessor and lessee and further fact that lessee has made constructions on leased property at his own cost, would not raise presumption that lease is perpetual lease — Onus of proving that lease is perpetual is on lessee — In absence of provision for renewal at option of lessee for indefinite length of time and from generation to generation, lease is to be held term lease only with option for renewal for only once. Held: Though there is no presumption against perpetual lease, clear and unambiguous language is required to infer such a lease. If the language is ambiguous, not clear and admits of some doubt, the Court is required to opt for an interpretation

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rejecting the plea of a perpetual lease. This is necessary because if the Court leans in favour of a perpetual lease in the absence of the language being clear and unambiguous, the effect of such interpretation would be to deprive a owner of his right to enjoy the property for ever. There is no presumption in favour of the perpetual lease and the Courts are required to lean against perpetual lease in the absence of stipulations in that behalf being unambiguous or clear. . . . .The lease is for a period of 99 years. Therefore, there cannot be any doubt that when a period of 99 years is fixed in the lease deed, it is a term lease. The renewal, even if done at the option of the lessee, again could be for a term of 99 years only. Whether it be during the original period of Sease or even in the renewed period, the option is given to the lessee to surrender at his discretion. There is no provision in the lease deed which says that the renewal of the lease is for an indefinite period. In the absence of a specific provision in the lease deed providing that the renewal is required to be made at the option of the lessee for an indefinite length of time and from generation to generation, it is not possible to come to the conclusion that merely because the lease provides for a renewal of the term fixed in the lease deed under the same terms and conditions, that renewal is for an indefinite period and the lease is a permanent lease. The lease is only for a term of 99 years; and the option can be exercised to renew the lease only once. .... -Since the lease was for construction of a building and for establishing a Pressing and Ginning Factory, the term of the lease is fixed fairly long and a clause for renewal of the lease also is provided. Therefore, the long term provided in the lease with a renewal clause, cannot be understood as meaning that the lease is a permanent lease. Though the power of transfer or assignment of the lease is reserved to the lessee, the said provision specifically states that the transfer or assignment of leasehold interest of the lessee should not in any way affect

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the other conditions of the lease. The lease deed also provides that in the event the lessee is required to cut any tree growth in the land leased if the said tree growth becoming an obstruction to make use of the leased land for the purpose it was let out, the lessee can cut the trees, but hand over the tree growths to the lessor. This clearly shows that the lessor has reserved substantial interest in the leased premises and he has a right to the tree growths on the leased land in the event of the said tree growths are required to be cut. It is also provided that in the event of lessee vacating the demised land, he is required to deliver wood, stone and tiles used for the construction of the building to the lessor and take only the machineries and zinc sheets. — Channabasappa Gurappa Belagavi and Others u Laxmidas Bapudas Darbar and Another, 1999(1) Kar. L.J. 216A.

LEASE AND AGREEMENT TO GRANT LEASE Payment of advance to owner to make necessary repairs and alterations to buildings — Agreement between parties speaking of present demise in favour of payer of advance — Property to be handed over after repairs and alterations —Mere use of expression "present demise" not decisive for holding it to be lease when demise depended on completion of repairs and alterations in accordance with agreement — Contract is mere executory contract and not lease. Held: The covenants between the parties, it is clear that the possession over the property was to be handed over to the plaintiff after construction of the building with necessary alterations and additions as agreed to between the parties. The said clause also speaks of the present demise in favour of the plaintiff. The question is whether despite use of the words 'present demise', the instrument can be construed as merely executory being in the nature of

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'agreement to lease' and not 'lease'. The mere words of present demise as set out in the Document are not decisive for holding it to be a lease because in fact the demise is depended on the completion of the building in accordance with the requirement of the plaintiff which was under construction on the date of the execution of the said document. Therefore, the contract entered into by the parties has to be held as a mere executory contract and not one which has created the demise in praesenti. — Sheshagiri v Belgaum District Co-operative Bank Limited, Belgaum, 1995(4) Kar. L.J. 403.

LEASE AND LICENCE To ascertain the true intent and import of a document, the document should be read as a whole. The proper function of the preamble is to explain certain facts which are necessary to be explained before the enacting part of the statute can be understood. This would equally apply to a deed or a document. The preamble to the suit agreement show that the plaintiff is the owner and the proprietrix of the industry called the "Saravana Industries", that she has been doing business of manufacture and sale of steel furniture, grits, gates, steel windows, industrial works and fabrications pipe and electrical accessories etc., in the said industry and in the last para of the preamble, it is stated that the plaintiff unable to manage the industry more effectively due to her old age and therefore, she is desirous of hiring out the business with the machinery and tools, etc., to the defendant. The mere fact that the word 'factory' is not introduced but only the words 'hiring out the business with the machinery and tools etc.', are used, does not make the transaction any of

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the less of making over the factory will all the machineries and the tools etc., for carrying on the business subject to the terms and conditions of the agreement that were to follow in the deed. Hiring out the business with the machinery and tools without the entire building including the factory would not carry out the purpose and intention of the parties that the defendant were to carry on the industry which was being carried on by the plaintiff and which she was unable to carry on due to her old age. Reading the suit agreement as a whole, there remain no doubt that it is a lease of the factory along with the tools, machineries, furniture etc., and not merely hiring of the business with the machinery and tools etc. The subject-matter of the suit agreement is not a matter like a shandy place where people are allowed to vend their articles by paying market fee or a cycle stand where a party may keep his bicycle for few hours against payment of certain charges, without having any actual possession of the place or any interest being created in the land on which they transact their business or keep their bicycle. The subject-matter of the transaction between the plaintiff and defendant, in the instant case, is an industrial unit, manufacturing steel article of various kinds and unless the defendant had exclusive possession of the factory premises, the defendant could not carry on the industry of manufacturing various kinds of steel articles he was expected to manufacture. Considering the suit agreement as a whole, there is no doubt that it is a 'lease' and not a 'licence'. — Smt. Sundara Bai Ammal and Others v K.V. Rajagopai and Others, ILR1985 Kar. 1706.

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LESSEE IS ENTITLED TO A LIMITED INJUNCTION FROM BEING DISPOSSESSED FORCIBLY OTHERWISE THAN IN ACCORDANCE WITH LAW

A lessee after the expiry of termination of the lease does not yield up possession

—

Whether

entitled

to

injunction

against

forcible

dispossession by the lessor otherwise in accordance with the law — whether lessee has right to continue in possession and injunction can be granted. There can be no forcible dispossession of a person who has juridical possession and the landlord can be restrained from resorting to high handed acts aimed at forcible dispossession, otherwise than in accordance with law. No claim to a right to dispossess by the use of force without recourse to procedure in accordance with law is recognised or countenanced by Courts. Such a right in the respondent cannot be recognised regardless of the question whether or not the appellant itself has any subsisting right to remain in possession. The protection that the Court affords is not of the possession — Which in the circumstances is litiguous possession and cannot be equated with lawful possession — But a protection against forcible dispossession. The basis of relief is a corollary of the principle that even with the best of title there can be no forcible dispossession.The lessee is entitled to a limited injunction from being dispossessed forcibly otherwise than in accordance with law. — M/s. Patil Exhibitors (Private) Limited v The Corporation of the City of Bangalore, ILR 1985 Kar. 3700 : AIR 1986 Kant 194.

PURCHASE THE PREMISES FROM THE LANDLORD

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When a tenant agrees to purchase the premises from the landlord it was held that the tenant continue to be a tenant. — Rudrappa by L.Rs. v Danappa Malasiddappa, 1982(1) Kar. L.J. 284.

VOID LEASE - DEFEND HIS POSSESSION UNDER SECTION 53-A OF T.P. ACT When there is void lease and consequently the lessee is put in possession of the premises it does not become, a tenant under such void lease. He can only defend his possession under Section 53-A of T.P. Act. — Technicians Studio (Private) Limited v Lila Ghosh, 1978(1) Kar. L.J. Sh. N. 9 (DB).

RENEWAL CLAUSE Whenever a lease contains a renewal clause it confers an immediate right to a further extension as the covenant runs with the land and it is exercisable by the lesse at any time after the commence of the lease. — R. Kempraj v M/s. Burton Son and Company Private Limited, AIR 1970 SC 1872, relied on. When the Wakf Board has accorded sanction for leasing the suit property with a clause for renewal for a further period of 20 years at the option of the lessee, no further sanction was required to be obtained from the Wakf Board for renewing the lease. After the coming into force of the Transfer of Property Act, leases of immoveable property are governed by Chap. V of the Transfer of Property Act. Therefore, any principle opposed to the provisions in Chap. V of the Transfer of Property

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Act cannot be enforced. — Vishvarma Hotels Limited v Anjuman-elmamia and Others, 1982(2) Kar. L.J. 264. A licence in respect of a theatre was renewed on 29-12-1980 in favour of the licensee who was a tenant of the premises. The landlord of the premises challenged the renewal in a petition under Article 226 of the Constitution, alleging that the license was not in a lawful possession of the theatre on the date of the renewal. The lease was for 10 years from 10-71970 expiring on 9-7-1980. Under the lease deed option to renew the lease was given to the tenant and the tenant exercised the option by notice, dated 27-2-1980. Even after 9-7-1980 the landlord went on accepting rent. The tenant had made a deposit to be adjusted towards the rent of the last month but the landlord did not so adjust the deposit. HELD, when the tenant exercised the option by notice to the landlord before the expiry of the lease, a fresh lease came into existence. When the deposit was not appropriated by the lessor towards the rents for the last months of the tenancy expiring on 9-7-1980, it showed he had no intention to determine the lease. Further, whereafter the period was over, the lessor went on accepting the rents, it brought into effect a fresh tenancy. A subsequent notice issued in November, 1980 by the landlord determining the tenancy could not set at nought the tenancy which had already come into existence

Manjunath V.R. and Another v M.V.

Veerendra Kumar and Another, 1981(2) Kar. L.J. 147. A Lessee entitled to renewal of lease and in possession after the expiry of the original period with the consent of the owner is a lessee for a renewed period and is not merely holding over. —1964 Mys. LJ. Supp. 112.

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A tenancy for residence renewed by holding over can only be a month to month tenancy, though the rent reserved was yearly. —- Husensaheb Sayadsaheb Attar v Muktabai and Another, 1962 Mys. LJ, 1000.

In the case of a tenant holding over, the question whether the renewal of the lease is from year to year or month to month has to be determined with reference to Sections 116 and 106 T.P. Act and where the lease is not one for Agricultural or Manufacturing purpose, it must be deemed to be a lease from month to month. — Bheemappa Hanumanthappa and Another v Nagaraj alias Shivanagappa, 1966(1) Mys. LJ. 664.

Lease during the period when a tenant is holding over, is renewed from month to month, if the lease is not for Agricultural or Manufacturing purposes. — 1959 Mys. LJ. 165.

Lessee in occupation of property after the expiry of Lease, is a tenant holding over. A suit for eviction without notice to quit under Section 116 is not maintainable. Such a tenant does not become a tenant at sufferance on expiry of term under unregistered Lease Deed executed before filing of suit. — Satish Chand Makhan and Others v Govardhan Das Byas and Others, AIR 1984 SC 143.

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LEASE OR MORTGAGE – MERGER OF BOTH Where a document is of a composite character disclosing features of both mortgage and lease, it cannot be taken as a lease. The Court will have to find out the predominant intention of the parties viewed from the essential aspects of the transaction. There is one most essential feature in a mortgage which is absent in a lease (i.e.) that the property transferred is a security for the repayment of a debt whereas in a lease, it is a transfer of a right to enjoy the property. Where this essential feature of a mortgage is missing, the document is not a mortgage, — Puzikkal Kuttappan v Bhargavi, 1977(1) Kar. L.J. Sh. N. 66 (FB). Where there were many features in the document which were more consistent with a lease than a mortgage the transaction is a lease. — Tayawwa v Gangaiviva and Others, 1966(2) Mys. L.J. 560. Usufructory mortgage in favour of lessee already in possession — Stipulation in mortgage deed that possession of mortgagee to be treated as a fresn possession and that until payment of mortgage amounts, mortgagee is entitled to continue in possession — Absence of specific recital as to recovery of possession — Whether lessee had surrendered his lease-hold right was the qviestion that arose for consideration — Held, recitals had the effect of putting an end to relationship of lessor and lessee on creation of new relationship of mortgager and mortgagee — Explained. — Syed Imdad v R. Ramaswamy, 1989(3) Kar. LJ. 422. Possessory mortgage to tenant effect. Where a possessory mortgage was given to appellant who was in possession as a tenant on 21-5-1953 and it was stipulated that the lease was to exist upto 6-11-1953, the mortgagee

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was given power to sublet, the mortgagor was to do repairs and the possession was to be under the mortgage deed, and the mortgagee undertook to deliver possession of the property on the expiry of ten years. Held, the appellant had surrendered his tenancy from 7-11-1953 and thereafter the possession was only that of mortgagee and there was no question of the tenancy being kept in abeyance and reviving on expiration of the period of mortgage. There cannot be a merger of lease and mortgage in respect of the same property, since neither of them is a higher or lesser interest than the other. _ Shah Mathuradas Maganlal and Company v Nagappa Shankarappa Malaga, AIR 1976 SC 1565. Landlord mortgaged the house to the tenant — Tenant effected improvements — Landlord sold the property to respondent and another — Suit for redemption and possession — Contended by the appellants — Decision in Regular Appeal in favour of respondents — Challenged in RSA. – (1)Whether the leasehold rights of the appellant (mortgagor) got merged in the mortgage? Held.—It is well-settled that there is no question of merger as such of a lease with the mortgagee. In other words, it is not as if lease and mortgage cannot co-exist. This is clear from the decision of the Supreme Court in Gambangi Appalaswamy Naidu and Others v Behara Venkataramanayya Patro and Others, (1984)4 SCC 382 : AIR 1984 SC 1728. (2) Whether the lessee (defendant) impliedly surrendered his lessee's rights for the purpose of taking usufructuary mortgage of the property. Held—The fact that there was no stipulation to pay any interest on the mortgage money; the fact that there was no liability on the part of the defendant to pay rent after the mortgage came into force; the fact that there was no agreement to make any adjustment of payment of rent or interest; the fact that the mortgage period is fixed for about eight years; the fact that, if for some reason, plaintiff was unable to make payment

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even at the end of eighth year, the defendant was given an opportunity to continue on the land till the amount was paid and other circumstances would unmistakably indicate that the intention of the parties was not to continue the relationship of lessor and lessee as between the mortgagor and mortgagee. In the opinion of this Court, if these circumstances are tested by the guidelines given by the Supreme Court in Gambangi's case, the same would unmistakably point to the conclusion that there was an implied surrender of his tenancy on the part of the defendant immediately .before usufructuary mortgage was executed in his favour. — Abdulmsoolsab Chamanasab Phaniband v Ruth, 1990(4) Kar. LJ. 382A.

AFTER CONSENT DECREE – RECEIPT OF RENT DID NOT BRING FRESH LEASE Where the tenant was given time till the end of 1957 to hand over possession of the property under a consent decree, and he paid the rent in September, October, November and December, 1957 and mesne profits for January, 1958 and the receipt mentioned that what was received was rent, it was Held that the use of the word rent in respect of January, 1958 did not bring about a fresh lease between the parties. — Habighai Meharalli Bhavnagri v Shivaji Rao D. Jadhav, 1965(2) Mys. L.J. 672.

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STATUTORY TENANT

There is transfer of immovable property in favour of the petitioners. .... The very_instrument is titled as 'Lease Deed' and throughout in the said deed the words 'Lessor' and 'Lessee' are used. The sum of Rs. 6,00,000/paid by the lessees was for five years and eight months and the same was paid in advance instead of paying monthly rent every month. The recitals in the lease deed is binding upon the 3rd respondent as the execution of the said document is not in dispute. Having agreed so, it is not open now for the 3rd respondent to turn round and say that it was not a lease' but 'licence' and such licence was given to the petitioners to run the theatre for and on behalf of him. If really the petitioners were permitted to run the theatre for and on behalf of the 3rd respondent, there was no occasion for the petitioners to pay such huge amount to the 3rd respondent. On the other hand, the 3rd respondent himself would have paid amount to the petitioners for the services rendered by them and the money realised from the sale of tickets would have been taken by the 3rd respondent. The stand taken by the 3rd respondent in this regard is wholly untenable and such a stand is taken to suit his convenience. The 3rd respondent has admitted that the monthly rental of the premises would be Rs. 8,823.52. ... It is no doubt true that the lease deed is not registered and it is void. Nonregistration of lease deed does not take away the relationship of landlord and tenants. Therefore, it is held that the petitioners are statutory tenants under the 3rd respondent and their possession is lawful. . . . Admittedly, the theatre is a non-residential building. The monthly rental of the theatre is Rs. 8,823.52 p.m. for a period of 68 months. Hence, the Karnataka Rent

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Control Act is not applicable. Therefore, for the eviction of the petitioners, the 3rd respondent has to file a suit for ejection, after determining lease of the premises. .... The petitioners took possession of the theatre by virtue of the lease deed, pursuant to which possession was delivered to them. Thus, they entered into the possession of the theatre lawfully. After the expiry of lease period, their continuance in possession will not be unlawful until they are evicted by due process of law as they are the statutory tenants under the provisions of the Karnataka Rent Control Act. In this view of the matter, both the impugned endorsement and the order of the Appellate Authority are bad in law and are liable to be quashed. — R. Sreekanth and Another v The Divisional Commissioner, Bangalore Division, Bangalore and Others, 2003(2) Kar. L.J. 231. When a person remains in possession after termination of tenancy, he becomes statutory tenant. Although he can remain in possession he cannot enforce the terms of original tenancy. — Anand Nivas Private Limited v Anandji Kalyanji's Pedhi and Others, AIR 1965 SC 414. There is a distinction between a tenant continuing in possession after the determination of the term with the assent of the land lord and the tenant doing so sans his consent. The former is a tenant at sufference and the later a tenant holding over. Mere acceptance of amounts equivalent to rent by land lord from a tenant in possession after a lease had been determined, either by efflux of time or by notice to quit, and who enjoys statutory immunity from eviction except on well defined grounds as in the Act. If the tenant asserts that the land lord accepted the rent not as Statutory Tenant but only as a legal rent indicating his assent to the tenants continuing in possession it is for the tenant to establish it. Where

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he fails to establish it cannot be said that there was holding over by him. — Bhaitxmji Lakhamshi v Himdatlal Jamnadas Dani, AIR 1972 SC 819.

NOTICE TO QUIT a)

A notice to quit must be interpreted not with a desire to find flaws

in it which would render it defective, but it must be construed ut res magis valeat quam pereat. — Bhagabandas Agarwala v Bhagwandas Kanu and Others, AIR 1977 SC 1120 b)

A person in occupation of property under an unregistered but

compulsorily registerable lease does not become a tenant from month to month and a notice terminating the tenancy under Section 106 of the T.P. Act, is not necessary. — H- Mohammad Khan v H.K. Copal Shetty, 1963(2) Mys. L.J. 494. c)

A statutory tenant is not entitled to notice as envisaged by Section

106 if the transfer of property before an action in ejectment is commenced against him under any of the enabling provisions of the relevant rent restriction Act. — Firm Sardarilal Vishwanath v Pritam Singh, 1978(2) Kar. L.J. Sh. N. 25 (SC).

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d)

Before maintaining a petition for eviction under Section 21(1) of

the Karnataka Rent Control Act, 1961, it is not necessary for the landlord to determine the contractual tenancy by issuing to the tenant a notice under Section 106 of the T.P. Act

Papinayakanahalli Venkanna and

Others v Janadri Venkanna Setty, AIR 1981 Kant. 20 (FB) e)

In order to get a decree or order for eviction against a tenant under

any State Rent Control Act, it is not necessary to give a notice under Section 106 of T.P. Act. Determination of a lease in accordance with the Transfer of Property Act is unnecessary and a mere surplusage, because the landlord cannot get eviction of the tenant even after such determination. The tenant continues to be so even thereafter. That being so, making out a case under the Rent Act for eviction of the tenant by itself is sufficient and it is not obligatory to find the proceedings on the basis of the determination of the lease by issue of notice in accordance with Section 106 of T.P. Act Dhanapal Chettair v Yasoda, 1980(1) Kar. L.J. Sh. N. 90 (SC). f)

Ground of Eviction need not be set out in the notice. Reasons

stated in notice does not estop landlord from pleading and proving another reason. Issue of second notice to quit not necessarily waiver of earlier notice. See Kamataka Rent Control Act, Sections 11, 21(d) and 26. — Raghavendra v Maratha Co-operative Credit Bank Limited, 1977(1) Kar, L.J. 382. g)

It must be deemed that there is due service of the notice of

termination of a tenancy where the letter is sent by registered post, it being properly addressed, pre-paid and the letter contains the document. The contrary that is required to be proved to take away the presumption

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is with reference to the four requirements referred to above. It is only to meet the contingency of a person who is to be served with the notice trying to evade it, that the service shall be deemed to have been effected if the four conditions are fulfilled. Section 106 Para 2 does not prescribe that the notice should be sent by registered post; it could also be sent by ordinary post. Where the notice is sent under certificate of posting a presumption arises under Section 114, Evidence Act, that there has been due service. If tender or delivery to the party is known as impracticable, it is open to the landlord to adopt the procedure of affixture. —Achamma Thomas v E.R. Fairman, 1969(2) Mys. L.J. 179. h)

Notice by telegram : A notice through counsel by telegram

determining the tenancy complies substantially with Section 106- — Aldelli Gurusidappa v Veerabhadrappa, 1975(1) Kar. L.J. Sh. N. 76. i)

Notice terminating tenancy should not be interpreted with

strictness but should receive a liberal interpretation. If the.notice is sufficient to give impression that the tenancy is terminated at the end of the tenancy month, the notice is valid — Cherilal K. Wadhva v R. Chandrasekhariah, 1969(2) Mys. LJ. 564. j)

Person in occupation under an unregistered but compulsorily

registerable lease does not become a tenant from month to month and notice terminating tenancy is not necessary. — V. Ramu v M.V. Venkatappa, 1971(1) Mys. L.J. 443, k)

Possession after expiry of lease under unregistered deed notice to

quit not necessary. — Doddappa alias Sidramappa Nagappa Yatgiri and

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Others v Basavanneppa Basappa Chinniwalar, 1978(1) Kar. LJ. 414: AIR 1978 Kant. 140. l)

So long as there are words in the notice, justifying the view that the

notice itself determined the tenancy, the mere fact that there is no termination in so many words will not make it any the less a notice under Section 106. — Sheshacharya Balacharya Morab v MaUawwa, 1965(1) Mys. LJ. 697. m)

When a suit for eviction and mesne profits was instituted without

giving notice to quit under Section 106 of the Transfer of Property Act against a tenant in occupation of the rented property after expiry of the lease the suit would not be maintainable. Such tenant is a tenant holding over and notice of eviction under Section 106 of the T.P. Act was necessary. It cannot be said that on expiry of the specified period under the unregistered Lease Deed executed before the filing of the suit he became tenant at sufference under Section 111 (a) of the T.P. Act and the suit was maintainable without notice under Section 106 of that Act. — Satish Chand Makhan v Govardhan Das Eyas, AIR 1984 SC 143 n)

When the defective notice given by the tenant if accepted by the

landlord, it will determine the tenancy. — Calcutta Credit Corporation Limited and Another v Happy Homes (Private) Limited, AIR 1968 SC 471. o)

When the landlord fails to serve notice under Section 106, it does

not mean that such failure estops him from claiming a decree for eviction of tenant. — Krishanadeo Narayan Aganval v Ram Krishan Rai, AIR 1982 SC 783.

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p)

When the notice terminating tenancy does not grant longer time

for handing over possession, it does not mean that such failure affects the validity of the termination of the tenancy. — Arjunsa Shidramasa Mirajkar v Ganapatsa Hanmantsa Bakale and Others, 1964(2) Mys. L.J. 164. q)

Where the monthly tenancy was according to English calendar a

notice to determine possession on or before 30-11-1967 is valid. Eventhough the quit notice asked the tenant to vacate the house on or before 30-11-1967, the tenant was entitled to remain in possession till the midnight of 30-11-1967 and thereafter vacate it and still comply with the notice to quit. The notice was thus perfectly valid and complied with the requirements of Section 106 of the T.P. Act Peter Paul Coelho and Others v Constance D'Souza and Others, 1979(1) Kar. L.J. 219 : AIR 1980 Kant. 28. r)

When a lease terminates by efflux of time, notice of termination is

not required. See Karnataka Rent Control Act, 1961, Section 31. — Raghunandan Prasad Garg v Sreeramiah Setty and Others, 1970(2) Mys. L.J. 250. s)

Where a lease is for a specified term it expires by efflux of time in

view of Section 111(a). Therefore service of a notice under Section 106 is not necessary for termination of lease. — Smt, Shanti Devi v Amal Kumar Banerjee, AIR 1981 SC 1550. t)

A notice which is defective may still determine the tenancy if it is

accepted by the landlord. A notice which complies with the requirements of Section 106 of the Act operates to determine the tenancy, regardless of the fact whether the party is served with the notice or not or whether the

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party assents thereto or not — Calcutta Credit Corporation Limited v Happy Homes (Private) Limited, AIR 1968 SC 471. u)

Once a notice is served terminating the tenancy or showing an

intention to quit on the expiry of the period of the notice, the tenancy is terminated, unless with the consent of the other party to whom the notice is given the tenancy is agreed to be treated as subsisting. — Calcutta Credit Corporation Limited v Happy Homes (Private) Limited, AIR 1968 SC 471. v)

Landlord giving first notice to quit on grounds of arrears of rent

tenant fails to vacate and land lord gives second notice after one year and demands rent for period between 1st and 2nd Notices. In a suit for eviction land lord claims damages for use and occupation for period subsequent to second notice. It was held that the first notice was waived and the land lord had treated the tenancy as subsisting. — Tayabali Jaferbhai Tankiwala v M/s. Ahsan and Compamj, AIR 1971 SC 102.

DENIAL OF TITLE A person cannot be given the benefit of right to continue as a tenant and also contest the title of the landlord at the same time. When the tenant disputes the title of the landlord, irrespective of the technicalities of Section 106 of the T.P. Act, the landlord should be entitled to possession.

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— Rachavva and Another v Kariyappa Siddappa and Another, 1981(1) Kar. L.J. 186. The experience shows that in many HRC cases, tenants take up a plea of denying the title of landlords and also set up title in themselves. Ultimately, those contentions are found to be baseless. These pleas are taken up in most cases only to prolong the litigation and as by raising such a plea, the tenant is not going to lose anything. On the contrary, he will gain time. The effect of such contentions is that the proceedings get prolonged. Even after the order of eviction is passed, and sometimes even during the pendency of the eviction proceedings, suits are filed by the tenants claiming title in themselves and denying the title of the landlord and even setting up a title in third parties. In order to curb such ungoing to cost him with the order of eviction and also to see that the objects of the Karnataka Rent Control Act are given effect to, it is necessary to make a provision enabling a landlord to make it a ground for eviction in the event the denial of title of the landlord by the tenant is found to be not bona fide even if such a denial is made in the objection to the eviction petition filed under Section 21(1) of the Karnataka Rent Control Act. — Smt. Govindamma v Murugesh Mudaliar and Others, ILR1990 Kar. 2639 (DB)

MANUFACTURING PURPOSE AND LEASE PERIOD To constitute 'manufacture' there must be such transformation in the change out of which a new and different article must emerge having a distrinctive name, character or use. Generally coffee includes coffee

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powder. When coffee seeds are powdered without adding anything more, the resulting powder cannot be said to be another article with a distinctive name, character or use. The process out of which coffee seeds are converted into powder is not 'manufacture'. Where the tenant had taken the premises for grinding coffee seeds into powder and selling them, he cannot be said to be engaged in the manufacture of coffee powder and notice to quit giving 15 days time is sufficient. — Meghraj v Seshagiri Rao B., AIR 1977 Kant. 163 To be understood in popular sense in accordance with meaning in dictionary — Mere running of printing press cannot tantamount to engagement in process of manufacturing. Held: The expression 'manufacturing purpose' as used in Section 106 has to be understood in a popular sense in accordance with the meaning given in the Dictionaries. Therefore, the said expression cannot be construed keeping in view the special definition set out to those expressions in special statutes like Factories Act. According to the Dictionary meaning, the word 'manufacture' implies a change. But every change is not manufacture. For identifying a given change in an article as manufacturing, there must be a transformation, a new and different article must emerge having distinctive name, character or use. Keeping in view the facts of the present case, mere running of a printing press cannot tantamount to an engagement in any process of manufacturing though the process of printing results in some change on the paper surface over which the printing is done. — Virupakshaiah alias Veeraiah v Shivaputrappa Basappa Golappanavar, 1996(5) Kar. L.J. 53B.

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A lease of premises for carrying on business of retreading of tyres is not a lease for a manufacturing purpose, within Section 106 of the Transfer of Property Act. The broad test for determining whether a process is manufacturing process if whether it brings out a complete transformation for the old components so as to produce a commercially different article or commodity. Retreading process does not cause the old tyres to lose its original character. Definitions of manufacture in other enactments such as the Factories Act or the Excise Act should not be blindly applied to the Transfer of Property Act. — P.C Cheriyan v Darfi Devi, 1979(2) Kar. L.J. Sh. N. 99 (SC). When a lease is granted, the test to ascertain whether the lease is granted for manufacturing process, the following points should be noted.— 1. There must be evidence that a certain commodity was manufactured; 2.

That the process of production must involve either labour or

machinery; 3. That the product which comes into existence after the manufacturing process is complete, should have a different name and should be put to a different use. where lease was granted for running a flour mill wherein wheat waft transformed by manufacturing process which involved both labour and machinery, into flour it was held that all the three tests were fully satisfied and hence the lease was one for manufacturing process and could be terminated by giving 6 months notice under this Section. — Idandas v Anant Ramchandra Phadke (dead) by LRs., AIR 1982 SC 127

Section 106 — The lease deed was silent in regard to the purpose for which the premises was leased. It showed that what had been leased was

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shop premises. It did not say that what had been leased was a workshop premises. The word "Shop" ordinarily indicated that it was a place for buying and selling goods. The Court below rightly came to the conclusion that the lease was not for a manufacturing purpose, though the Appellant infact might have used the premises for a manufacturing purpose a couple of years after the premises was leased to him. As the lease was not for a manufacturing purpose, the notice of 15 days given in the case was proper and valid in Law. — Vittal Narayana v Channappa, 1973(2) Mys. LJ. Sh.N.12.

Where the lease was taken for carrying on bakery and saw mill business, if a lease for manufacturing purpose and the notice of termination require is of 6 months duration. Notwithstanding what is contained in Section 107, the Provisions of Sec. 106 of the Act will apply to a manufacturing lease, whether the lease deed is registered or unregistered, so as to make it a lease from year to year for the purpose of that Section, (i.e) to control duration of the period of the notice. — Rev Fatner John Augustine Peter Miranda v N. Datha Naik, 1971(2) Mys. LJ. 204

RELATIONSHIP OF TENANT AND LANDLORD

The H.R.C. Tribunal has given a finding that there is no relationship of landlord and tenant in the earlier proceedings between the same parties. Subsequent thereto the present suit came to be filed and the finding given

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by the H.R.C. Tribunal has become final and conclusive. Therefore, when on the question of legal-jural relationship between the parties competent Court of law has already given a verdict, despite the said verdict if plaintiff were to repeat and describe the relationship as landlord and tenant it would be only a contention without legal basis and non-description of the defendant's position as that of a trespasser also does not appear to be a fatal one since the suit is based on title and if some other person is in possession the owner of the property can always maintain a suit for possession basing on the title. Hence, under the circumstances suit is maintainable. — M.S. Narayana Rao v S.K. Pundareeka, 2001(3) Kar. LJ. 339A (DB).

ATTORNMENT TO SUBSEQUENT LANDLORD The month of tenancy was from 27th of each month and was to expire on 27-7-1974. Respondent purchased the property on 17-4-1967 and the tenant attorned to the purchaser. Held, attornment implies a continuity of tenancy created by the original landlord in favour of the tenant and the month of tenancy does not get altered. Therefore, the notice to quit issued by the purchaser requiring the tenant to quit and deliver possession on the expiry of 16-11-1967 on the basis that the tenancy was from the 17th of each month by virtue of the attornment was not according to law and the purchaser acquired no right to evict the petitioner. As a purchaser with knowledge of the petitioner being in possession as tenant, the respondent was bound by the terms of the lease. — Karupakale R. Govindiah v C. Veerabhadriah, 1974(2) Kar. LJ. Sh. N. 135.

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Where sale of a tenanted premises recited that vendor has attorned the tenants to the purchaser and the tenant attested the sale deed, it was held it proved attornment of tenancy to the purchaser. Sohanraj v Kanyalal Daga, 1979(1) Kar. L.J. Sh. N. 45. Rights of lessor's transferee to rent — Transfer of property by lessor without notice to lessee creates no privity of estate between lessee and transferee — Attornment of tenancy is legal pre-condition in case of transfer of property, if contract of lease is to be created between lessee and transferee — If lessee, not having notice of transfer, had paid rent to lessor even after transfer, lessee shall not be liable to pay such rent over again to transferee. Attornment of tenancy is a legal precondition in cases where changes take place with regard to the transfer of ownership. The tenancy is a legal obligation between two parties and if a new person comes into the shoes of the landlord, it is very necessary that notice of this fact be given to the opposite party and that the tenancy be attorned. In the absence of this being done, the right on the part of the new landlord to demand and receive the rent cannot be enforced. . . . The record clearly indicates that the petitioner had no notice of the change of ownership nor was the tenancy attorned. . . . The decree passed against the petitioner is vitiated in so far as it is impermissible to sustain that decree both on facts and in law. — T. Ratna Pandyan v P. Subramanyam Chetty, 1997(2) Kar. L.J. 365.

PERMANENT LEASE

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A lease of 1914 for erecting a factory and appurtenant buildings stated: it was to be for a term of 20 years certain, on payment of Rs. 350 as annual rent; even though the lessee may not continue to occupy the land, the lessee was granted the right to continue the lease as long as he desired to do so; on his choosing to continue to enjoy the leasehold, the lessee was obliged to pay annually the enhanced rent of Rs. 400 for the next ten years after October 1,1934, and after the expiration of ten years, the rent was further enhanced to Rs. 500 per annum; the lessee was given the option to give up the lease at any time after October 1, 1934 without further liability; the lessor bound himself not to call upon the lessee at any time to give up possession of the leasehold as long as the lessee was prepared to observe the terms of the lease. The lease was heritable and assignable. Held, the lease was intended to create a permanent lease and after the lapse of the first 20 years did not become a tenancy at will or even one for an indefinite term and therefore a lease for the lifetime of the grantee. Where land is let out for building purposes without a fixed period, the presumption is that it was intended to create a permanent tenancy. This presumption was not weakened by the fact that the lessee had stipulated to be entitled to give up possession if and when he decided to do so. It was an advantage specifically reserved to the lessee and did not confer any corresponding benefit on the lessor. That the lease was not intended to be for the life only of the grantee was clear not only from the facts, that it was meant for building purposes, was heritable and assignable and had*not reserved any right to the lessor to terminate the tenancy, but also from the consideration that the lessor would not gamble upon the life of his lessee when he was making sure of the term of at least 20 years. — Sivayogesivara

Cotton

Press,

Davangere

and

Panchaksharappa and Another, 1961 Mys. L.J. 1043 (SC).

Others

v

M.

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No permanent lease could be granted either orally or even by means of an unregistered deed. Once it is held that the lease as a permanent lease is invalid, then that lease will have to be treated as a precarious lease. Where a lease is invalid (by reason of absence of a registered instrument as required by Section 107 of the Transfer of Property Act), the fact it is invalid in law is a matter which the lessee must be presumed to know and he is not entitled to compensation for the permanent structure erected by him. He is only entitled to have it removed. — Rama Devadiga v Ganapami Karantha, 1962 Mys. L.J. 861: ILR 1962 Mys. 250.

UNLESS THE LEASE IS DETERMINED IN ONE OF THE BODIES UNDER SECTION 11 OF T.P. ACT, THE LANDLORD WOULD NOT BE ENTITLED FOR RECOVERY OF POSSESSION Section 21 Karnataka Rent Control Act refers to recovery of possession of any premises by the landlord, before the landlord approaches the Rent Control Court under Section 21(1), it is necessary that he should be entitled for recovery of possession. Unless the lease is determined in one of the bodies under Section 11 of T.P. Act, the landlord would not be entitled for recovery of possession, hence an action under Section 21 Rent Control Act cannot be instituted without first determining the lease. — Church of South India Trust Association v Sampangiraman, 1979(1) Kar. LJ. 85.

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CONTRACTUAL TENANCY – CONTRACT TO CONTRARY Section 106 of the T.P. Act applies to a contractual tenancy, though governed by Rent Control Act. — Bhaiya Punjalal Bhagwanddin v Dave Bhagwatprasad Prabhuprasad and Others, 1962 Mys. LJ. 712 (SC). When the compromise petition which was incorporated in compromise decree provided that the transferee should collect arrears of rent due, it is a contract to the contrary and hence the transferee is entitled to arrears of rent due before transfer. — Girdharilal (dead) by L.Rs. v Hukum Singh, AIR 1977 SC 129. Second para of Section 110 though refers to a lease for a year or number of years, principles reflected therein will apply even when time limited by lease is a month or a week or a number of months or weeks — Whether the tenancy is for year/s or month/s or week/s, principles contained in para 2 would be subject to an agreement to the contrary — Where the duration of lease was for period from 1-11-1974 to 31-1-1975, tenancy holding over was held to commence from 1-2- 1975 and such tenancy would be from month to month and that it should be terminated at the end of the month of the tenancy — Case-law discussed. — S.P. Gurjar v Muddanna Shetty, 1990(2) Kar. L.J. 213 : ILR 1990 Kar. 3099.

RENT ACCEPTANCE – WAIVER OF NOTICE

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The lessee was holding certain land of lessor for running a mill since 1905. In 1936, the lessee transferred his rights to a Company. In the lease deed there was not only an express clause under which the lessee was entitled to remove the stocks and materials within 4 months after the termination of the lease but thereafter there was another stipulation that in case the lessee failed to do so, all the buildings etc., would become the property of the lessor. The lessor sent to the Company a notice terminating the lease deed on the ground of breach by the Company of certain covenants contained therein. The time was allowed to the Company for the removal of machinery stores etc. The Company, however, secured an order from a Civil Court prohibiting the lessor from ejecting it. In land acquisition proceedings at the instance of Company for its own purpose, the questions were whether there was waiver of notice by acceptance of rent by landlord, whether there was forfeiture of tenancy under Section 111(g) of the T.P. Act and whether there was compliance with Section 114-A of the T.P. Act. The Supreme Court held that there was no waiver of notice. When there was no evidence to show that the rent was accepted at any time after the notice was given to Company, and secondly as the rent was accepted by lessor under protest, it could not amount to waiver because there was no intention on the part of the lessor to treat the lease as subsisting. — Basant Lal (dead) by L.Rs. and Another v State of Uttar Pradesh and Another, AIR 1981 SC 170 When the permanent lease is void for want of sanction, acceptance of rent by landlord makes the tenant a monthly tenant. Non mention of year in the notice can be reasonably construed. Where the intention was clear, not stating that the tenancy is terminated not material. — 1973(2) Mys. L.J. Sh. N. 300.

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TRUST PROPERTY When there are several trustee landlords one of them can terminate tenancy — 1962 Mys. LJ. 57. LEASES OF INDEFINITE PERIOD The rule of construction embodied in Section 106 of the T.P. Act is applicable not only to express leases of indefinite period but also to leases implied by law which may be inferred from possession and acceptance of rent and other circumstances. — Ram Kumar Das v Jagdish Chandra Deo, Ohabal Deb and Another, AIR 1952 SC 23

LESSEE AND THE ASSIGNS Where the lease is with the lessee and the assigns, the lessee and assigns being called lessees, the lease permits sub letting, and consent is lessor is not necessary for sub letting. — 1964 Mys. L.J. Supp. 112. In the case of a lease there is privity of contract between the lessor and the lessee and the lessee cannot divest himself of his liability to the lessor by merely making an assignment of the lease. Assignment of the lease may result in primity of estate between the assignee and the lessor inconsequence of which both the assigning lessee and assignee become liable to the lessor for the payment of rents. — Devidasa Bhatta v B. Ratnakara Rao and Another, 1965(1) Mys. L.J. 731.

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The words "Such consent, however, not to be unreasonably withheld in the case of respectable or responsible persons" contained in the covenant in a lease allowing the lessee to assign his interest only with the lessor's written consent does not amount to a separate or independent covenant by the lessor that he would not refuse consent except upon reasonable grounds in the case of respectable person, but they limit or qualify the lessor's covenant not to assign the defined premises without the consent in writing of the lessor. — Kamala Ranjan Roy v Baijnath Bajoria, AIR 1951 SC 1 When the entire interest in land is transferred by lessee with reservation to take back' possession on failure of transferee to discharge lessee's liability towards lessor within stipulated time and the lessor accepts part payment from transferee without recognising him as debtor, the lessee has right to recover possession according to agreement between the lessor and the lessee. — Parkash Chand Khurana v Hamam Singh, AIR 1973 SC 2065. When the tenant has sublet the premises and the subtenant caused material damage to building, the landlord can evict the tenant on the grounds that the subtenant has caused damage to the building. There is no privity of contract between landlord and subtenant. The tenants obligation to maintain the building in good condition continues even after creation of sub-tenancy. The tenant is responsible for wrong acts of subtenant and so liable to be evicted for damage caused by subtenant — M/s. Laxmi Narain Gauri Shankar v Gopal Krishan Kahoria and Another, AIR 1987 SC 8.

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LEASE BY AFFLUX OF THE TIME Where the tenant did not vacate the premises on the expiry of the lease by afflux of the time under Section 111(f), T.P. Act, and the case is governed by the provisions of the T.P. Act, the continuance in possession of the tenant after the expiry of the lease is unauthorised and wrongful and a decree for damages are mesne profits is rightly awarded against him. — Shyam Charon v Sheoji Bhai, 1978(1) Kar. LJ. Sh. N. 10 (DB).

CLAIM OF TITLE IN HIMSELF ON THE PART OF THE LESSEE Where the very case of the landlord is based on a contractual tenancy, it must be determined by a notice in accordance with Section 106, T.P. Act, for the landlord to earn the right to obtain possession of the leased premises under the Rent Control Act. This point was allowed to be taken in revision for the first time. Claim of title in himself on the part of the lessee would not ipso facto put an end to the lease. It confers a right on the lessor, if he so elects, to determine the lease by a notice as required by Section 111(g) of T.P. Act. — Dyamappa Butti v Somappa, 1968(1) Mys. LJ. 221.

NOTICE CLAIMING RENT AT THE ENHANCED RATE If a notice claiming rent at the enhanced rate is given by a landlord to his tenant giving him the option to vacate in case he is unwilling or unable to pay the enhanced rent and the tenant continues to be in occupation of the

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premises without protest, the landlord would be entitled to recover rent at the enhanced rate, unless the Court finds that the enhanced rate is itself unreasonable or penal. Where a tenant denied the right of the landlord to enhance the rent unilaterally and refused to pay enhanced rent and the landlord did not take steps to evict the tenant, the tenant is not liable for the enhancement. The landlord could not unilaterally determine what is the fair or reasonable rent for the premises and claim it from the tenant so long as the relationship of landlord and tenant between them had not come to an end. — J.P. Sagar v State of Mysore, 1964 Mys. L.J. Supp. 605.

NOTICE IN THE ORIGINAL WRITTEN LEASE COULD NOT BE IMPORTED INTO THE NEW TENANCY CREATED BY HOLDING OVER A lease of a premises for a period of 10 years on an annual rent of Rs. 100 expired on 15-10-1958. The lease provided that if after five years from the date of the lease the landlord wants the premises for constructing a house for his own use he should ask for the premises after giving the tenant six months' notice. That occasion did not arise and the tenant continued in possession even after the expiry of the period of lease. On 15-10-1965 the tenant agreed to pay enhanced rent of Rs. 125 per year and an endorsement was made on the original lease deed. On 19-5-1969 the landlord served notice on the tenant to surrender possession after six months. On the expiry of the period of six months, the tenant refused to surrender possession. Held, (1) The notice issued was not in accordance with the terms of the lease. (2) That the term as to notice in the original written lease could not be imported into the new tenancy created by holding over and the necessary consequence was that the notice issued by

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the landlord was invalid. — E. Keshavayya v R, Namsimha Prabhu, 1975(2) Kar. L.J. 232 : AIR 1976 Kant. 41.

LEASE OF FISHERY A lease of fishery which is immoveable property as defined by Section 2(6) of the Registration Act, if it is for any term exceeding one year or reserves a yearly rent should be registered by Section 17(l)(d) of the Indian Registration Act, 1908 and Section 107 of the Transfer of Property Act. — Bihar Eastern Gangetic fishermen Co-oper.ative Society Limited v Sipahi Singh, AIR 1977 SC 2149.

ALTERING EXISTING REGISTERED LEASE DEED Any agreement which alters the essential terms and conditions of an existing registered lease must be registered. — Sunil Kumar Roy v M/s. Bhaiura Kankanee Collieries Limited, AIR 1971 SC 751.

HEREDITABILITY OF TENANCY OF INDEFINITE TERM The Courts in India cannot apply the principle of Law that if the term mentioned in a lease is definite the interest of the lessee is heritable and if the term mentioned is indefinite, the interest of the lessee is not heritable. Whether the interest is heritable entirely depends on the wordings of the document and the intention of the parties. — Narayan Narasimha Deshpandey v Kasiroya Sangappa, 1960 Mys. L.J. 530.

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LEASE — OF IMMOVABLE PROPERTY FOR PERIOD NOT EXCEEDING ONE YEAR Registration and attestation of lease deed not required — Examination of attestor not required to prove execution of such deed. Held: Section 107 of the Transfer of Property Act deals with the procedure as to how leases have to be made. Section 107 does not require attestation of a lease not exceeding one year. When the lease deed requires no attestation, Section 68 of the Evidence Act will not be applicable and lease deed could be proved by examining the scribe as done in this case. — T. Anthonidas alias T.A. Das v S.P. Mariyappa, 1996(3) Kar. LJ. 329A.

Lease of immovable property from year to year — Mandatory that such lease should be by registered instrument — Where it is not so made, tease is to be taken as monthly lease for purpose of Section 106 of Act. Held: Under Section 107 of the Act, it has been provided that a lease of immovable property from year to year or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. In view of this statutory provision, it was mandatory to execute a registered instrument, if the tenancy was contemplated to be annual in nature. In the present case, since admittedly it was not made by a registered instrument, the lease cannot be taken to be an annual lease. Therefore, necessarily it has to be taken as a monthly lease for the purpose of Section 106 of the Act. — Virupakshaiah alias Veeraiafi v Shivaputrappa Basappa Golappanavar, 1996(5) Kar. L J. 53A.

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VOID LEASE – REGISTRATION COMPULSORY Where a verbal agreement was made for the grant of a lease for 5 years and in anticipation of execution of a lease deed, the lessee was put in possession by the lessor who received 3 months rent as advance but no lease deed was executed, it was held that lease was void because of the prohibition under this Section. — National Textile Corporation Limited v Malathesha Enterprises and Another, 1980(2) Kar. LJ. 335.

When there is a lease agreement in respect of a building for indefinite period for carrying on business in which the rent payable by the lessee is agreed to be settled on basis of percentage of profits earned after 15 months from commencement of lease. The lease is evidenced by unregistered document. It was held that the lease was one for a period exceeding one year and hence registration was compulsory under Section 107 of the T.P. Act. — Delhi Motor Company and Others v U.A. Basrurkar (dead) by his LRs. and Others, AIR 1968 SC 794.

MULGENI LEASE

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Where a mulgeni lease (in South Kanara District) stated that 'if any timber trees were cut and removed, the lease was liable to be forfeited and determined'. Held, this provision indicated that there was a prohibition to cut and remove timber trees and the lessee had no right in respect of timber trees. That the lessor has no rights in future growth has been recognised to be the principle prevailing in respect of trees in South Kanara in regard to permanent leases. Hence, on the basis of the custom or usage prevailing, and in the absence of any specific term in regard to future growth, the tenant would be entitled to rights in trees of spontaneous growth or that came to be planted after the date of the lease deed : and the landlord would have no right to interfere with the right of tenant to such tree. — Seethamma v Louis Patroo, 1975(1) Kar. LJ. Sh. N. 36. According to the terms of the mulgeni instrument, the tenant had a right to continue to be in possession of the property from generation to generation, the landlord having no right to resume the land. The only right reserved for the landlord was the right to recover the rent as and when it fell due and to recover it by the enforcement of a charge, which had been created on the property, leased to the tenant. The only process by which the landlord would perhaps be entitled to recover possession of the land was when there was a reversion to him of that land by reason of the death of the tenant for the time being, who left no heirs and died intestate. The tenant cut and removed five trees, which were in existence at the time of the lease. Held, (1) A lessee has no right to cut or destroy trees which existed on the leased premises when the lease was created, but that trees which have subsequently been planted on the premises by the lessee or which have spontaneously grown after the commencement of the lease may be so removed or cut by him. (2) The value of the trees

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removed would not represent the correct measure of damages, as the landlord had no right to the immediate possession of the land or to the trees. The measure of damages must rest on the dimunition in the value of the reversion and the dimunition in the security. The proper damages would be to estimate the diminution in the value of the property and deduct from it a discount for immediate payment. — Madhwaraya Udpa v Dasa Tantri, 1963(2) Mys. LJ. 416: AIR 1964 Mys. 179.

PUTTING UP FIRST FLOOR ON TERRACE BY LESSEE Lessee running business of manufacturing vermicelli using terrace portion for drying vermicelli — Lessee commenced putting up first floor on terrace — Lessee obtained an order of temporary injunction — Contended that lessor had not reserved right of re-entry and thus had no right to put up 'building' on thereof — Rights of lessor. Held, The view that roof is not included in the definition of 'building' appears to prima fade wrong. The terrace is the top portion of the roof. Merely because the landlord has not reserved the right of re-entry, it does not mean that he has no right to put up the first floor. His right to put up first storey on the terrace of the building cannot be defeated only in the ground that he has not reserved the right of re-entry. If interference does not affect the object of the lease for which it is taken, then it cannot be said to be an interference with the quiet enjoyment of the building. — Salauddin v Bommegowda, ILR 1985 Kar. 2959.

TERM OF LEASE

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When lease is made for a specified term a third person gets into possession under title alleged to be derived from the lessee under certain transfers. Lessor questions the validity of the Transfer and sues the third person for possession. HELD, lessor cannot succeed till the expiry of term of lease — Parashram Mahadeo v Rajen Textile Mills (.Private) Limited, AIR 1975 SC 2079.

COURT IS NOT AT LIBERTY TO BREAK UP THE CONTRACT When the premises are let for residential and non-residential purposes, the contract of tenancy should be deemed to be single and indivisible. The Court is not at liberty to break up the contract. That the relief should be limited to that portion which is used for residential purposes is not valid. — Miss S. Sanyal v Gian Chand, AIR 1968 SC 438.

ACCESSION TO ADJOINING AREA OF LEASED PROPERTY Encroachment by tenant during tenancy upon landlord's vacant land adjoining tenanted premises — Presumption is that land encroached upon are added to tenure for benefit of tenant so long as tenancy continues — Tenant cannot acquire title to encroached land by adverse possession but obtain only right of tenancy under landlord — Tenant is obliged to hand over encroached area also to landlord on determination of lease along with premises originally demised. Held.—There is a presumption that whenever a lessee or a tenant encroaches upon the

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adjacent area to his leased or tenanted premises, then such encroached area or premises or property, also gets included as the 'Leased or Tenanted' property and the tenant is obliged to protect the landlord's rights in respect of the encroached area also, and deliver up unto the landlord at the end of tenancy the said encroached area alongwith the original tenanted or leased area. . . . The open space on the northern and eastern side of the leased portion prima facie belong to the landlord. This disputed vacant land is also to be considered as tenanted property. If it is held as a tenanted property then the relationship of the petitioner in respect of the disputed property is also to be held as one of landlord and tenant. In that view the petition under Section 21(1) is maintainable for eviction. — Syed Nazmuddin v N.S. Krishna Murthy, ILR 1998 Kar, Sh. N. 65.

When the lessee claims accession to lease hold land and makes contradictory pleas in the alternative, the claim for accession of land by the lessee cannot be sustained. — Chapsibhai Dhanjibhai Dand v Purushottam, AIR 1971 SC 1878.

ACT OF COURT SHALL NOT INJURE ANY ONE Section 108(e) — Kamataka Rent Control Act, 1961, Sections 21(l)(h) and (j), 25, 26 and 27 — Lease and right of re-entry — Termination of lease not automatic when leasehold is destroyed — It is at option of lessee — Right of entry under Rent Control Act is traceable to provisions of Section 108(e) of Transfer of Property Act — Interest of tenant does not survive in case of eviction under Section 21(l)(h) — His interest survives in case

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of eviction under Section 21(l)(j) — Court has ample power to protect tenant's interest in case of eviction under Section 21(1 )(j). Held: The interest of the tenant does not survive in view of the order of eviction under Section 21(l)(h) of the Act. This power of the Court can be traced to the analogous rights of the parties that subsists under Section 108(e) of the Transfer of Property Act. Under general law as codified in the Transfer of Property Act, the tenant is entitled to treat the lease as subsisting in the event the landlord of his own accord destroys the tenament. His remaining in possession of the premises in question would be legal and the landlord is not entitled to prevent his retaining possession. But in a case under Section 21(l)(j), such entry and demolition of the tenament has taken place under the authority of law. The authority of law conferred on the landlord permitted him to enter into the leasehold property, pull down the building only on his undertaking to reconstruct the same. If he abuses this permission, namely, fails to honour his undertaking, his remaining in possession of the premises after demolishing the building is tantamount to remaining there without the authority of law. It is as if he had no permission at all to enter the property and pull down the building. If that be so, the principle that the act of Court shall not injure any one should be applied and the Court be empowered to give all directions as is in law a party is entitled to, so that the parties will be restored to the position prior to the permission being granted under Section 21(l)(j) of the Karnataka Rent Control Act. This can be achieved only if permission is granted to the tenant to resurrect or reconstruct the building that is demolished by the landlord. If that be so, in a case of eviction under Section 21(l)(j), the Court has ample power and is bound as well to issue such appropriate directions to meet the ends of justice which will enable the tenant to reconstruct the building as well. — Baburao Ganpatrao

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Tirmalle v Bhimappa Venkappa Kandakur since deceased by his L.Rs., 1996(2) Kar. LJ. 32F.

TENANT ATTEMPTING TO CARRY OUT REPAIRS TO RENTED SHED AND PUT UP PERMANENT STRUCTURE WITHOUT LANDLORD'S PERMISSION, ILLEGAL. The suit is in between the landlord and tenant. The rent karar was for a period of 11 months and therefore the defendant's position is that of a tenant holding over. Even then if the defendant felt insecurity or wanted certain repairs to the building as a measure of security, he had every right to approach the landlord, obtain his permission and put up construction. There is nothing to indicate in the evidence that defendant at any time approached the plaintiffs and obtained permission. Section 108(f) of the Transfer of Property Act provides a remedy in a situation where the landlord neglects or refuses to effect necessary repairs. Sub-section (h) empowers him to remove such fixtures even after the determination of the lease subject to the condition that he leaves the property in the state in which he received it. These things and the question of law on the point have been ignored by the Appellate Court in considering the evidence both oral and documentary. It is an error in law and defect in procedure which requires to be corrected in appeal. — Noorulla Amin Musuba and Others v Chandru Sheniyar Naik, 1996(6) Kar. LJ. 275D.

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LESSOR IS ENTITLED TO REMOVE COMPOUND WALL PUT UP WITHOUT HIS CONSENT.

Even to effect repairs the tenant is expected to give notice to the landlord. In the instant case the appellants have not even bothered either to intimate the landlord or obtain necessary permission for the purpose of erection of compound. Further, the appellants also never bothered to know from the landlord regarding measurement of the premises bearing No. 17. Further, the appellants are also not able to establish that they had put up the compound within the premises bearing No. 17. Under these circumstances the Trial Court is justified in not exercising its discretion in the matter of granting injunction in favour of the appellants. .... The Trial Court having considered all the materials placed before it declined to grant injunction in favour of the appellants. If that is so, there is no reason to interfere in the order of the Trial Court in these two appeals. — The Home School, Bangalore and Another v M. Shaft Ul Haji and Another, 2001(6) Kar. L.J. 93.

OWNERSHIP/REMOVAL OF BUILDING CONSTRUCTED BY TENANT – DEPENDS ON CONTRACT. Lease of vacant land — Condition permitting lessee to construct building on leasehold land and requiring him to surrender possession of land with building on expiry of lease without compensation — Ownership of building vests in lessee so long as lease is subsisting, and on expiry of lease, it passes on to lessor — Matter is one of contract between parties.

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Normally, under Section 108 of the Transfer of Property Act, before the expiry of the lease, a lessee can remove all structures and building erected by him on the demised land. All that was necessary for him to do was to give back the land to the lessor, on the termination of the lease, in the same condition as he found it. The ownership, therefore, of the building in this case was not with the lessors but was with the lessees. Under Section 108 of the Transfer of Property Act, there was nothing to prevent the lessees contracting to hand over any building or structure erected on the land by them to the lessors without receiving any compensation. In other words, although under Section 108 the lessees had the right to remove the building, by the contract they had agreed to hand over the same to the lessors without the right to receive compensation at the end of the lease, the matter being entirely one of contract between the parties. Such a contract, however did not transfer the ownership in the building to the lessors while the lease subsisted. — S. Shivamthan (deceased) by L.Rs. v S.G. Narayana, ILR1998 Kar. Sh. N. 90.

A lessee who has put up a building with the consent of the landlord on the leased premises, is not entitled to be compensated for the costs incurred by him in respect of the structures put up by him, when the tenancy is terminated and when he is called upon to quit and deliver the possession of the property to the lessor — Mohammad Hayat Sahab v Radhakrishna Bhaktha, 1968(1) Mys. L.J. 63 Where lessee has agreed to construct building of value of not less than Rs. 15,000/- which at the expiry of the lease was to become the property of the lessor and the building valued at Rs. 50,000/-, the lessor is entitled to

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building and not merely structures worth Rs. 15,000/-. Y:V. Srinivasa Murthy by L.Rs. v Pillamnw and Others, 1973(2) Mys. L.J. 399.

When the Lease deed provides for passing of ownership of superstructure built by lessee to lessor after expiry of tenancy, the lessor is under obligation to pay certain percentage of market value of structure to lessee under the agreement. The lessee cannot retain possession until amount is paid — Madan La! v BHai Anand Singh, AIR 1973 SC 721.

The lessor is not debarred from determining the lease or filing a suit for ejectment merely because the lessee has made construction to the knowledge of the lessor — Jagat Ram Sethi v Rai Bahadur D.D. Jain, AIR 1972 SC 1727.

CHALGENI LEASE A lessee under a chalgeni lease may, in the absence of a prohibition contained in the lease itself assign his lease hold interest for the duration of the term of the lease or the balance of it at the time when the assignment is made. After the expiry of the term of the lease, the assignee has no interest subsisting as to entitle him to a declaration of his being a chalgeni tenant. A renewal of the lease by the tenant holding over and the landlord receiving the rent, is a renewal of pre existing contractual relationship, and the benefit of such renewal cannot be claimed by the

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assignee after the expiry of the term. — Umamaheshiuara Temple by Trustee v Leo Cresta, 1966(2) Mys. LJ. 483.

LESSEE FILING SUIT FOR MANDATORY INJUNCTION Certain part of land was leased to a person. The lease granted a portion of a land on license to another for a specified period. The license was terminated after the expiry of the period. The lessee against licensee filed a suit for mandatory injunction. The licensee claimed to have purchased the land from the owner. Suit by lessee for possession is maintainable. See Specific Relief Act, 1963, Section 6. — Sant Lal Jain v Avtar Singh, AIR 1985 SC 857.

SUB-LESSEE RIGHTS Premature surrender of leasehold rights by main lessee and its effect on right of sub lessee — Such surrender does not operate as eviction of sub lessee — It only brings sublessee into direct contact with lessor, making sub lessee himself main lessee under lessor on terms of existing sublease — If, after such surrender, new lease is entered into with third party, such third party who has become new lessee, does not step into shoes of his predecessor lessee who had created sublease and does not ipso facto become landlord of sub lessee for purpose of evicting sub lessee — Where main lessee, partnership firm, had prematurely surrendered its leasehold rights after creating sublease, and on such surrender, third party

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individual became main lessee, new lessee does not become landlord of existing sublessee for purpose of evicting him. Held: It is well established that the lease is a transfer of interest in immoveable property. Section 105 of the Transfer of Property Act, 1882 provides that a lease of immoveable property is a transfer of right to enjoy such property made for a certain time, express or implied, and for consideration. Clause (j) of Section 108 of the T.P. Act, subject to any contract to the contrary, authorizes the lessee to sublease the whole or any part of his interest in the leasehold property. .... During the subsistence of the lease, the sublessee in whom the lessee's interest is vested, acquires right to continue in possession over the demised premises during the subsistence of the lease. Therefore, coming to the facts of the present case, but for the surrender of the lease by the head lessee i.e., the firm, the petitioner was entitled to continue his possession over the petition premises till 1978 in his own right since the lease in favour of the firm was for a period of 9 years. . . . .Despite the above noted statutory provisions and consequent right of the petitioner flowing there from, the same was sought to be destroyed by the respondent on the strength of a registered lease deed dated 6-2-1974 obtained from the owner by taking a plea that he had obtained the said lease on surrendering of its leasehold rights by the firm and thus, he has stepped into the shoes of erstwhile lessee firm. Thus, according to him, he has become landlord of the petitioner as defined under Section 2(h) of the KRC Act. According to the said provision, in respect of a subtenant, the tenant, who has sublet the premises is the landlord for the purposes of the said Act.. . .It is no doubt true that the sub lessee's interest being carved out of lessee's interest, it will, as a general rule, be determined by the determination of the lease itself. But, determination by surrender of the lease by the lessee is an exception to this general rule. Surrendering being a voluntary act on the part of the lessee, the principle that a man cannot

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derogate from his own grant will come into play and the lessee's action will not be allowed to prejudice the sub lessee. It is this equitable principle, which has been incorporated in Section 115 of the T.P. Act. By operation of this statutory provision on surrender of the lease by the head-lessee, the sub lessee becomes a lessee of the lessor on the terms of the sublease. Thus, the under lessee, by operation of law is brought into direct contact with the lessor, except where surrender is made by the head lessee for obtaining new lease. .... .The plea raised by the respondent is that before the lease was granted to him on 6-2-1974, the firm had expressly or impliedly surrendered the lease granted in its favour. If that be so, then by operation of the statutory provisions under Section 115 of the T.P. Act, the petitioner being the under lessee, himself became the head lessee under the Math. Therefore, there could not have been any occasion for granting any competing lease to the respondent in respect of the petition premises. For this reason, it has to be held that respondent at no point of time, became the landlord of the petitioner for the purpose of the K.R.C. Act entitling him to maintain any eviction proceedings there under against the petitioner. — Krishnasa Kheerasa Habib v Shah Parasmal Pittaji Jain, 2000(1) Kar. LJ. 12.

THE TENANT IS NOT ENTITLED TO SUSPEND PAYMENT OF RENT When landlord fails to give possession of one out of three bed rooms of demised premises, the tenant is not entitled to suspend payment of rent, but he must pay proportionate rent. — Surendra Nath Bibra v Stephen Court Limited, AIR 1966 SC 1361.

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PURPOSE OF LEASE The purpose of lease of certain land was that the premises was not to be used for any purpose other than the specified purpose. When the tenant uses the premises for other purpose which is connected with the main purpose, it could not be said that the premises was used for the purpose other than that of the lease. The inhibition of Section 108(o) is not attracted. — Jnan Ranjan v Arun Kumar, AIR 1975 SC 1994.

POSSESSION ON THE EXPIRY OF THE LEASE

A condition that the lessee has to put the lessor in possession on the expiry of the lease is to be read in the lease even in the absence of such condition. — Thayarammal v People's Chanty fund and Others, 1978(1) Kar. LJ. 438.

FUTURE LESSEE RIGHT TO EVICT EXISTING LESSEE

When the lease is to commence from expiry of the existing lease, the lessee can sue for eviction of original lessee. The right of transferee under the Section is not curtailed by Rent Control Act. See Karnataka Rent

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Control Act, Sections 3, 4 and 31. — N. Venkataramana Bhat v A. Prabodh Naik and Others, 1975(1) Kar. LJ. 262.

DETERMINATION OF LEASE Where a widow having a right of residence in a family house created a tenancy, such lease stood determined on her death. Section lll(c). See T.P. Act, Section 6(g). — Bhujabalappa Anandappa Baragali and Another v Veerappa Mahabaleshappa Doddamani, 1966(2) Mys. L.J. 56. Lease is determined on expiration of notice to determine thereof — Lessee is bound to put lessor into possession of property, on determination of lease — Question of bona fide requirements of landlord not required to be gone into — Provisions of Section 21(1) of Karnataka Rent Control Act, 1961 regarding eviction of tenant are not attracted when suit is under Transfer of Property Act and suit premises are situated in place to which provisions of Rent Control Act do not apply. Held: The suit instituted by the appellant under the provisions of the Transfer of Property Act, 1882. The property in dispute is situated in Akki-Alur village to which admittedly the provisions of the Karnataka Rent Control Act, 1961 do not apply. Therefore the question of bona fide requirement of the premises for appellant's use was not a matter that was required to be gone into. The appellant incidentally or inadvertently referred to the

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requirement of the premises for his bona fide occupation but the appellant was not required to prove that averment of bona fide requirement of the premises for a decree of eviction. In a suit under the provisions of the Transfer of Property Act, 1882 under Section 108 of the Transfer of Property Act, 1882 under clause (q), on the determination of the lease the lessee is bound to put the lessor into possession of the property. Section 111, Transfer of Property Act which deals with determination of lease states that lease of immovable property determines on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other. — Shantaveerappa Puttappa Chaushetti v Gangaram Hemajeppa Kalal (since deceased) by L.Rs. and Others, 1996(3) Kar. L.J. 338.

SALE OF AGRICULTURAL LAND - WHERE TENANCY EXISTED An agreement to sell was executed in favour of the plaintiff, a tenant and the tenant continued in possession and in execution of a money decree against the plaintiff-tenant, the property was brought to sale and purchased by the decree-holder and thereafter the plaintiff brought a suit for declaring the execution sale as void and not binding on him. No objections were filed by plaintiff after the notice under Order 21, Rule 66 of the CPC was served on him. Section 28 of the Bombay Tenancy and Agricultural Lands Act prohibited Sale of tenancy rights. Held, that the question whether the plaintiff's rights of tenancy in the suit land got merged in the rights acquired by plaintiff under Section 53-A of the Transfer of Property Act cannot be raised for the first time in second

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appeal. Since only the right to ask for specific performance had been acquired by the plaintiff under the agreement to sell and since such right does not constitute an interest in immoveable property, there was no merger of the tenancy rights of the plaintiff with the right under the agreement to sell, under Section 111(d) of the Transfer of Property Act. Therefore, there was no bar of constructive res judicata to the plaintiff's suit, which was in respect of his rights as tenant and which were not brought to sale. The bar under Section 34 of the Specific Relief Act applies when the plaintiff is entitled to ask for consequential relief but abstains from doing so. As the plaintiff did ask for the consequential relief of possession but the Court found that he was not entitled to it, the bar under Section 34 of the Specific Relief Act did not apply and the plaintiff was therefore entitled to a declaration that the execution sale was void. — Rangarao Ramarao Deshpande v Channappa Basappa Lakshmanahalli , 1974(2) Kar. L.J. 208 : AIR 1975 Kant. 155

TENANT PURCHASING LAND FROM ONE OF MEMBERS OF JOINT FAMILY Lease — Determination of — Tenant of land forming part of joint family property purchasing land from one of members of joint family — Since what he has purchased is only undivided share of member in joint property, he has no right to possession, either exclusive or joint, and consequently there is no merger of interests of lessee and lessor in property in himself — Lease in such case is not determined. Held: Section 111(d) of the Transfer of Property Act provides that lease of immovable property determines in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right. Therefore, it is clear that it is only in case the interest of

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the lessee and the lessor in the whole of the property stands vested at the same time in one person in the same right, there would be determination of lease. In the instant case, where the original tenant has acquired only one-fifth undivided interest of the lessor, it cannot be said that there is determination of the lease. If there is no determination of lease, the agrarian relationship of landlord and tenant continues. In the instant case, both the original tenant as well as his sons did not seek for partition of one-fifth undivided interest in the land and take even symbolic possession of the same. Therefore, the conclusion reached by the Appellate Authority that since the original tenant had purchased one-fifth undivided interest in the land in question from the landlord, the petitioners are not entitied for conferment of occupancy right, is unsustainable in law. The order impugned is liable to be sot aside. — Tukaram Govind Naganvakar (Deceased) by LRs. and A nother v State of Kamataka and Others, 2001(4) Kar. LJ. 505C

LESSEE ENTERING INTO CONTRACT FOR PURCHASE Lessee entering into contract for purchase and entitled to possession under Section 53-A — Lease stands extinguished. — Champalal Bhaktawarmal v Smt. Sumithramma by LRs, 1972(2) Mys. LJ. 242 : AIR 1973 Mys. 110.

For some years prior to 1949 the suit property was let out by plaintiff to defendant and defendant was running a Hotel. On 19-12-1949, plaintiff conveyed the suit property to defendant for Rs. 7,000/- with a covenant

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for re-purchase for the same consideration within ten years of the documents. It is also stipulated that during the period subsequent to reconveyance, defendant should not be dispossessed for the 10 years from the date of the sale and that the defendant should be hi occupation as tenant on the same rent as before. Plaintiff sued for specific performance of agreement for reconveyance. Held.—The transaction of 1949 was a sale and not a mortgage, and it brought about the extinguishment of the previous lease by merger under clause (d) of Section 111 of the T.P. Act. The covenant that during the period between the reconveyance and the expiry of 10 years from the Deed, the defendant should be in occupation as a tenant should be regarded as an agreement by plaintiff to grant a lease on the happening of a future contingency and not as providing for a revival of the previous lease. Further, no deed of reconveyance having been executed within time, the plaintiff was relieved of necessity of granting the lease. Hence plaintiff was entitled under the deed of 1949 to a Deed of reconveyance and to possession — Shankara Rao Rama Rao v Ekiwth Mallappa, RSA No. 360/1963, dated 13-7-1966.

RELINQUISHMENT OF THE LEASE - SURRENDER A letter by the lessee stating that the leased premises had been kept vacant does not amount to relinquishment of the lease — State of Mysore v B.R. Ramoo, 1967(2) Mys. LJ. 625.

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Implied surrender determining lease — Surrender can be implied from act of lessee abandoning possession and that of lessor taking over possession — Doctrine of Estoppel is basis of implied surrender — One of joint tenants vacating premises amounts to implied surrender on his part. Held: Section 111(f) of Transfer of Property Act provides that a lease of immovable property determines by implied surrender. Surrender can be implied from such facts as the relinquishment of possession by the lessee and taking over possession by the lessor. Implied surrender has its basis on the Doctrine of Estoppel. If a tenant abandons or relinquishes possession of the leasehold premises and the landlord acting on the basis of such conduct of the tenant either takes over possession or where the tenant who has abandoned that premises happens to be one of the joint tenants does something to his detriment there would be an implied surrender of the right of such tenant or joint tenant. — Akkatai alias Sujata v Baburao SattappaAngol (dead) by L.Rs. 1995(6) Kar. LJ. 219B. A waiver is an intentional relinquishment of a known right. There could be no waiver unless the person against whom the warver is claimed had full knowledge of his rights and of facts enabling him to take effectual action for the enforcement of such rights. — Associated Hotels of India Limited v S.H. Sardar Ranjit Singh, AIR 1968 SC 933.

AGREEMENT RESERVING RIGHT OF RE-ENTRY TO LANDLORD — RIGHT DOES NOT AUTHORISE BOARD TO FORCIBLY RESUME POSSESSION

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Determination of — By forfeiture — Agreement reserving right of reentry to landlord — Right does not authorise Board to forcibly resume possession — Possession to be resumed either by initiating proceedings under Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974 or by filing suit. Held: The power of re-entry and 'resumption' that is reserved by the Board in the lease-cum-sale agreement, does not authorise the Board to directly or forcibly resume possession of the leased land, on termination of the lease. It only authorises the Board to take possession of the leased land in accordance with law. In this case, that can be either by having recourse to the provisions of the Public Premises Act or by filing a Civil Suit for possession and not otherwise. — M/s. Hanuman Silks and Another v Karnataka Industrial Areas Development Board and Others, 1996(7) Kar. LJ. 277C

MERE ACCEPTANCE OF RENT FOR AND ON BEHALF OF THE LAND LORD WILL NOT CREATE A TENANCY BY HOLDING OVER

The Touring Cinema of Respondent 1 was located on a site, which he obtained under a Lease on 3-1-1979 for 11 months. After the expiry of the lease, he has been paying rent to the son of the owner til] May, 1980. When the renewal of the Cinema Licence was sought for, the owner objected that Respondant 1 had no right to continue in possession. Respondant No.l had filed a suit against the owner and obtained a temporary injunction restraining interference with his possession the District Magistrate granted Renewal of Licence. The same was challenged

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in a Writ Petition. It was held that Respondant No. 1 cannot be said to be in lawful possession of the site within the Rule 6 of the Cinema Rules. The temporary injunction only protected Respondant 1 against unlawful interference by the owner and was not conclusive, much less indicative of the fact that Respondant No.l was holding over or a person in lawful possession of the site. There being no evidence that the owner's son was authorised to receive rents for and on behalf of the owner, nor any evidence that during the term of the written lease, the son was also receiving the rent, mere acceptance of rent for and on behalf of the land lord will not create a tenancy by holding over. — Kanthamma v S.A. Sudarshan and Another, 1981(2) Kar. L.J. 249.

LEASE CONSISTING OF AGRICULTURAL LAND AS ALSO HOMESTEAD. Main lease consisting of Agricultural land as also homestead. When Sub lease of homestead only is made all such sub-leases are Agricultural leases. The question should not be reopened even though the correctness of the view is open to question. The rule that where terms of Statutes or ordinance are clear then even a long and uniform course judicial interpretation of it may be over ruled, if it is contrary to clear meaning of enactment, is in applicable to decisions on the basis of which titles and transactions must have been founded. — Nirshi Dhobin and A nother v Dr. Sudhir Kumar Mukherjee and Others, AIR 1969 SC 864.

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ILLUSTRATIONS IN T.P ACT (a)

A, the lessor, gives B, the lessee, notice to quit the property leased.

The notice expires. B tenders and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice is waived. (b)

A, the lessor, gives B, the lessee, notice to quit the property leased.

The notice expires, and 6 remains in possession. A gives to B as lessee a second notice to quit. The first notice is waived. (c)

A lets a house to B for 5 years. B underlets the house to C at a

monthly rent of Rs. WO/-. The 5 years expire, but C continues in possession of the house and pays the rent to A. C's lease is renewed from month to month. (d)

A lets a farm to B for the life of C. C dies,,but B continues in

possession with A's assent. B's lease is renewed from year to year.

DR. K.A.DHAIRYAWAN & OTHERS VS R.THAKUR & OTHERS - AIR 1958 SC 789 and in the case of SILAMBANI SRI CHIDAMBARA VINAYAGAR DEVASTHANAM, DEVAKOTTAI THROUGH ITS TRUSTEES VS DURAISAMY NADAR & ANOTHER - (1967)2 MLJ 181, to contend that the lessee, in the absence of the contract to the contrary is the owner of the building put up by him while the lessor continues to be owner of the land and that the distinct ownership one in the land and another in the building has been recognized. He further points out by referring to the decision in the case

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of BISHAN DAS & OTHERS VS STATE OF PUNJAB & OTHERS - AIR 1961 SC 1570, that constructions put up by persons who are not the owners can be removed by procedure known to law and the State to which the land belongs cannot be said to have acquired rights over the buildings by reason of they being the owners of the land belonging to the State.

MORTGAGOR, MORTGAGEE, TENANT AND LANDLORD RELATIONSHIPS UNDER LAW Carona Shop Co. v. K.C. Bhaskaran Nair AIR 1989 SC 1110

Their

Lordships of the Supreme Court in the said case propounded that under mortgage deed mortgagee was not entitled to induct tenants who would continue beyond the term of existence of mortgage or who would be given rights even after expiry of mortgage. As no landlord and tenant relationship existed between tenant and mortgagor, tenant was not entitled to protection of Rent Act. In Sahadu Bala Botre v. Namdeo Bapuji AIR 1996 SC 1658. Landlord was mortgagor and the tenant was mortgagee hence it was held that on redemption tenancy rights sprang up and the tenant could not be dispossessed physically. In Mangru v. Taraknathji AIR 1967 SC 1390 the question was whether mortgagor in possession had power to leave the mortgage property, it was held that the said question must be determined with reference to the authority of the Mortgagor. Chertyan Sosamma v. Sundaressan Pillai S. Amma AIR 1999 SC 947 was the case where lease existed in favour of the husband of mortgagee. It was

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held that after redemption tenancy will survive as husband and wife are one. In Nemichand v. Onkar Lal AIR 1991 SC 2046, the mortgagee was existing tenant. The question in the case reported in AIR 1997 SC 208 was as to whether the mortgagee became tenant under the provisions of Kerala Land Reforms Act. Hence in the facts and circumstances of the case no physical possession was handed over on redemption. Dev Raj Dogra v. Gyan Chand Jain AIR 1981 SC 981 was the case related to mortgagor's tenants.

In M/s Medan and Co. Versus Wazir Jaivir Chand AIR 1989 SC 630, Apex Court has held as under :- "All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgment due or otherwise) containing the tenant‟s correct address. Once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee u/Sec. 27 of the General Clauses Act. Under the rules of the post office, the letter is to be delivered to the addressee or a person authorised by him. Such a person may either accept the letter or decline to accept it. In either case, there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by, the addressee. In this situation, we have to choose the more reasonable, effective, equitable and practical interpretation and that would be to read the words "served" as "sent by post", correctly and properly addressed to the tenant, and the words "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter. No other

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interpretation, we think, will fit the situation as it is simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by, the tenant." Har Charan vs. Shiv Rani AIR 1981 SC 1284, "Section 27 of the General Clauses Act, 1897 deals with the topic-„Meaning of service by post‟ and says that where any Central Act or Regulation authorises or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting it by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. The Section, thus arises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, pre-paying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgment due is received from the addressee or not. It is obvious that when the section raises the presumption that the service shall be deemed to have been effected it means the addressee to whom the communication is sent must be taken to have known the contents of the documents sought to be served upon him without anything more. Similar presumption is raised under illustration (f) to section 114 of the Indian Evidence Act whereunder it is stated that the court may presume that the common course of business has been followed in a particular case." PRINCIPLES TO BE FOLLOWED WHILE DEALING WITH THE SUITS FOR EJECTMENT

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THE HON'BLE MR. JUSTICE J.R. MIDHA of HIGH COURT OF DELHI in the case of Sky Land International Pvt. Ltd vs Kavita P Lalwani Decided on 25 May, 2012 After referring SC and DHC decisions deduced Principles to be followed while dealing with the suits for ejectment in the following manner:"26. From the analysis of the above decisions and provisions with which we are concerned, the following principles emerge. 26.1 Upon expiry of the term of the lease or on termination of the monthly lease by a notice to quit, the lessee must vacate the property on his own and not wait for the lessor to bring a suit where he can raise all kinds of contests in order to profit from Court delays. 26.2 Expiry of lease by efflux of time results in the determination of the relationship between the lessor and the lessee and no notice of determination of the lease is required. Mere acceptance of rent by the landlord from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer on the erstwhile tenant the status of a tenant or a right to be in possession. 26.3 Notice of termination of lease under Section 106 of the Transfer of Property Act sent by registered post to the tenant is deemed to be served under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872. 26.4 The object of the termination notice under Section 106 of the Transfer of Property Act is to communicate the intention of the landlord that he wants the premises back and to give 15 days‟ time to vacate. Such notice is not a pleading but a mere communication of the intention of the

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recipient. Such notice is to be liberally construed as the tenant‟s only right is to get notice of 15 days to vacate. The tenant is under a statutory obligation to vacate the subject property on the expiry of 15 days of the notice. 26.5 A suit for ejectment is different from a title suit for possession against a trespasser. In a suit for possession against a trespasser, title can be in dispute but in a suit for ejectment against an erstwhile tenant, ordinarily there is no dispute of title as the tenant is estopped from denying the landlord‟s title under Section 116 of the Indian Evidence Act. The dispute is generally on two counts; one, about the assent to continue after the expiry of the fixed term lease by efflux of time and second, about the valid termination in case of monthly lease. The tenant resisting the claim for possession has to plead with sufficiently detailed pleadings, particulars and documents why he must not be ejected and what right he has to continue in possession. There is really nothing else to be tried in such a suit. A suit of this nature can ordinarily be decided on first hearing itself either on the pleadings and the documents or, if need be, by examining the parties under Order X of the Code of Civil Procedure or Section 165 of the Indian Evidence Act. 26.6 A suit for ejectment of a lessee is not a type of a case where by forging a postal receipt and falsely claiming the issue of the notice to quit, the plaintiff would gain any particular advantage for he could have always served a notice and filed a suit three weeks later. On the other hand, by serving a self-serving denial, the defendant seeks to get an advantage of dragging the proceedings and continuing to enjoy the property without having to pay the current market rent. Having regard to the common course of natural events, human conduct and probabilities, if a notice

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which can be issued and served again without loss of opportunity, the probability that a person would file a fake proof of sending is nil. On the other hand, if a notice is of a type which had to be served prior to an event that has already occurred, and by its very nature cannot be remedied by a fresh notice, there may be a possibility of it being faked such as a notice exercising the option to renew lease before its expiry. In that case, the Court will look at it differently. 26.7 The pleadings are the foundation of litigation and must set-forth sufficient factual details. Experience has shown that all kinds of pleadings are introduced and even false and fabricated documents are filed in civil cases because there is an inherent profit in continuation of possession. In a suit for ejectment, it is necessary for the defendant to plead specifically as to the basis on which he is claiming a right to continue in possession. A defendant has to show a subsisting right to continue as a lessee. No issue arises on vague pleadings. A vague denial of the receipt of a notice to quit is not sufficient to raise an issue. To rebut the presumption of service of a notice to quit, the defendant has to plead material particulars in the written statement such as where after receiving the plaint and the documents, the defendant has checked-up with the Post-Office and has obtained a certificate that the postal receipt filed by the plaintiff was forged and was not issued by the concerned Post Office. 26.8 A self-serving denial by the defendant and more so in these types of cases, cannot hold back the Court from exercising its jurisdiction to decree a suit under Order XII Rule 6 of the Code of Civil Procedure. Raising a plea of non-receipt of notice to quit and seeking an issue on it is obviously to drag on the litigation and keep on holding to the suit property without having to pay the current market rentals, is not sufficient to raise an issue and, therefore, liable to be rejected.

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26.9 If such a plea of denial of notice is treated as sufficient to non-suit the plaintiff, the plaintiff will have serve a fresh notice to quit and then bring a fresh suit where again the defendant would deny the receipt of notice to seek an issue and trial. The process would go on repeating itself with another notice, in fact, repeat ad-infinitum and in this manner, the defendant will be able to effectively stay indefinitely till the plaintiff settles with him for a price. The Court cannot remain a silent spectator and allow the abuse of process of law. The eyes of the Courts are wide enough to see the truth and do justice so that the faith of the people in the institution of Courts is not lost. 26.10 In view the amendment brought about to Section 106 of the Transfer of Property Act by Act 3 of 2003, no objection with regard to termination of tenancy is permitted on the ground that the legal notice did not validly terminate the tenancy by a notice ending with the expiry of the tenancy month, as long as a period of 15 days was otherwise given to the tenant to vacate the property. The intention of Legislature is therefore clear that technical objections should not be permitted to defeat the decree for possession of tenanted premises once the tenant has a period of 15 days for vacating the tenanted premises. 26.11 A suit for possession cannot be dismissed on the ground of invalidity of notice of termination because the tenant is only entitled to a reasonable time of 15 days to vacate the property. Therefore, even if the notice of termination is held to be invalid, service of summons of the suit for possession can be taken as notice under Section 106 of the Transfer of Property Act read with Order VII Rule 7 of the Code of Civil Procedure but in that event the landlord would be entitled to mesne profits after the

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expiry of 15 days from the date of the receipt of summons and not from the date of notice of termination. 26.12 The purpose of Order XII Rule 6 CPC is to give the plaintiff a right to speedy judgment. The thrust of amendment of Order XII Rule 6 is that in an appropriate case a party on the admission of the other party can press for judgment as a matter of legal right. If a dishonest litigant is permitted to delay the judgment on the ground that he would show during the trial that he had not received the notice, the very purpose of the amendment would be frustrated. 26.13 Under Section 116 of the Indian Evidence Act, the lessee is estopped from denying the title of the transferee landlord. Section 116 of the Indian Evidence Act provides that no tenant of immovable property shall, during the continuance of the tenancy, be permitted to deny the title of the landlord meaning thereby that so long as the tenant has not surrendered the possession, he cannot dispute the title of the landlord. Howsoever, defective the title of the landlord may be, a tenant is not permitted to dispute the same unless he has surrendered the possession of his landlord. 26.14 A lease of an immovable property is determined by forfeiture in case the lessee renounces his character by setting up a title in a third person. The effect of such a disclaimer is that it brings to an end the relationship of landlord and tenant and such a tenant cannot continue in possession. Section 111(g)(2) of Transfer of Property Act, 1882 is based on public policy and the principle of estoppel.

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26.15 There is a flood of litigation unnecessarily burdening the Courts only because obdurate tenants refuse to vacate the tenanted premises even after their tenancy period expires by efflux of time or the monthly tenancy has been brought to an end by service of a notice under Section 106 of Transfer of Property Act, 1882. It has become quite common for the tenants whose tenancy has been terminated to continue the occupation to drive the landlords to file suits for possession and mesne profits and thereafter raise false claims and defences to continue the possession of the premises. The motivation of the tenant to litigate with the landlord is that he wants to continue the occupation on payment of rent fixed years ago. The continuation of possession in such cases should therefore be permitted upon payment of market rent. In that case, inherent intent of the unscrupulous tenant to continue frivolous litigation would be reduced to a large extent. 26.16 In all proceedings relating to possession of an immovable property against an erstwhile tenant, the Court should broadly take into consideration the prevailing market rentals in the locality for similar premises and fix adhoc amount which the person continuing in possession must pay or deposit as security. If such amount, as may be fixed by the Court, is not paid or deposited as security, the Court may remove the person and appoint a receiver of the property or strike out the claim or defence. This is a very important exercise for balancing equities. The Courts must carry out this exercise with extreme care and caution while keeping pragmatic realities in mind. This is the requirement of equity and justice. 26.17 In the last 40 years, a new creed of litigants have cropped up who do not have any respect for truth. They shamelessly resort to falsehood

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and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the Courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final. 26.18 False claims and defences are serious problems with real estate litigation, predominantly because of ever escalating prices of the real estate. Litigation pertaining to valuable real estate properties is dragged on by unscrupulous litigants in the hope that the other party will tire out and ultimately would settle with them by paying a huge amount. This happens because of the enormous delay in adjudication of cases in our Courts. If pragmatic approach is adopted, then this problem can be minimized to a large extent. 26.19 Certain tenants, in this country, consider it an inherent right not to vacate the premises even after either expiry of tenancy period by efflux of time or after their tenancy is terminated by means of a notice under Section 106 of Transfer of Property Act, 1882. Such tenants feel that they ought to vacate the tenanted premises only when the Courts pass a decree for possession against them. The tenants who illegally continue to occupy the tenanted premises by raising frivolous defences should be appropriately burdened with penal costs. 26.20 Dishonest and unnecessary litigations are a huge strain on the judicial system. The Courts are continued to be flooded with litigation with false and incoherent pleas and tainted evidence led by the parties. The judicial system in the country is choked and such litigants are

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consuming courts„ time for a wrong cause. Efforts are made by the parties to steal a march over their rivals by resorting to false and incoherent statements made before the Court. 26.21 Truth should be the guiding star in the entire judicial process and it must be the endeavour of the court to ascertain the truth in every matter. Truth is the foundation of justice. Section 165 casts a duty on the Judge to discover truth to do complete justice and empowers him to summon and examine or recall and re- examine any such person if his evidence appears to be essential to the just decision of the case. The Judge has to play an active role to discover the truth. He is expected, and indeed it is his duty, to explore all avenues open to him in order to discover the truth and, to that end, question witnesses on points which the lawyers for the parties have either overlooked or left obscure or willfully avoided. The Court can also invoke Section 30 of the Code of Civil Procedure to ascertain the truth. 26.22 Unless the Courts ensure that wrongdoers are denied profit or undue benefit from the frivolous litigation, it would be difficult to control frivolous and uncalled for litigations. In order to curb uncalled for and frivolous litigation, the Courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that the Courts‟ scarce and valuable time is consumed or more appropriately wasted in a large number of uncalled for cases. It becomes the duty of the Courts to see that such wrong doers are discouraged at every step and even if they succeed in prolonging the litigation, ultimately they must suffer the costs. Despite settled legal positions, the obvious wrong doers, use one after another tier of judicial review mechanism as a gamble, knowing fully well that the dice is always loaded in their favour, since

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even if they lose, the time gained is the real gain. This situation must be redeemed by the Courts. 26.23 Imposition of actual, realistic or proper costs and or ordering prosecution would go a long way in controlling the tendency of introducing false pleadings and forged and fabricated documents by the litigants. The cost should be equal to the benefits derived by the litigants, and the harm and deprivation suffered by the rightful person so as to check the frivolous litigations and prevent the people from reaping a rich harvest of illegal acts through Court. The costs imposed by the Courts must be the real costs equal to the deprivation suffered by the rightful person and also considering how long they have compelled the other side to contest and defend the litigation in various courts. In appropriate cases, the Courts may consider ordering prosecution otherwise it may not be possible to maintain purity and sanctity of judicial proceedings. The parties raise fanciful claims and contests because the Courts are reluctant to order prosecution." REFERRED DECISIONS A status of a „tenant at sufferance‟ has been explained by the Supreme Court in R.V. Bhupal Prasad v. State of Andhra Pradesh, AIR 1996 SC 140. The Court held as under:- "8. Tenant at sufferance is one who comes into possession of land by lawful title, but who holds it by wrong after the termination of the term or expiry of the lease by efflux of time. The tenant at sufferance is, therefore, one who wrongfully continues in possession after the extinction of a lawful title. There is little difference between him and a trespasser. In Mulla's Transfer of Property Act, (7th Edn.) at page 633, the position of tenancy at sufferance has been stated thus : A tenancy

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at sufferance is merely a fiction to avoid continuance in possession operating as a trespass. It has been described as the least and lowest interest which can subsist in reality. It, therefore, cannot be created by contract and arises only by implication of law when a person who has been in possession under a lawful title continues in possession after that title has been determined, without the consent of the person entitled. A tenancy at sufferance does not create the relationship of landlord and tenant. At page 769, it is stated regarding the right of a tenant holding over thus : The act of holding over after the expiration of the term does not necessarily create a tenancy of any kind. If the lessee remaining in possession after the determination of the term, the common law rule is that he is a tenant on sufferance. The expression "holding over" is used in the sense of retaining possession. A distinction should be drawn between a tenant continuing in possession after the determination of the lease, without the consent of the landlord and a tenant doing so with the landlord's consent. The former is called a tenant by sufferance in the language of the English law and the latter class of tenants is called a tenant holding over or a tenant at will. The lessee RFA No.697/2010 Page 7 of 96 holding over with the consent of the lessor is in a better position than a mere tenant at will. The tenancy on sufferance is converted into a tenancy at will by the assent of the landlord, but the relationship of the landlord and tenant is not established until the rent was paid and accepted. The assent of the landlord to the continuance of the tenancy after the determination of the tenancy would create a new tenancy. The possession of a tenant who has ceased to be a tenant is protected by law. Although he may not have a right to continue in possession after the termination of the tenancy, his possession is juridical." "13. In view of the settled position of law, the possession of the appellant is as tenant at sufferance and is liable to ejectment in due course of law. But his

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possession is not legal nor lawful. In other words, his possession of the theatre is unlawful or litigious possession. The appellant may remain in possession until he is ejected in due course in execution of the decree in the suit filed by the respondent. His possession cannot be considered to be settled possession. He is akin to a trespasser, though initially he had lawful entry." In M/s. Raptakos Brett & Co. Ltd. v. Ganesh Property, AIR 1998 SC 3085, the Supreme Court held that when a lease comes to an end by efflux of time, or by notice of termination, or if there be a breach and the lessee's rights are forfeited, the lessee becomes a tenant at sufferance, and it becomes the duty of the lessee under Section 108(q) of the Transfer of Property Act to restore possession to the lessor forthwith. The Supreme Court held as under:- "22. ...Under law the erstwhile landlord is entitled to restoration of possession by enforcement of statutory obligation of the erstwhile tenant as statutorily imposed on him under Section 108(q) read with Section 111(a) of the Property Act..." In C. Albert Morris v. K. Chandrasekaran, (2006) 1 SCC 228, the Supreme Court held as under:- "26. ...Much argument was advanced on the receipt of the rent by the landlord after the cancellation of the lease. The consensus of judicial opinion in this country is that a mere continuance in occupation of the demised premises after the expiry of the lease, notwithstanding the receipt of an amount by the quondam landlord, would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in possession..." "32. ...We are, therefore, of the opinion that mere acceptance of rent by the landlord, the first respondent herein, from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a

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tenancy so as to confer on the erstwhile tenant the status of a tenant or a right to be in possession...” In Delhi Jal Board v. Surendra P. Malik, 104 (2003) DLT 151 (DB), the Division Bench of Delhi High Court held as under:- "12. It is no longer a grey area that where a tenancy had otherwise expired by efflux of time but the tenant continued in possession of the premises, mere acceptance of rent by the landlord could neither renew the tenancy nor create a new one. That is so because such subsequent occupation of premises was not in pursuance of any contract, express or implied between the parties..." "13. ... In any case, this aspect does not assume any importance as no notice under Section 106 was required to be served on appellant due to the expiry of the Lease between the parties by efflux of time..."

In Usha Rani Jain v. Nirulas Corner House Private Limited, ILR (2005) II Delhi 349, Delhi High Court held as under:- "17. Though a plea was taken in the written statement about non determination of the lease because no notice to quit as envisaged under Section 106 of the Transfer of Property Act has been served on the defendants before filing of the present suit, but this aspect was not pressed at the hearing. Even otherwise, it is a well settled proposition of law that when the term of the lease has expired by efflux of time, there is no need for a landlord to determine the lease by serving quit notice...”

In Inmacs Limited v. Prema Sinha, 153 (2008) DLT 311 (DB), the Division Bench of Delhi High Court held as under:- "13. ...If a lease is evidence by a contract, as in the instant case, the duration of the lease would be as per

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the contract and at the expiry of the lease period as per contract the lease expires by efflux of time. Expiry of lease by efflux of time results in the determination of the relationship between the lessor and the lessee and since the lease expires under the contract by efflux of time, no notice of determination of the lease is required.” In Ashok Chopra v. Syndicate Bank, 169 (2010) DLT 361, Delhi High Court held as under:- "17. It is clear that the tenancy had come to an end by a efflux of time. Admittedly, there was no document executed between the parties renewing the lease. Tenancy having expired by efflux of time; no notice was required to terminate the lease; ..." In Nopany Investments (P) Ltd. v. Santokh Singh (HUF), 2008 (2) SCC 728, the Supreme Court held that filing of suit is itself a notice to quit on the tenant and therefore, no notice to quit under Section 106 of the Transfer of Property Act is necessary to enable the landlord to get the decree of possession. The observations of the Supreme Court are reproduced hereunder:―In any view of the matter, it is well settled that filing of an eviction suit under the general law itself is a notice to quit on the tenant. Therefore, we have no hesitation to hold that no notice to quit was necessary under Section 106 of the Transfer of Property Act in order to enable the respondent to get a decree of eviction against the appellant.‖

In Shri Ram Pasricha v. Jagannath, AIR 1976 SC 2335, the Supreme Court held that in a suit for eviction, the

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tenant is estopped from questioning the title of landlord. The Supreme Court held as under:"15. ...The tenant in such a suit is estopped from questioning the title of the landlord under Section 116 of the Evidence Act. The tenant cannot deny that the landlord had title to the premises at the commencement of the tenancy. Under the general law, in a suit between landlord and tenant, the question of title to the leased property is irrelevant. It is, therefore, inconceivable to throw out the suit on account of non-pleading of other co-owners as such." In D. Satyanarayana v. P. Jagadish, AIR 1987 SC 2192, the Supreme Court held as under:"3. ...Section 116 of the Evidence Act provides that no tenant of immovable property shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property. Possession and permission being established, estoppel would bind the tenant during the continuance of the tenancy and until he surrenders his possession. The words RFA No.697/2010 Page 38 of 96 „during the continuance of the tenancy‟ have been interpreted to mean during the continuance of the possession that was received under the tenancy in question, and the Courts have repeatedly laid down that estoppel operates even after the termination of

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the tenancy so that a tenant who had been let into possession, however, defective it may be, so long as he has not openly surrendered possession, cannot dispute the title of the landlord at the commencement of the tenancy..." "4. The rule of estoppel embodied under Section 116 of the Evidence Act is that, a tenant who has been let into possession cannot deny his landlord's title, however defective it may be, so long as he has not openly restored possession by surrender to his landlord..." In Vashu Deo v. Balkishan, (2002) 1 SCR 171, the Supreme Court summed up the law as to estoppel of tenant as under: "6. ...Section 116 of the Evidence Act, which codifies the common law rule of estoppel between landlord and tenant, provides that no tenant of immovable property or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had at the beginning of the tenancy, a title to such immovable property. The rule of estoppel so enacted has three main features : (i) the tenant is estopped from disputing the title of his landlord over the tenancy premises at the beginning of the tenancy; (ii) such estoppel continues to operate so long as the tenancy continues and unless the tenant has surrendered possession to the landlord; and (iii) Section 116 of the Evidence Act is not the whole law of estoppel between the landlord and tenant. The principles emerging from Section 116 can be extended in their application and also suitably adapted to suit the requirement of an RFA No.697/2010 Page 39 of 96 individual case... the rule of estoppel ceases to have applicability once the tenant has been evicted. His obligation to restore possession to his landlord is fulfilled either by actually fulfilling the obligation or by proving his landlord‟s title having been extinguished by a paramount title-holder..."

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In Sheela v. Firm Prahlad Rai Prem Prakash, (2002) 3 SCC 375, the Supreme Court held as under:- "12. ...Section 116 of the Evidence Act embodies therein a rule of estoppel. No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property. This estoppel so long as it binds the tenant excludes the tenant from raising a plea disputing the title of his landlord at the commencement of the tenancy. It flows as a corollary therefrom that the proof of landlord-tenant relationship tantamounts during the continuance of tenancy to proof of ownership of landlord over the tenancy premises at the beginning of the tenancy so far as the tenant is concerned. It is significant to note that on the phraseology of Section 116 of the Evidence Act the rule of estoppel applies so long as the tenancy is not terminated and the rule estops the tenant from laying challenge to the ownership of the landlord at the commencement of the tenancy. But the rule of estoppel as incorporated in Section 116 is not exhaustive and it may be extended or suitably modified in its application to other situations as well, retaining the basic feature of the rule. Clause (g) of Section 111 of the Transfer of Property Act, insofar as relevant for our purpose, provides that a lease of immovable property determines by forfeiture in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself. This provision contemplates two fact situations which entail the lessee having renounced his character as such and they are: (i) when the lessee sets up a title in a third person, or (ii) when he claims title in himself. In either case, the tenant has disputed and denied the title of his landlord because a title in third person or title in himself cannot co-exist with the

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title in the landlord.” …………….. "14. Denial of landlord's title or disclaimer of tenancy, is it an act injurious to interest of landlord? How does this rule operate and what makes it offensive? Evans and Smith state in the Law of Landlord and Tenant (4th Edn., 1993, at p.89) that it is an implied condition of every lease, fixed-term or periodic and formal or informal, that the tenant is not expressly or impliedly to deny the landlord's title or prejudice it by any acts which are inconsistent with the existence of a tenancy. Disclaimer of the landlord's title is analogous to repudiation of a contract. The rule is of feudal origin; the courts are not anxious to extend it and so any breach of this condition must be clear and unambiguous. Hill and Redman in Law of Landlord and Tenant (17th Edn., para 382, at pp. 445-446) dealing with "acts which prejudice lessor's title" state that there is implied in every lease a condition that the lessee shall not do anything that may prejudice the title of the lessor; and that if this is done the lessor may re-enter for breach of this implied condition. Thus, it is a cause of forfeiture if the lessee denies the title of the lessor by alleging that the title of the landlord is in himself or another; or if he assists a stranger to set up an adverse title or delivers the premises to him in order to enable him to set up a title..."

In S. Makhan Singh v. Amarjeet Bali, 154 (2008) DLT 211, this Court held as under:"5. ...Section 111(g) of Transfer of Property Act provides that a lease of immovable properties come to an end by forfeiture in case of lessee renouncing his character as such by setting up a title in a third person or claiming title in himself. Thus, once a lease stands forfeited by operation of law, the

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person in occupation of the premises cannot take benefit of the legal tenancy. This provision under Section 111(g) is based on public policy and the principle of estoppel. A person who takes premises on rent from landlord is estopped from challenging his title or right to let out the premises. If he does so he does at his own peril and law does not recognize such a person as legal tenant in the premises..."

In Bhagirothi Mohanty v. Kasinath Das, 1996 AIHC 4918, the Orissa High Court held as under:"8. Section 116 of the Evidence Act envisages that a tenant is stopped to deny the landlord‟s title. RFA No.697/2010 Page 42 of 96 This doctrine is based on equitable principle inasmuch as once one enters into the premises as a tenant and continues to possess in that capacity, he cannot be heard to deny the lessor‟s title. If he does so, then Section 111(g) of the Transfer of Property Act comes into play. As provided therein, the lessee‟s right to the lease-hold property is forfeited by happening of certain events, one of such events being disclaimer or denial of the lessor‟s title. The „disclaim‟ as the word imports, necessarily means renouncement by the party of his character as a tenant either by setting up title by another or by claimant title in himself. The principle embodied in Section 111(g) is based on the principle of justice, equity and good conscience. So a tenant having lawfully entered into lease-hold premises, if denies landlord's title, his position in relation to the lease-hold land is as a trespasser. In such situation, one of the co- owners can maintain a suit for eviction against him..."

In Maria Margarida Sequeria Fernandes v. Erasmo

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Jack de Sequeria, 2012 (3) SCALE 550, the Supreme Court RFA No.697/2010 Page 43 of 96 held that the person resisting a claim for recovery of possession or claiming a right to continue in possession has to establish that he has such a right. The observations of the Supreme Court are as under:"66. A title suit for possession has two parts - first, adjudication of title, and second, adjudication of possession. If the title dispute is removed and the title is established in one or the other, then, in effect, it becomes a suit for ejectment where the defendant must plead and prove why he must not be ejected. 67. In an action for recovery of possession of immovable property, or for protecting possession thereof, upon the legal title to the property being established, the possession or occupation of the property by a person other than the holder of the legal title will be presumed to have been under and in subordination to the legal title, and it will be for the person resisting a claim for recovery of possession or claiming a right to continue in possession, to establish that he has such a right. To put it differently, wherever pleadings and documents establish title to a particular property and possession is in question, it will be for the person in possession to give sufficiently detailed pleadings, particulars and documents to support his claim in order to continue in possession.‖

In Surjit Sachdev v. Kazakhstan Investment Services Private Limited, 66 (1997) DLT 54 (DB), the Division Bench of this Court held as under:"16. A bare reading of Rule 6 would suggest that Court either on the application of any party or on its own motion and without waiting for

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determination of any other question between the parties proceed RFA No.697/2010 Page 44 of 96 to give judgment as it may think fit having regard to the admission..." "17. ...The factors which deserve to be taken into consideration in order to enable the Court to pass a decree in plaintiff's favor as regards possession in such like suit. are: (a) existence of relationship of Lesser and lessee or entry in possession of the suit property by defendant as a tenant; and (b) determination of such relation in any of the contingency, as envisaged in Section 111 of the Transfer of Property Act. One of the modes stated therein is by efflux of time limited by the lease. Only on unequivocal admission of the above two factors will entitle the plaintiff to a decree on admission. Admission need not be made expressly in the pleadings. Even on constructive admissions Court can proceed to pass a decree in plaintiff's favour. 18. Defendants in this case have not disputed the entry of defendant No. 1 in possession on the suit property on the basis of registered lease deed dated 24.2.1994..."

In Maria Margarida Sequeria Fernandes v. Erasmo Jack de Sequeria, 2012 (3) SCALE 550, the Supreme Court held that false claims and defences are serious problems with real estate litigation, predominantly because of ever escalating prices of the real estate. The Supreme Court held as under:―False claims and false defences 84. False claims and defences are really serious problems with real estate litigation, predominantly because of ever escalating prices of the real estate. Litigation pertaining to valuable real estate properties is dragged

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on by unscrupulous litigants in the hope that the other party will tire out and ultimately would settle with them by paying a huge amount. This happens because of the enormous delay in adjudication of cases in our Courts. If pragmatic approach is adopted, then this problem can be minimized to a large extent."

In Dalip Singh v. State of U.P., (2010) 2 SCC 114, the Supreme Court observed that a new creed of litigants have RFA No.697/2010 Page 51 of 96 cropped up in the last 40 years who do not have any respect for truth and shamelessly resort to falsehood and unethical means for achieving their goals. The observations of the Supreme Court are as under:"1. For many centuries, Indian society cherished two basic values of life i.e., 'Satya' (truth) and 'Ahimsa' (non-violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justice-delivery system which was in vogue in the pre-Independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post- Independence period has seen drastic changes in our value system. The materialism has over shadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings.

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2. In last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final.‖

In Mohammad Ahmad v. Atma Ram Chauhan, (2011) 7 SCC 755, the Supreme Court observed that the motivation of the tenant to litigate with the landlord is that he doesn‟t want to pay the prevalent market rate of rent to the landlord and continues to pay the rent fixed years ago. The observation of the Supreme Court is as under:"1. .... One half of the lis between landlord and tenant would not reach courts, if tenant agrees to pay the present prevalent market rate of rent of the tenanted premises to the landlord. In that case landlord would also be satisfied that he is getting adequate, just and proper return on the property. But the trend in the litigation between landlord and tenant shows otherwise. Tenant is happy in paying the meager amount of rent fixed years ago and landlord continues to find out various grounds under the Rent Acts, to evict him somehow or the other...‖

In Maria Margarida Sequeria Fernandes v. Erasmo Jack de Sequeria 2012 (3) SCALE 550, the Supreme Court held that

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inherent interest to continue frivolous litigation by unscrupulous litigants would be reduced to a large extent, if continuation of possession is permitted upon payment of market rent. The Supreme Court held as under:―Mesne Profits 90. Experience has shown that all kinds of pleadings are introduced and even false and fabricated documents are filed in civil cases because there is an inherent profit in continuation of possession. In a large number of cases, honest litigants suffer and dishonest litigants get undue benefit by grant or refusal of an injunction because the Courts do not critically examine pleadings and documents on record. In case while granting or refusing injunction, the Court properly considers pleadings and documents and takes the pragmatic view and grants appropriate mesne profit, then the inherent interest to continue frivolous litigation by unscrupulous litigants would be reduced to a large extent. 91. The Court while granting injunction should broadly take into consideration the prevailing market rentals in the locality for similar premises. Based on that, the Court should fix adhoc amount which the person continuing in possession must pay and on such payment, the Plaintiff may withdraw after furnishing an undertaking and also making it clear that should the Court pass any order for reimbursement, it will be a charge upon the property. 92. The Court can also direct payment of a particular amount and for a differential, direct furnishing of a security by the person who wishes RFA No.697/2010 Page 55 of 96 to continue in possession. If such amount, as may be fixed by the Court, is not paid as security, the Court may remove the person and appoint a receiver of the property or strike out the claim

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or defence. This is a very important exercise for balancing equities. Courts must carry out this exercise with extreme care and caution while keeping pragmatic realities in mind and make a proper order of granting mesne profit. This is the requirement of equity and justice."

In Indian Council for Enviro and Legal Action v. Union of India, (2011) 8 SCC 161, the Supreme Court explained the concept of restitution. The Court held that it is the bounden duty and obligation of the Court to neutralize any unjust, enrichment and undeserved gain made by any party by invoking the jurisdiction of the Court. A person in a wrongful possession should not only be removed as early as possible but be compelled to pay for wrongful use of the premises, fine, penalty as well as cost. The findings of the Supreme Court in this regard are as under:"149. It is settled principle of law that no one can take advantage of his own wrong. Unless courts disgorge all benefits that a party availed by obstruction or delays or non-compliance, there will always be incentive for non-compliance, and parties are ingenious enough to come up with all kinds of pleas and other tactics to achieve their end because they know that in the end the benefit will remain with them." "162. We may add that restitution and unjust enrichment, along with an overlap, have to be viewed with reference to the two stages i.e. pre-suit and post-suit. In the former case, it becomes a substantive law (or common law) right that the court will consider; but in the latter case, when the parties are before the court and any act/omission, or simply

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passage of time, results in deprivation of one, or unjust enrichment of the other, the jurisdiction of the court to levelise and do justice is independent and must be readily wielded, otherwise it will be allowing the court‟s own process, along with time delay, to do injustice. 163. For this second stage (post-suit), the need for restitution in relation to court proceedings, gives full jurisdiction to the court, to pass appropriate orders that levelise. Only the court has to levelise and not go further into the realm of penalty which will be a separate area for consideration altogether." "191. In consonance with the principles of equity, justice and good conscience Judges should ensure that the legal process is not abused by the litigants in any manner. The court should never permit a litigant to perpetuate illegality by abusing the legal process. It is the bounden duty of the court to ensure that dishonesty and any attempt to abuse the legal process must be effectively curbed and the court must ensure that there is no wrongful, unauthorised or unjust gain for anyone by the abuse of the process of the court. One way to curb this tendency is to impose realistic costs, which the respondent or the defendant has in fact incurred in order to defend himself in the legal proceedings. The courts would be fully justified even imposing punitive costs where legal process has been abused. No one should be permitted to use the judicial process for earning undeserved gains or unjust profits. The court must effectively discourage fraudulent, unscrupulous and dishonest litigation. 192. The court‟s constant endeavour must be to ensure that everyone gets just and fair treatment. The court while rendering justice must adopt a pragmatic approach and in appropriate cases realistic costs and compensation be ordered in order to discourage dishonest litigation. The object and true meaning of the concept of restitution cannot be achieved

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or accomplished unless the courts adopt a pragmatic approach in dealing with the cases." The other aspect which has been dealt with in great detail is to neutralise any unjust enrichment and undeserved gain made by the litigants. While adjudicating, the courts must keep the following principles in view: (1) It is the bounden duty and obligation of the court to neutralise any unjust enrichment and undeserved gain made by any party by invoking the jurisdiction of the court. (2) When a party applies and gets a stay or injunction from the court, it is always at the risk and responsibility of the party applying. An order of stay cannot be presumed to be conferment of additional right upon the litigating party. (3) Unscrupulous litigants be prevented from taking undue advantage by invoking jurisdiction of the court. (4) A person in wrongful possession should not only be removed from that place as early as possible but be compelled to pay for wrongful use of that premises fine, penalty and costs. Any leniency would seriously affect the credibility of the judicial system. (5) No litigant can derive benefit from the mere pendency of a case in a court of law. (6) A party cannot be allowed to take any benefit of his own wrongs. (7) Litigation should not be permitted to turn into a fruitful industry so that the unscrupulous litigants are encouraged to invoke the jurisdiction of the court. (8) The institution of litigation cannot be permitted to confer any advantage on a party by delayed action of courts."

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In A. Shanmugam v. Ariya Kshatriya Rajakula Vamsathu Madalaya Nandhavana Paripalanai Sangam, MANU/SC/0336/2012, the Supreme Court held as under:- RFA No.697/2010 Page 59 of 96 ―RESTITUTION AND MESNE PROFITS 34. Experience reveals that a large number of cases are filed on false claims or evasive pleas are introduced by the defendant to cause delay in the administration of justice and this can be sufficiently taken care of if the Courts adopt realistic approach granting restitution. This Court in the case of Ramrameshwari Devi v. Nirmala Devi, (2011) 8 SCC 249 (of which one of us, Bhandari, J. was the author of the judgment) in paragraph 52 (C, D and G) of the judgment dealt with the aspect of imposition of actual or realistic costs which are equally relevant for this case..." "35. Unless wrongdoers are denied profit or undue benefit from frivolous litigations, it would be difficult to control frivolous and uncalled for litigations...We need to decide cases while keeping pragmatic realities in view. We have to ensure that unscrupulous litigant is not permitted to derive any benefit by abusing the judicial process." "37. False averments of facts and untenable contentions are serious problems faced by our courts. The other problem is that litigants deliberately create confusion by introducing irrelevant and minimally relevant facts and documents. The court cannot reject such claims, defences and pleas at the first look. It may take quite sometime, at times years, before the court is able to see through, discern and reach to the truth. More often than not, they appear attractive at first blush and only on a deeper examination the irrelevance and hollowness of those pleadings and documents come to light. 38. Our courts are usually short of time because of huge pendency of cases and at times the courts arrive at an erroneous conclusion because of false pleas, claims, defences and irrelevant facts. A litigant could deviate from

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the facts which are liable for all the conclusions. In the journey of discovering the truth, at times, this Court, on later stage, but once discovered, it is the duty of the Court to take appropriate remedial and preventive RFA No.697/2010 Page 60 of 96 steps so that no one should derive benefits or advantages by abusing the process of law. The court must effectively discourage fraudulent and dishonest litigants. 39. Now, when we revert to the facts of this case it becomes quite evident that the appellant is guilty of suppressing material facts and introducing false pleas and irrelevant documents. The appellant has also clouded the entire case with pleas which have nothing to do with the main controversy involved in the case."

In Ramrameshwari Devi v. Nirmala Devi, (2011) 8 SCC 249, the Supreme Court has held that the Courts have to take into consideration pragmatic realities and have to be realistic in imposing the costs. The relevant paragraphs of the said judgment are reproduced hereunder:"45. ........We are clearly of the view that unless we ensure that wrongdoers are denied profit or undue benefit from the frivolous litigation, it would be difficult to control frivolous and uncalled for litigations. In order to curb uncalled for and frivolous litigation, the courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that court's otherwise scarce and valuable time is consumed or more appropriately wasted in a large number of uncalled for cases." "52. The main question which arises for our consideration is whether the prevailing delay in civil litigation can be curbed? In our considered opinion the existing system can be drastically changed or improved if the

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following steps are taken by the trial courts while dealing with the civil trials."

Court in Dalip Singh v. State of U.P. and Ors. (2010) 2 SCC 114 The Supreme Court laid down the following principles:"42. On the facts of the present case, following principles emerge: 1. It is the bounden duty of the Court to uphold the truth and do justice. 2. Every litigant is expected to state truth before the law court whether it is pleadings, affidavits or evidence. Dishonest and unscrupulous litigants have no place in law courts. 3. The ultimate object of the judicial proceedings is to discern the truth and do justice. It is imperative that pleadings and all other presentations before the court should be truthful. 4. Once the court discovers falsehood, concealment, distortion, obstruction or confusion in pleadings and documents, the court should in addition to full restitution impose appropriate costs. The court must ensure that there is no incentive for wrong doer in the temple of justice. Truth is the foundation of justice and it has to be the common endeavour of all to uphold the truth RFA No.697/2010 Page 76 of 96 and no one should be permitted to pollute the stream of justice.

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5. It is the bounden obligation of the Court to neutralize any unjust and/or undeserved benefit or advantage obtained by abusing the judicial process. 6. Watchman, caretaker or a servant employed to look after the property can never acquire interest in the property irrespective of his long possession. The watchman, caretaker or a servant is under an obligation to hand over the possession forthwith on demand. According to the principles of justice, equity and good conscience, Courts are not justified in protecting the possession of a watchman, caretaker or servant who was only allowed to live into the premises to look after the same. 7. The watchman, caretaker or agent holds the property of the principal only on behalf the principal. He acquires no right or interest whatsoever in such property irrespective of his long stay or possession. 8. The protection of the Court can be granted or extended to the person who has valid subsisting rent agreement, lease agreement or licence agreement in his favour."

HON'BLE MR. JUSTICE A.K. PATHAK of HIGH COURT OF DELHI in the case of Jai Bhagwan Mittal vs Meena Jain And Anr Decided on 25 February, 2013 In Parivar Seva Sansthan vs. Veena Kalra AIR 2000 Delhi 349 a Division Bench of this Court has held that the use of the expression "any stage" in the said rule itself shows that the legislature‟s intent is to give it widest

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possible meaning. Thus merely because issues are framed cannot by itself deter the Court to pass the judgment on admission under Order 12 Rule 6 CPC. In Uttam Singh Duggal & Co. Ltd. versus United Bank of India & Others (2000) 7 SCC 120, in the context of Order 12 Rule 6 of the Code, Supreme Court has held thus "the object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled. We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where the other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which it is impossible for the party making such admission to succeed."

GUIDELINES ISSUED TO REDUCE LANDLORD-TENANT LITIGATION JUSTICE DALVEER BHANDARI & JUSTICE DEEPAK VERMA OF SUPREME COURT OF INDIA IN Mohammad Ahmad & Anr. Vs. Atma Ram Chauhan & Ors (2011) 7 SCC 755 Issued GUIDELINES AND NORMS FOR TENANCY AND EVICTION LITIGATIONS, SO AS TO MINIMIZE LANDLORD-TENANT LITIGATION AT ALL LEVELS. (i) The tenant must enhance the rent according to the terms of the agreement or at least by ten percent, after every three years and enhanced rent should then be made payable to the landlord. If the rent is too low (in comparison to market rent), having been fixed almost 20 to 25 years back then the present market rate should be worked out either on the basis of valuation report or reliable estimates of building rentals in the surrounding areas, let out on rent recently.

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(ii) Apart from the rental, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing would be deductible. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only. (iii) The usual maintenance of the premises, except major repairs would be carried out by the tenant only and the same would not be reimbursable by the landlord. (iv)But if any major repairs are required to be carried out then in that case only after obtaining permission from the landlord in writing, the same shall be carried out and modalities with regard to adjustment of the amount spent thereon, would have to be worked out between the parties. (v) If present and prevalent market rent assessed and fixed between the parties is paid by the tenant then landlord shall not be entitled to bring any action for his eviction against such a tenant at least for a period of 5 years. Thus for a period of 5 years the tenant shall enjoy immunity from being evicted from the premises. (vi) The parties shall be at liberty to get the rental fixed by the official valuer or by any other agency, having expertise in the matter. (vii) The rent so fixed should be just, proper and adequate, keeping in mind, location, type of construction, accessibility with the main road, parking space facilities available therein etc. Care ought to be taken that it does not end up being a bonanza for the landlord.

DEMOLISHING OF TENANCY PREMISES LEASE RIGHTS DOES NOT END

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(2003) 5 Supreme Court Cases 150, T.Lakshmipathi and Others vs. P.Nithyananda Reddy and Others. Paragraphs 20 to 23 which was emphasized is usefully extracted here under: "20. The tenancy cannot be said to have been determined by attracting applicability of the doctrine of frustration consequent upon demolishing of the tenancy premises. Doctrine of frustration belongs to the realm of law of contracts; it does not apply to a transaction where not only a privity of contact but a privity of estate has also been created inasmuch as lease is the transfer of an interest in immovable property within the meaning of Section 5 of the Transfer of Property Act (wherein the phrase "the transfer of property" has been defined), read with Section 105, which defines a lease of immovable property as a transfer of a right to enjoy such property.

CASES ON LEASES OF IMMOVABLE PROPERTY http://sbn-caselaw.blogspot.com/2007/05/cases-on-leases-ofimmovable-property.html

DIFFERENCE BETWEEN LEASE AND LICENCE Whether particular agreement creates lease or licence has to be gathered from circumstances of agreement - Party claiming benefit of lease has to prove existence of lease - Annual auctioning of right to run hotel in premises at bus stand belonging to Village Panchayat - Agreement between Panchayat and successful bidder in auction - Agreement creates

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no lease but only licence. Held: There is a very clear and distinct distinction in law between the concept of tenancy and that of a licence. It is true that in certain cases an arrangement between parties regardless of what it is called or defined has been construed by a Court to be one that confers tenancy rights particularly in cases where the person has been in occupation for a long period of time. Various circumstances attendant in each of such cases must unmistakably indicate that the contract was one of tenancy arid that in order to deprive the occupant of the benefits and protection of the statute, the document was given a different colour. The first essential requirement is that these circumstances must be present but more importantly, it is for the party claiming those benefits to aver very specifically that the agreement was one of tenancy and thereafter to establish this to the satisfaction of the Court. The arrangement emanated from the usual auction of conducting rights for a period of one year and therefore even to set up a plea of tenancy would be extremely far-fetched. The agreement only conferred a licence for a period of twelve months and nothing else and further more, what needs to be taken cognizance of is the fact that the agreement and its execution itself are unchallenged. In these circumstances, the petitioner herself would be virtually estopped from even pleading any status other than that of a licensee. Under these circumstances, the respondents who are the authority in-charge of the premises would be justified in removing anybody including the petitioner, if such persons come in the way of the party to whom the contract has been awarded from functioning there. - Smt. Prathima S. Bhat v Uppinangadi Grama Panchayath, Uppinangadi, Puttur Taluk, D.K. and Another, 1995(6) Kar. LJ. 136. The Forest Department held an auction in respect of various items of forest produce and the auction notice required purchasers to comply with

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sales tax and stamp law. The auction agreements were for a period of nine to ten months and the purchasers were merely granted the right to cut and carry away the forest produce. Held, the purchasers did not acquire any interest in the soil but merely a right to cut the forest produce and therefore the agreements were in the nature of licences and not leases so as to attract Article 31 (e) of the (Indian) Stamp Act. A study of the definition of 'immovable property' in Section 3{26) of the General Clauses Act, Section 3 of the Transfer of Property Act, Section 2(6) of the Stamp Act and Section 2(7} of the Sale of Goods Act shows that it is the creation of an interest in immovable property or a right to possess it that distinguishes a lease from a licence. No rights over the earnest deposits made by bidders pending auction were created in favour of the State Government and hence the security deposits were not in the nature of mortgages and the purchasers could not be called upon to pay stamp duty under Section 35(c) of the Stamp Act. - Board of Revenue v A.M. Ansari, AIR 1976 SC1813 Section 105 - Easements Act, 1882, Section 52 - Karnataka Rent Control Act, 1961, Sections 21 and 31 - Lease or licence - Suit for eviction of tenant after termination of tenancy in building exempted from operation of Rent Control Act - Compromise decree under which tenant handed over portion of suit building to landlord and promised to vacate remaining portion before specified date and also agreed to pay "rent" till date of vacating - Agreement under compromise decree, held, did not create fresh lease even though word "rent" is used - Tenant has become licensee Compromise decree can be executed when licensee has breached his promise to vacate suit building - Fresh order of eviction under Section 21 of Rent Control Act - Not necessary even though exemption from operation of Rent Control Act in respect of suit building has since been

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removed. Held.-The decree was passed on 21-4-1984 much prior to 1-71986. (the date on which Section 31 was struck down). If under the terms of the decree the party has agreed to abide by certain conditions and if by those conditions the petitioner has handed over a portion of the suit premises and retains some other portion of the premises, agreeing to pay damages till vacant possession is delivered, it would be difficult to go behind the decree and hold that the petitioner is still a tenant. If the petitioner is not a tenant pursuant to the compromise decree and pursuant to him handing over the possession of a portion of the suit premises, then, it would not be possible to hold that the petitioner retains the remaining portion of the property only as a tenant. Petitioner will undoubtedly be, under the terms of the compromise only a licensee and not a tenant. ... It is the intention of the parties which is the decisive test, notwithstanding the fact that the word 'rent' being used in the compromise decree. If it can be culled out from the decree passed by a Court of competent jurisdiction that the intention of the parties was that the tenant willingly acquiesced to be a licensee rather than a tenant then he will undoubtedly be a licensee and nothing more. In these circumstances the landlord was certainly entitled to execute the decree of a Civil Court. ... In the first execution case, the tenant did not question the jurisdiction of the Court but sought time to deliver vacant possession till 7-1-1991. It is only when the tenant did not deliver vacant possession on 7-1-1991 as agreed by him, the landlord was compelled to file the second execution petition. ... It is difficult to impute an intention to create a fresh lease and that pursuant to the compromise decree there was no intention for the parties to enter into a relationship of landlord and tenant. In the facts and circumstances of the case, it has to be necessarily held that the petitioner was only a licensee pursuant to the compromise decree and

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that such decree is executable. - C.L Seetharam v J.C. Rudra Sharma, 1997(3) Kar. L.J. 37 (DB).

GRANTED ONLY BY A PERSON COMPETENT TO CONTRACT A Lease can be granted only by a person competent to contract and the lessor must have title to the property or authority from the owner of the property. - Lakshman Gidwani v Thimmamma, 1987(2) Kar. L.J. 426.

TENANT AT WILL Even if it is held that a tenant at will has no sure interest or estate, he cannot be evicted without a notice, the duration of which would be depended upon the nature of the lease. In the case of an Agricultural Lease, the notice must expire with the end of the agriculture lease. A tenant at will is none the less a tenant the concept of tenancy at will has reference to duration and interest in the Sand. He is not a tenant at the sweet will and mercy of the landlord.

The status and possession of a

person who was admittedly a tenant of premises covered by local rent restriction Act till date of commencement of a fresh lease, which turns out to be void for want of registration during and at the expiry of the period

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purporting to be reserved by such void lease would be that of a tenant. Such a tenant could only be removed by proper legal proceeding and he is not a licence without interest in the premises and could not be forceably evicted by the landlord entering on the premises and locking the same. Such tenant could defend his possession by a suit seeking a declaration and mandatory injunction. - Biswabani (Private) Limited v Santosh Kurmr, 1979(2) Kar. L.J. Sh. N. 98 (SC). Even if it is held that a tenant at will has no sure interest or estate, he cannot be evicted without notice, the duration of which would be dependent upon the nature of the lease. In the case of an agricultural lease, the notice must expiry with the end of the agricultural lease. A tenant at will is nonetheless a tenant. The concept of tenancy at will has reference to duration and interest in the land. He is not a tenant at the sweet will and mercy of the landlord. Hence, possession of the tenant at will, where notice to quit has not been issued, is not on behalf of the landlord and the landlord cannot to be in khas possession within Section 6 of the Bihar Land Reforms Act. The right to take possession is not khas possession. A tenant at will enters possession with the consent of the landlord and till his tenancy is determined, he is in lawful possession and cannot be styled as a trespasser. - Ramesh Bejoy v Pashupati Rai, 1979(2) Kar. LJ. Sh. N. 97 (SC). Where the lease contained a specific condition that the tenant shall give up possession of the house at the will of the landlord without demur and no definite period was fixed in the lease, the tenancy is one at will. Such tenancy can be determined either by demand to give up possession or by operation of law at the death of the lessor. - Bhimangoud v Golangouda, 1983(1) Kar. LJ. Sh. N. 23.

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A RIGHT TO CARRY ON MINING OPERATION Section 105 - Every interest in Immoveable property or a benefit arising out of land will be immoveable property for the purpose of Section 105 of T.P. Act. A right to carry on mining operation in land to extract a specified mineral and to remove and appropriate it, is a right to enjoy immoveable property within Section 105 of T.P. Act, more so when it is coupled with a right to be in its exclusive has possession for a specified period, - Shri Shri Takeshwar Sio Thakur Jiu v Hari Dass. - 1979(1) Kar. L.J, Sh. N. 71 (SC).

TENANT DIES THE LEGAL REPRESENTATIVE HAS NO HERITABLE RIGHT TO THE TENANCY Houses and Rent - Statutory tenant - termination of tenancy - The legal representative has no right to inherit the tenancy. The relationship of landlord and tenant is regulated by the Provisions of the T.P. Act once since relationship, which is Contractual, is terminated under Section 111 of the T.P. Act, the tenant, if he continued in possession of the premises is called statutory tenant, Since tenancy can be terminated only by having recourse to the Rent Control Act. When the Court passes an order of eviction, the tenancy stands terminated. If subsequently, the tenant dies

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the legal representative has no heritable right to the tenancy Radheshyam Modi v Jadunath Mahapatra, AIR 1991 Ori. 88.

PERPETUAL LEASE

Whether perpetual or for term - Proof - Onus - Though there is no presumption in law against perpetual lease, unambiguous language is required to infer such lease which has effect of depriving owner of his right to enjoy property for ever - Mere fact that lease is for 99 years at uniform fixed rent, with stipulation for renewal under same terms and conditions at option of lessee and fact that lease is binding on heirs, administrators, executors, successors and legatees of both lessor and lessee and further fact that lessee has made constructions on leased property at his own cost, would not raise presumption that lease is perpetual lease - Onus of proving that lease is perpetual is on lessee - In absence of provision for renewal at option of lessee for indefinite length of time and from generation to generation, lease is to be held term lease only with option for renewal for only once. Held: Though there is no presumption against perpetual lease, clear and unambiguous language is required to infer such a lease. If the language is ambiguous, not clear and admits of some doubt, the Court is required to opt for an interpretation rejecting the plea of a perpetual lease. This is necessary because if the Court leans in favour of a perpetual lease in the absence of the language being clear and unambiguous, the effect of such interpretation would be

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to deprive a owner of his right to enjoy the property for ever. There is no presumption in favour of the perpetual lease and the Courts are required to lean against perpetual lease in the absence of stipulations in that behalf being unambiguous or clear. . . . .The lease is for a period of 99 years. Therefore, there cannot be any doubt that when a period of 99 years is fixed in the lease deed, it is a term lease. The renewal, even if done at the option of the lessee, again could be for a term of 99 years only. Whether it be during the original period of Sease or even in the renewed period, the option is given to the lessee to surrender at his discretion. There is no provision in the lease deed which says that the renewal of the lease is for an indefinite period. In the absence of a specific provision in the lease deed providing that the renewal is required to be made at the option of the lessee for an indefinite length of time and from generation to generation, it is not possible to come to the conclusion that merely because the lease provides for a renewal of the term fixed in the lease deed under the same terms and conditions, that renewal is for an indefinite period and the lease is a permanent lease. The lease is only for a term of 99 years; and the option can be exercised to renew the lease only once. .... -Since the lease was for construction of a building and for establishing a Pressing and Ginning Factory, the term of the lease is fixed fairly long and a clause for renewal of the lease also is provided. Therefore, the long term provided in the lease with a renewal clause, cannot be understood as meaning that the lease is a permanent lease. Though the power of transfer or assignment of the lease is reserved to the lessee, the said provision specifically states that the transfer or assignment of leasehold interest of the lessee should not in any way affect the other conditions of the lease. The lease deed also provides that in the event the lessee is required to cut any tree growth in the land leased if the said tree growth becoming an obstruction to make use of the leased land

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for the purpose it was let out, the lessee can cut the trees, but hand over the tree growths to the lessor. This clearly shows that the lessor has reserved substantial interest in the leased premises and he has a right to the tree growths on the leased land in the event of the said tree growths are required to be cut. It is also provided that in the event of lessee vacating the demised land, he is required to deliver wood, stone and tiles used for the construction of the building to the lessor and take only the machineries and zinc sheets. - Channabasappa Gurappa Belagavi and Others u Laxmidas Bapudas Darbar and Another, 1999(1) Kar. L.J. 216A.

LEASE AND AGREEMENT TO GRANT LEASE Payment of advance to owner to make necessary repairs and alterations to buildings - Agreement between parties speaking of present demise in favour of payer of advance - Property to be handed over after repairs and alterations -Mere use of expression "present demise" not decisive for holding it to be lease when demise depended on completion of repairs and alterations in accordance with agreement - Contract is mere executory contract and not lease. Held: The covenants between the parties, it is clear that the possession over the property was to be handed over to the plaintiff after construction of the building with necessary alterations and additions as agreed to between the parties. The said clause also speaks of the present demise in favour of the plaintiff. The question is whether despite use of the words 'present demise', the instrument can be construed as merely executory being in the nature of 'agreement to lease' and not 'lease'. The mere words of present demise as set out in the Document are not decisive for holding it to be a lease

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because in fact the demise is depended on the completion of the building in accordance with the requirement of the plaintiff which was under construction on the date of the execution of the said document. Therefore, the contract entered into by the parties has to be held as a mere executory contract and not one which has created the demise in praesenti. Sheshagiri v Belgaum District Co-operative Bank Limited, Belgaum, 1995(4) Kar. L.J. 403.

LEASE AND LICENCE To ascertain the true intent and import of a document, the document should be read as a whole. The proper function of the preamble is to explain certain facts which are necessary to be explained before the enacting part of the statute can be understood. This would equally apply to a deed or a document. The preamble to the suit agreement show that the plaintiff is the owner and the proprietrix of the industry called the "Saravana Industries", that she has been doing business of manufacture and sale of steel furniture, grits, gates, steel windows, industrial works and fabrications pipe and electrical accessories etc., in the said industry and in the last para of the preamble, it is stated that the plaintiff unable to manage the industry more effectively due to her old age and therefore, she is desirous of hiring out the business with the machinery and tools, etc., to the defendant. The mere fact that the word 'factory' is not introduced but only the words 'hiring out the business with the machinery and tools etc.', are used, does not make the transaction any of the less of making over the factory will all the machineries and the tools etc., for carrying on the business subject to the terms and conditions of

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the agreement that were to follow in the deed. Hiring out the business with the machinery and tools without the entire building including the factory would not carry out the purpose and intention of the parties that the defendant were to carry on the industry which was being carried on by the plaintiff and which she was unable to carry on due to her old age. Reading the suit agreement as a whole, there remain no doubt that it is a lease of the factory along with the tools, machineries, furniture etc., and not merely hiring of the business with the machinery and tools etc. The subject-matter of the suit agreement is not a matter like a shandy place where people are allowed to vend their articles by paying market fee or a cycle stand where a party may keep his bicycle for few hours against payment of certain charges, without having any actual possession of the place or any interest being created in the land on which they transact their business or keep their bicycle. The subject-matter of the transaction between the plaintiff and defendant, in the instant case, is an industrial unit, manufacturing steel article of various kinds and unless the defendant had exclusive possession of the factory premises, the defendant could not carry on the industry of manufacturing various kinds of steel articles he was expected to manufacture. Considering the suit agreement as a whole, there is no doubt that it is a 'lease' and not a 'licence'. - Smt. Sundara Bai Ammal and Others v K.V. Rajagopai and Others, ILR1985 Kar. 1706.

LESSEE IS ENTITLED TO A LIMITED INJUNCTION FROM BEING DISPOSSESSED FORCIBLY OTHERWISE THAN IN ACCORDANCE WITH LAW

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A lessee after the expiry of termination of the lease does not yield up possession - Whether entitled to injunction against forcible dispossession by the lessor otherwise in accordance with the law - whether lessee has right to continue in possession and injunction can be granted. There can be no forcible dispossession of a person who has juridical possession and the landlord can be restrained from resorting to high handed acts aimed at forcible dispossession, otherwise than in accordance with law. No claim to a right to dispossess by the use of force without recourse to procedure in accordance with law is recognised or countenanced by Courts. Such a right in the respondent cannot be recognised regardless of the question whether or not the appellant itself has any subsisting right to remain in possession. The protection that the Court affords is not of the possession Which in the circumstances is litiguous possession and cannot be equated with lawful possession - But a protection against forcible dispossession. The basis of relief is a corollary of the principle that even with the best of title there can be no forcible dispossession.The lessee is entitled to a limited injunction from being dispossessed forcibly otherwise than in accordance with law. - M/s. Patil Exhibitors (Private) Limited v The Corporation of the City of Bangalore, ILR 1985 Kar. 3700 : AIR 1986 Kant 194.

PURCHASE THE PREMISES FROM THE LANDLORD When a tenant agrees to purchase the premises from the landlord it was held that the tenant continue to be a tenant. - Rudrappa by L.Rs. v Danappa Malasiddappa, 1982(1) Kar. L.J. 284.

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VOID LEASE - DEFEND HIS POSSESSION UNDER SECTION 53-A OF T.P. ACT When there is void lease and consequently the lessee is put in possession of the premises it does not become, a tenant under such void lease. He can only defend his possession under Section 53-A of T.P. Act. - Technicians Studio (Private) Limited v Lila Ghosh, 1978(1) Kar. L.J. Sh. N. 9 (DB).

RENEWAL CLAUSE Whenever a lease contains a renewal clause it confers an immediate right to a further extension as the covenant runs with the land and it is exercisable by the lesse at any time after the commence of the lease. - R. Kempraj v M/s. Burton Son and Company Private Limited, AIR 1970 SC 1872, relied on. When the Wakf Board has accorded sanction for leasing the suit property with a clause for renewal for a further period of 20 years at the option of the lessee, no further sanction was required to be obtained from the Wakf Board for renewing the lease. After the coming into force of the Transfer of Property Act, leases of immoveable property are governed by Chap. V of the Transfer of Property Act. Therefore, any principle opposed to the provisions in Chap. V of the Transfer of Property Act cannot be enforced. - Vishvarma Hotels Limited v Anjuman-elmamia and Others, 1982(2) Kar. L.J. 264. A licence in respect of a theatre was renewed on 29-12-1980 in favour of the licensee who was a tenant of the premises. The landlord of the

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premises challenged the renewal in a petition under Article 226 of the Constitution, alleging that the license was not in a lawful possession of the theatre on the date of the renewal. The lease was for 10 years from 10-71970 expiring on 9-7-1980. Under the lease deed option to renew the lease was given to the tenant and the tenant exercised the option by notice, dated 27-2-1980. Even after 9-7-1980 the landlord went on accepting rent. The tenant had made a deposit to be adjusted towards the rent of the last month but the landlord did not so adjust the deposit. HELD, when the tenant exercised the option by notice to the landlord before the expiry of the lease, a fresh lease came into existence. When the deposit was not appropriated by the lessor towards the rents for the last months of the tenancy expiring on 9-7-1980, it showed he had no intention to determine the lease. Further, whereafter the period was over, the lessor went on accepting the rents, it brought into effect a fresh tenancy. A subsequent notice issued in November, 1980 by the landlord determining the tenancy could not set at nought the tenancy which had already come into existence

Manjunath V.R. and Another v M.V.

Veerendra Kumar and Another, 1981(2) Kar. L.J. 147. A Lessee entitled to renewal of lease and in possession after the expiry of the original period with the consent of the owner is a lessee for a renewed period and is not merely holding over. -1964 Mys. LJ. Supp. 112. A tenancy for residence renewed by holding over can only be a month to month tenancy, though the rent reserved was yearly. -- Husensaheb Sayadsaheb Attar v Muktabai and Another, 1962 Mys. LJ, 1000.

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In the case of a tenant holding over, the question whether the renewal of the lease is from year to year or month to month has to be determined with reference to Sections 116 and 106 T.P. Act and where the lease is not one for Agricultural or Manufacturing purpose, it must be deemed to be a lease from month to month. - Bheemappa Hanumanthappa and Another v Nagaraj alias Shivanagappa, 1966(1) Mys. LJ. 664.

Lease during the period when a tenant is holding over, is renewed from month to month, if the lease is not for Agricultural or Manufacturing purposes. - 1959 Mys. LJ. 165.

Lessee in occupation of property after the expiry of Lease, is a tenant holding over. A suit for eviction without notice to quit under Section 116 is not maintainable. Such a tenant does not become a tenant at sufferance on expiry of term under unregistered Lease Deed executed before filing of suit. - Satish Chand Makhan and Others v Govardhan Das Byas and Others, AIR 1984 SC 143.

LEASE OR MORTGAGE - MERGER OF BOTH Where a document is of a composite character disclosing features of both mortgage and lease, it cannot be taken as a lease. The Court will have to find out the predominant intention of the parties viewed from the essential aspects of the transaction. There is one most essential feature

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in a mortgage which is absent in a lease (i.e.) that the property transferred is a security for the repayment of a debt whereas in a lease, it is a transfer of a right to enjoy the property. Where this essential feature of a mortgage is missing, the document is not a mortgage, - Puzikkal Kuttappan v Bhargavi, 1977(1) Kar. L.J. Sh. N. 66 (FB). Where there were many features in the document which were more consistent with a lease than a mortgage the transaction is a lease. Tayawwa v Gangaiviva and Others, 1966(2) Mys. L.J. 560. Usufructory mortgage in favour of lessee already in possession Stipulation in mortgage deed that possession of mortgagee to be treated as a fresn possession and that until payment of mortgage amounts, mortgagee is entitled to continue in possession - Absence of specific recital as to recovery of possession - Whether lessee had surrendered his lease-hold right was the qviestion that arose for consideration - Held, recitals had the effect of putting an end to relationship of lessor and lessee on creation of new relationship of mortgager and mortgagee - Explained. Syed Imdad v R. Ramaswamy, 1989(3) Kar. LJ. 422. Possessory mortgage to tenant effect. Where a possessory mortgage was given to appellant who was in possession as a tenant on 21-5-1953 and it was stipulated that the lease was to exist upto 6-11-1953, the mortgagee was given power to sublet, the mortgagor was to do repairs and the possession was to be under the mortgage deed, and the mortgagee undertook to deliver possession of the property on the expiry of ten years. Held, the appellant had surrendered his tenancy from 7-11-1953 and thereafter the possession was only that of mortgagee and there was no question of the tenancy being kept in abeyance and reviving on expiration

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of the period of mortgage. There cannot be a merger of lease and mortgage in respect of the same property, since neither of them is a higher or lesser interest than the other. _ Shah Mathuradas Maganlal and Company v Nagappa Shankarappa Malaga, AIR 1976 SC 1565. Landlord mortgaged the house to the tenant - Tenant effected improvements - Landlord sold the property to respondent and another Suit for redemption and possession - Contended by the appellants Decision in Regular Appeal in favour of respondents - Challenged in RSA. (1)Whether the leasehold rights of the appellant (mortgagor) got merged in the mortgage? Held.-It is well-settled that there is no question of merger as such of a lease with the mortgagee. In other words, it is not as if lease and mortgage cannot co-exist. This is clear from the decision of the Supreme Court in Gambangi Appalaswamy Naidu and Others v Behara Venkataramanayya Patro and Others, (1984)4 SCC 382 : AIR 1984 SC 1728. (2) Whether the lessee (defendant) impliedly surrendered his lessee's rights for the purpose of taking usufructuary mortgage of the property. Held-The fact that there was no stipulation to pay any interest on the mortgage money; the fact that there was no liability on the part of the defendant to pay rent after the mortgage came into force; the fact that there was no agreement to make any adjustment of payment of rent or interest; the fact that the mortgage period is fixed for about eight years; the fact that, if for some reason, plaintiff was unable to make payment even at the end of eighth year, the defendant was given an opportunity to continue on the land till the amount was paid and other circumstances would unmistakably indicate that the intention of the parties was not to continue the relationship of lessor and lessee as between the mortgagor and mortgagee. In the opinion of this Court, if these circumstances are tested by the guidelines given by the Supreme Court in Gambangi's case,

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the same would unmistakably point to the conclusion that there was an implied surrender of his tenancy on the part of the defendant immediately .before usufructuary mortgage was executed in his favour. Abdulmsoolsab Chamanasab Phaniband v Ruth, 1990(4) Kar. LJ. 382A.

AFTER CONSENT DECREE - RECEIPT OF RENT DID NOT BRING FRESH LEASE Where the tenant was given time till the end of 1957 to hand over possession of the property under a consent decree, and he paid the rent in September, October, November and December, 1957 and mesne profits for January, 1958 and the receipt mentioned that what was received was rent, it was Held that the use of the word rent in respect of January, 1958 did not bring about a fresh lease between the parties. - Habighai Meharalli Bhavnagri v Shivaji Rao D. Jadhav, 1965(2) Mys. L.J. 672.

STATUTORY TENANT

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There is transfer of immovable property in favour of the petitioners. .... The very_instrument is titled as 'Lease Deed' and throughout in the said deed the words 'Lessor' and 'Lessee' are used. The sum of Rs. 6,00,000/paid by the lessees was for five years and eight months and the same was paid in advance instead of paying monthly rent every month. The recitals in the lease deed is binding upon the 3rd respondent as the execution of the said document is not in dispute. Having agreed so, it is not open now for the 3rd respondent to turn round and say that it was not a lease' but 'licence' and such licence was given to the petitioners to run the theatre for and on behalf of him. If really the petitioners were permitted to run the theatre for and on behalf of the 3rd respondent, there was no occasion for the petitioners to pay such huge amount to the 3rd respondent. On the other hand, the 3rd respondent himself would have paid amount to the petitioners for the services rendered by them and the money realised from the sale of tickets would have been taken by the 3rd respondent. The stand taken by the 3rd respondent in this regard is wholly untenable and such a stand is taken to suit his convenience. The 3rd respondent has admitted that the monthly rental of the premises would be Rs. 8,823.52. ... It is no doubt true that the lease deed is not registered and it is void. Nonregistration of lease deed does not take away the relationship of landlord and tenants. Therefore, it is held that the petitioners are statutory tenants under the 3rd respondent and their possession is lawful. . . . Admittedly, the theatre is a non-residential building. The monthly rental of the theatre is Rs. 8,823.52 p.m. for a period of 68 months. Hence, the Karnataka Rent Control Act is not applicable. Therefore, for the eviction of the petitioners, the 3rd respondent has to file a suit for ejection, after determining lease of the premises. .... The petitioners took possession of the theatre by virtue of the lease deed, pursuant to which possession was delivered to them. Thus, they entered into the possession of the theatre lawfully. After the

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expiry of lease period, their continuance in possession will not be unlawful until they are evicted by due process of law as they are the statutory tenants under the provisions of the Karnataka Rent Control Act. In this view of the matter, both the impugned endorsement and the order of the Appellate Authority are bad in law and are liable to be quashed. - R. Sreekanth and Another v The Divisional Commissioner, Bangalore Division, Bangalore and Others, 2003(2) Kar. L.J. 231. When a person remains in possession after termination of tenancy, he becomes statutory tenant. Although he can remain in possession he cannot enforce the terms of original tenancy. - Anand Nivas Private Limited v Anandji Kalyanji's Pedhi and Others, AIR 1965 SC 414. There is a distinction between a tenant continuing in possession after the determination of the term with the assent of the land lord and the tenant doing so sans his consent. The former is a tenant at sufference and the later a tenant holding over. Mere acceptance of amounts equivalent to rent by land lord from a tenant in possession after a lease had been determined, either by efflux of time or by notice to quit, and who enjoys statutory immunity from eviction except on well defined grounds as in the Act. If the tenant asserts that the land lord accepted the rent not as Statutory Tenant but only as a legal rent indicating his assent to the tenants continuing in possession it is for the tenant to establish it. Where he fails to establish it cannot be said that there was holding over by him. Bhaitxmji Lakhamshi v Himdatlal Jamnadas Dani, AIR 1972 SC 819.

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NOTICE TO QUIT a)

A notice to quit must be interpreted not with a desire to find flaws

in it which would render it defective, but it must be construed ut res magis valeat quam pereat. - Bhagabandas Agarwala v Bhagwandas Kanu and Others, AIR 1977 SC 1120 b)

A person in occupation of property under an unregistered but

compulsorily registerable lease does not become a tenant from month to month and a notice terminating the tenancy under Section 106 of the T.P. Act, is not necessary. - H- Mohammad Khan v H.K. Copal Shetty, 1963(2) Mys. L.J. 494. c)

A statutory tenant is not entitled to notice as envisaged by Section

106 if the transfer of property before an action in ejectment is commenced against him under any of the enabling provisions of the relevant rent restriction Act. - Firm Sardarilal Vishwanath v Pritam Singh, 1978(2) Kar. L.J. Sh. N. 25 (SC). d)

Before maintaining a petition for eviction under Section 21(1) of

the Karnataka Rent Control Act, 1961, it is not necessary for the landlord to determine the contractual tenancy by issuing to the tenant a notice under Section 106 of the T.P. Act

Papinayakanahalli Venkanna and

Others v Janadri Venkanna Setty, AIR 1981 Kant. 20 (FB)

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e)

In order to get a decree or order for eviction against a tenant under

any State Rent Control Act, it is not necessary to give a notice under Section 106 of T.P. Act. Determination of a lease in accordance with the Transfer of Property Act is unnecessary and a mere surplusage, because the landlord cannot get eviction of the tenant even after such determination. The tenant continues to be so even thereafter. That being so, making out a case under the Rent Act for eviction of the tenant by itself is sufficient and it is not obligatory to find the proceedings on the basis of the determination of the lease by issue of notice in accordance with Section 106 of T.P. Act Dhanapal Chettair v Yasoda, 1980(1) Kar. L.J. Sh. N. 90 (SC). f)

Ground of Eviction need not be set out in the notice. Reasons

stated in notice does not estop landlord from pleading and proving another reason. Issue of second notice to quit not necessarily waiver of earlier notice. See Kamataka Rent Control Act, Sections 11, 21(d) and 26. Raghavendra v Maratha Co-operative Credit Bank Limited, 1977(1) Kar, L.J. 382. g)

It must be deemed that there is due service of the notice of

termination of a tenancy where the letter is sent by registered post, it being properly addressed, pre-paid and the letter contains the document. The contrary that is required to be proved to take away the presumption is with reference to the four requirements referred to above. It is only to meet the contingency of a person who is to be served with the notice trying to evade it, that the service shall be deemed to have been effected if the four conditions are fulfilled. Section 106 Para 2 does not prescribe that the notice should be sent by registered post; it could also be sent by ordinary post. Where the notice is sent under certificate of posting a

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presumption arises under Section 114, Evidence Act, that there has been due service. If tender or delivery to the party is known as impracticable, it is open to the landlord to adopt the procedure of affixture. -Achamma Thomas v E.R. Fairman, 1969(2) Mys. L.J. 179. h)

Notice by telegram : A notice through counsel by telegram

determining the tenancy complies substantially with Section 106- Aldelli Gurusidappa v Veerabhadrappa, 1975(1) Kar. L.J. Sh. N. 76. i)

Notice terminating tenancy should not be interpreted with

strictness but should receive a liberal interpretation. If the.notice is sufficient to give impression that the tenancy is terminated at the end of the tenancy month, the notice is valid - Cherilal K. Wadhva v R. Chandrasekhariah, 1969(2) Mys. LJ. 564. j)

Person in occupation under an unregistered but compulsorily

registerable lease does not become a tenant from month to month and notice terminating tenancy is not necessary. - V. Ramu v M.V. Venkatappa, 1971(1) Mys. L.J. 443, k)

Possession after expiry of lease under unregistered deed notice to

quit not necessary. - Doddappa alias Sidramappa Nagappa Yatgiri and Others v Basavanneppa Basappa Chinniwalar, 1978(1) Kar. LJ. 414: AIR 1978 Kant. 140. l)

So long as there are words in the notice, justifying the view that the

notice itself determined the tenancy, the mere fact that there is no termination in so many words will not make it any the less a notice under

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Section 106. - Sheshacharya Balacharya Morab v MaUawwa, 1965(1) Mys. LJ. 697. m)

When a suit for eviction and mesne profits was instituted without

giving notice to quit under Section 106 of the Transfer of Property Act against a tenant in occupation of the rented property after expiry of the lease the suit would not be maintainable. Such tenant is a tenant holding over and notice of eviction under Section 106 of the T.P. Act was necessary. It cannot be said that on expiry of the specified period under the unregistered Lease Deed executed before the filing of the suit he became tenant at sufference under Section 111 (a) of the T.P. Act and the suit was maintainable without notice under Section 106 of that Act. Satish Chand Makhan v Govardhan Das Eyas, AIR 1984 SC 143 n)

When the defective notice given by the tenant if accepted by the

landlord, it will determine the tenancy. - Calcutta Credit Corporation Limited and Another v Happy Homes (Private) Limited, AIR 1968 SC 471. o)

When the landlord fails to serve notice under Section 106, it does

not mean that such failure estops him from claiming a decree for eviction of tenant. - Krishanadeo Narayan Aganval v Ram Krishan Rai, AIR 1982 SC 783. p)

When the notice terminating tenancy does not grant longer time

for handing over possession, it does not mean that such failure affects the validity of the termination of the tenancy. - Arjunsa Shidramasa Mirajkar v Ganapatsa Hanmantsa Bakale and Others, 1964(2) Mys. L.J. 164.

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q)

Where the monthly tenancy was according to English calendar a

notice to determine possession on or before 30-11-1967 is valid. Eventhough the quit notice asked the tenant to vacate the house on or before 30-11-1967, the tenant was entitled to remain in possession till the midnight of 30-11-1967 and thereafter vacate it and still comply with the notice to quit. The notice was thus perfectly valid and complied with the requirements of Section 106 of the T.P. Act Peter Paul Coelho and Others v Constance D'Souza and Others, 1979(1) Kar. L.J. 219 : AIR 1980 Kant. 28. r)

When a lease terminates by efflux of time, notice of termination is

not required. See Karnataka Rent Control Act, 1961, Section 31. Raghunandan Prasad Garg v Sreeramiah Setty and Others, 1970(2) Mys. L.J. 250. s)

Where a lease is for a specified term it expires by efflux of time in

view of Section 111(a). Therefore service of a notice under Section 106 is not necessary for termination of lease. - Smt, Shanti Devi v Amal Kumar Banerjee, AIR 1981 SC 1550. t)

A notice which is defective may still determine the tenancy if it is

accepted by the landlord. A notice which complies with the requirements of Section 106 of the Act operates to determine the tenancy, regardless of the fact whether the party is served with the notice or not or whether the party assents thereto or not - Calcutta Credit Corporation Limited v Happy Homes (Private) Limited, AIR 1968 SC 471.

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u)

Once a notice is served terminating the tenancy or showing an

intention to quit on the expiry of the period of the notice, the tenancy is terminated, unless with the consent of the other party to whom the notice is given the tenancy is agreed to be treated as subsisting. - Calcutta Credit Corporation Limited v Happy Homes (Private) Limited, AIR 1968 SC 471. v)

Landlord giving first notice to quit on grounds of arrears of rent

tenant fails to vacate and land lord gives second notice after one year and demands rent for period between 1st and 2nd Notices. In a suit for eviction land lord claims damages for use and occupation for period subsequent to second notice. It was held that the first notice was waived and the land lord had treated the tenancy as subsisting. - Tayabali Jaferbhai Tankiwala v M/s. Ahsan and Compamj, AIR 1971 SC 102.

DENIAL OF TITLE A person cannot be given the benefit of right to continue as a tenant and also contest the title of the landlord at the same time. When the tenant disputes the title of the landlord, irrespective of the technicalities of Section 106 of the T.P. Act, the landlord should be entitled to possession. Rachavva and Another v Kariyappa Siddappa and Another, 1981(1) Kar. L.J. 186.

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The experience shows that in many HRC cases, tenants take up a plea of denying the title of landlords and also set up title in themselves. Ultimately, those contentions are found to be baseless. These pleas are taken up in most cases only to prolong the litigation and as by raising such a plea, the tenant is not going to lose anything. On the contrary, he will gain time. The effect of such contentions is that the proceedings get prolonged. Even after the order of eviction is passed, and sometimes even during the pendency of the eviction proceedings, suits are filed by the tenants claiming title in themselves and denying the title of the landlord and even setting up a title in third parties. In order to curb such ungoing to cost him with the order of eviction and also to see that the objects of the Karnataka Rent Control Act are given effect to, it is necessary to make a provision enabling a landlord to make it a ground for eviction in the event the denial of title of the landlord by the tenant is found to be not bona fide even if such a denial is made in the objection to the eviction petition filed under Section 21(1) of the Karnataka Rent Control Act. Smt. Govindamma v Murugesh Mudaliar and Others, ILR1990 Kar. 2639 (DB)

MANUFACTURING PURPOSE AND LEASE PERIOD To constitute 'manufacture' there must be such transformation in the change out of which a new and different article must emerge having a distrinctive name, character or use. Generally coffee includes coffee powder. When coffee seeds are powdered without adding anything more, the resulting powder cannot be said to be another article with a distinctive name, character or use. The process out of which coffee seeds

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are converted into powder is not 'manufacture'. Where the tenant had taken the premises for grinding coffee seeds into powder and selling them, he cannot be said to be engaged in the manufacture of coffee powder and notice to quit giving 15 days time is sufficient. - Meghraj v Seshagiri Rao B., AIR 1977 Kant. 163 To be understood in popular sense in accordance with meaning in dictionary - Mere running of printing press cannot tantamount to engagement in process of manufacturing. Held: The expression 'manufacturing purpose' as used in Section 106 has to be understood in a popular sense in accordance with the meaning given in the Dictionaries. Therefore, the said expression cannot be construed keeping in view the special definition set out to those expressions in special statutes like Factories Act. According to the Dictionary meaning, the word 'manufacture' implies a change. But every change is not manufacture. For identifying a given change in an article as manufacturing, there must be a transformation, a new and different article must emerge having distinctive name, character or use. Keeping in view the facts of the present case, mere running of a printing press cannot tantamount to an engagement in any process of manufacturing though the process of printing results in some change on the paper surface over which the printing is done. - Virupakshaiah alias Veeraiah v Shivaputrappa Basappa Golappanavar, 1996(5) Kar. L.J. 53B.

A lease of premises for carrying on business of retreading of tyres is not a lease for a manufacturing purpose, within Section 106 of the Transfer of Property Act. The broad test for determining whether a process is

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manufacturing process if whether it brings out a complete transformation for the old components so as to produce a commercially different article or commodity. Retreading process does not cause the old tyres to lose its original character. Definitions of manufacture in other enactments such as the Factories Act or the Excise Act should not be blindly applied to the Transfer of Property Act. - P.C Cheriyan v Darfi Devi, 1979(2) Kar. L.J. Sh. N. 99 (SC). When a lease is granted, the test to ascertain whether the lease is granted for manufacturing process, the following points should be noted.1. There must be evidence that a certain commodity was manufactured; 2.

That the process of production must involve either labour or

machinery; 3. That the product which comes into existence after the manufacturing process is complete, should have a different name and should be put to a different use. where lease was granted for running a flour mill wherein wheat waft transformed by manufacturing process which involved both labour and machinery, into flour it was held that all the three tests were fully satisfied and hence the lease was one for manufacturing process and could be terminated by giving 6 months notice under this Section. Idandas v Anant Ramchandra Phadke (dead) by LRs., AIR 1982 SC 127

Section 106 - The lease deed was silent in regard to the purpose for which the premises was leased. It showed that what had been leased was shop premises. It did not say that what had been leased was a workshop premises. The word "Shop" ordinarily indicated that it was a place for

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buying and selling goods. The Court below rightly came to the conclusion that the lease was not for a manufacturing purpose, though the Appellant infact might have used the premises for a manufacturing purpose a couple of years after the premises was leased to him. As the lease was not for a manufacturing purpose, the notice of 15 days given in the case was proper and valid in Law. - Vittal Narayana v Channappa, 1973(2) Mys. LJ. Sh.N.12.

Where the lease was taken for carrying on bakery and saw mill business, if a lease for manufacturing purpose and the notice of termination require is of 6 months duration. Notwithstanding what is contained in Section 107, the Provisions of Sec. 106 of the Act will apply to a manufacturing lease, whether the lease deed is registered or unregistered, so as to make it a lease from year to year for the purpose of that Section, (i.e) to control duration of the period of the notice. - Rev Fatner John Augustine Peter Miranda v N. Datha Naik, 1971(2) Mys. LJ. 204

RELATIONSHIP OF TENANT AND LANDLORD

The H.R.C. Tribunal has given a finding that there is no relationship of landlord and tenant in the earlier proceedings between the same parties. Subsequent thereto the present suit came to be filed and the finding given by the H.R.C. Tribunal has become final and conclusive. Therefore, when on the question of legal-jural relationship between the parties competent

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Court of law has already given a verdict, despite the said verdict if plaintiff were to repeat and describe the relationship as landlord and tenant it would be only a contention without legal basis and non-description of the defendant's position as that of a trespasser also does not appear to be a fatal one since the suit is based on title and if some other person is in possession the owner of the property can always maintain a suit for possession basing on the title. Hence, under the circumstances suit is maintainable. - M.S. Narayana Rao v S.K. Pundareeka, 2001(3) Kar. LJ. 339A (DB).

ATTORNMENT TO SUBSEQUENT LANDLORD The month of tenancy was from 27th of each month and was to expire on 27-7-1974. Respondent purchased the property on 17-4-1967 and the tenant attorned to the purchaser. Held, attornment implies a continuity of tenancy created by the original landlord in favour of the tenant and the month of tenancy does not get altered. Therefore, the notice to quit issued by the purchaser requiring the tenant to quit and deliver possession on the expiry of 16-11-1967 on the basis that the tenancy was from the 17th of each month by virtue of the attornment was not according to law and the purchaser acquired no right to evict the petitioner. As a purchaser with knowledge of the petitioner being in possession as tenant, the respondent was bound by the terms of the lease. - Karupakale R. Govindiah v C. Veerabhadriah, 1974(2) Kar. LJ. Sh. N. 135. Where sale of a tenanted premises recited that vendor has attorned the tenants to the purchaser and the tenant attested the sale deed, it was held

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it proved attornment of tenancy to the purchaser. Sohanraj v Kanyalal Daga, 1979(1) Kar. L.J. Sh. N. 45. Rights of lessor's transferee to rent - Transfer of property by lessor without notice to lessee creates no privity of estate between lessee and transferee - Attornment of tenancy is legal pre-condition in case of transfer of property, if contract of lease is to be created between lessee and transferee - If lessee, not having notice of transfer, had paid rent to lessor even after transfer, lessee shall not be liable to pay such rent over again to transferee. Attornment of tenancy is a legal precondition in cases where changes take place with regard to the transfer of ownership. The tenancy is a legal obligation between two parties and if a new person comes into the shoes of the landlord, it is very necessary that notice of this fact be given to the opposite party and that the tenancy be attorned. In the absence of this being done, the right on the part of the new landlord to demand and receive the rent cannot be enforced. . . . The record clearly indicates that the petitioner had no notice of the change of ownership nor was the tenancy attorned. . . . The decree passed against the petitioner is vitiated in so far as it is impermissible to sustain that decree both on facts and in law. - T. Ratna Pandyan v P. Subramanyam Chetty, 1997(2) Kar. L.J. 365.

PERMANENT LEASE A lease of 1914 for erecting a factory and appurtenant buildings stated: it was to be for a term of 20 years certain, on payment of Rs. 350 as annual rent; even though the lessee may not continue to occupy the land, the

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lessee was granted the right to continue the lease as long as he desired to do so; on his choosing to continue to enjoy the leasehold, the lessee was obliged to pay annually the enhanced rent of Rs. 400 for the next ten years after October 1,1934, and after the expiration of ten years, the rent was further enhanced to Rs. 500 per annum; the lessee was given the option to give up the lease at any time after October 1, 1934 without further liability; the lessor bound himself not to call upon the lessee at any time to give up possession of the leasehold as long as the lessee was prepared to observe the terms of the lease. The lease was heritable and assignable. Held, the lease was intended to create a permanent lease and after the lapse of the first 20 years did not become a tenancy at will or even one for an indefinite term and therefore a lease for the lifetime of the grantee. Where land is let out for building purposes without a fixed period, the presumption is that it was intended to create a permanent tenancy. This presumption was not weakened by the fact that the lessee had stipulated to be entitled to give up possession if and when he decided to do so. It was an advantage specifically reserved to the lessee and did not confer any corresponding benefit on the lessor. That the lease was not intended to be for the life only of the grantee was clear not only from the facts, that it was meant for building purposes, was heritable and assignable and had*not reserved any right to the lessor to terminate the tenancy, but also from the consideration that the lessor would not gamble upon the life of his lessee when he was making sure of the term of at least 20 years. Sivayogesivara

Cotton

Press,

Davangere

and

Others

v

M.

Panchaksharappa and Another, 1961 Mys. L.J. 1043 (SC). No permanent lease could be granted either orally or even by means of an unregistered deed. Once it is held that the lease as a permanent lease is invalid, then that lease will have to be treated as a precarious lease.

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Where a lease is invalid (by reason of absence of a registered instrument as required by Section 107 of the Transfer of Property Act), the fact it is invalid in law is a matter which the lessee must be presumed to know and he is not entitled to compensation for the permanent structure erected by him. He is only entitled to have it removed. - Rama Devadiga v Ganapami Karantha, 1962 Mys. L.J. 861: ILR 1962 Mys. 250.

UNLESS THE LEASE IS DETERMINED IN ONE OF THE BODIES UNDER SECTION 11 OF T.P. ACT, THE LANDLORD WOULD NOT BE ENTITLED FOR RECOVERY OF POSSESSION Section 21 Karnataka Rent Control Act refers to recovery of possession of any premises by the landlord, before the landlord approaches the Rent Control Court under Section 21(1), it is necessary that he should be entitled for recovery of possession. Unless the lease is determined in one of the bodies under Section 11 of T.P. Act, the landlord would not be entitled for recovery of possession, hence an action under Section 21 Rent Control Act cannot be instituted without first determining the lease. Church of South India Trust Association v Sampangiraman, 1979(1) Kar. LJ. 85.

CONTRACTUAL TENANCY - CONTRACT TO CONTRARY

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Section 106 of the T.P. Act applies to a contractual tenancy, though governed by Rent Control Act. - Bhaiya Punjalal Bhagwanddin v Dave Bhagwatprasad Prabhuprasad and Others, 1962 Mys. LJ. 712 (SC). When the compromise petition which was incorporated in compromise decree provided that the transferee should collect arrears of rent due, it is a contract to the contrary and hence the transferee is entitled to arrears of rent due before transfer. - Girdharilal (dead) by L.Rs. v Hukum Singh, AIR 1977 SC 129. Second para of Section 110 though refers to a lease for a year or number of years, principles reflected therein will apply even when time limited by lease is a month or a week or a number of months or weeks - Whether the tenancy is for year/s or month/s or week/s, principles contained in para 2 would be subject to an agreement to the contrary - Where the duration of lease was for period from 1-11-1974 to 31-1-1975, tenancy holding over was held to commence from 1-2- 1975 and such tenancy would be from month to month and that it should be terminated at the end of the month of the tenancy - Case-law discussed. - S.P. Gurjar v Muddanna Shetty, 1990(2) Kar. L.J. 213 : ILR 1990 Kar. 3099.

RENT ACCEPTANCE - WAIVER OF NOTICE The lessee was holding certain land of lessor for running a mill since 1905. In 1936, the lessee transferred his rights to a Company. In the lease

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deed there was not only an express clause under which the lessee was entitled to remove the stocks and materials within 4 months after the termination of the lease but thereafter there was another stipulation that in case the lessee failed to do so, all the buildings etc., would become the property of the lessor. The lessor sent to the Company a notice terminating the lease deed on the ground of breach by the Company of certain covenants contained therein. The time was allowed to the Company for the removal of machinery stores etc. The Company, however, secured an order from a Civil Court prohibiting the lessor from ejecting it. In land acquisition proceedings at the instance of Company for its own purpose, the questions were whether there was waiver of notice by acceptance of rent by landlord, whether there was forfeiture of tenancy under Section 111(g) of the T.P. Act and whether there was compliance with Section 114-A of the T.P. Act. The Supreme Court held that there was no waiver of notice. When there was no evidence to show that the rent was accepted at any time after the notice was given to Company, and secondly as the rent was accepted by lessor under protest, it could not amount to waiver because there was no intention on the part of the lessor to treat the lease as subsisting. - Basant Lal (dead) by L.Rs. and Another v State of Uttar Pradesh and Another, AIR 1981 SC 170 When the permanent lease is void for want of sanction, acceptance of rent by landlord makes the tenant a monthly tenant. Non mention of year in the notice can be reasonably construed. Where the intention was clear, not stating that the tenancy is terminated not material. - 1973(2) Mys. L.J. Sh. N. 300. TRUST PROPERTY

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When there are several trustee landlords one of them can terminate tenancy - 1962 Mys. LJ. 57. LEASES OF INDEFINITE PERIOD The rule of construction embodied in Section 106 of the T.P. Act is applicable not only to express leases of indefinite period but also to leases implied by law which may be inferred from possession and acceptance of rent and other circumstances. - Ram Kumar Das v Jagdish Chandra Deo, Ohabal Deb and Another, AIR 1952 SC 23

LESSEE AND THE ASSIGNS Where the lease is with the lessee and the assigns, the lessee and assigns being called lessees, the lease permits sub letting, and consent is lessor is not necessary for sub letting. - 1964 Mys. L.J. Supp. 112. In the case of a lease there is privity of contract between the lessor and the lessee and the lessee cannot divest himself of his liability to the lessor by merely making an assignment of the lease. Assignment of the lease may result in primity of estate between the assignee and the lessor inconsequence of which both the assigning lessee and assignee become liable to the lessor for the payment of rents. - Devidasa Bhatta v B. Ratnakara Rao and Another, 1965(1) Mys. L.J. 731. The words "Such consent, however, not to be unreasonably withheld in the case of respectable or responsible persons" contained in the covenant in a lease allowing the lessee to assign his interest only with the lessor's

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written consent does not amount to a separate or independent covenant by the lessor that he would not refuse consent except upon reasonable grounds in the case of respectable person, but they limit or qualify the lessor's covenant not to assign the defined premises without the consent in writing of the lessor. - Kamala Ranjan Roy v Baijnath Bajoria, AIR 1951 SC 1 When the entire interest in land is transferred by lessee with reservation to take back' possession on failure of transferee to discharge lessee's liability towards lessor within stipulated time and the lessor accepts part payment from transferee without recognising him as debtor, the lessee has right to recover possession according to agreement between the lessor and the lessee. - Parkash Chand Khurana v Hamam Singh, AIR 1973 SC 2065. When the tenant has sublet the premises and the subtenant caused material damage to building, the landlord can evict the tenant on the grounds that the subtenant has caused damage to the building. There is no privity of contract between landlord and subtenant. The tenants obligation to maintain the building in good condition continues even after creation of sub-tenancy. The tenant is responsible for wrong acts of subtenant and so liable to be evicted for damage caused by subtenant M/s. Laxmi Narain Gauri Shankar v Gopal Krishan Kahoria and Another, AIR 1987 SC 8.

LEASE BY AFFLUX OF THE TIME

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Where the tenant did not vacate the premises on the expiry of the lease by afflux of the time under Section 111(f), T.P. Act, and the case is governed by the provisions of the T.P. Act, the continuance in possession of the tenant after the expiry of the lease is unauthorised and wrongful and a decree for damages are mesne profits is rightly awarded against him. Shyam Charon v Sheoji Bhai, 1978(1) Kar. LJ. Sh. N. 10 (DB).

CLAIM OF TITLE IN HIMSELF ON THE PART OF THE LESSEE Where the very case of the landlord is based on a contractual tenancy, it must be determined by a notice in accordance with Section 106, T.P. Act, for the landlord to earn the right to obtain possession of the leased premises under the Rent Control Act. This point was allowed to be taken in revision for the first time. Claim of title in himself on the part of the lessee would not ipso facto put an end to the lease. It confers a right on the lessor, if he so elects, to determine the lease by a notice as required by Section 111(g) of T.P. Act. - Dyamappa Butti v Somappa, 1968(1) Mys. LJ. 221.

NOTICE CLAIMING RENT AT THE ENHANCED RATE If a notice claiming rent at the enhanced rate is given by a landlord to his tenant giving him the option to vacate in case he is unwilling or unable to pay the enhanced rent and the tenant continues to be in occupation of the premises without protest, the landlord would be entitled to recover rent at the enhanced rate, unless the Court finds that the enhanced rate is itself unreasonable or penal. Where a tenant denied the right of the landlord to

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enhance the rent unilaterally and refused to pay enhanced rent and the landlord did not take steps to evict the tenant, the tenant is not liable for the enhancement. The landlord could not unilaterally determine what is the fair or reasonable rent for the premises and claim it from the tenant so long as the relationship of landlord and tenant between them had not come to an end. - J.P. Sagar v State of Mysore, 1964 Mys. L.J. Supp. 605.

NOTICE IN THE ORIGINAL WRITTEN LEASE COULD NOT BE IMPORTED INTO THE NEW TENANCY CREATED BY HOLDING OVER A lease of a premises for a period of 10 years on an annual rent of Rs. 100 expired on 15-10-1958. The lease provided that if after five years from the date of the lease the landlord wants the premises for constructing a house for his own use he should ask for the premises after giving the tenant six months' notice. That occasion did not arise and the tenant continued in possession even after the expiry of the period of lease. On 15-10-1965 the tenant agreed to pay enhanced rent of Rs. 125 per year and an endorsement was made on the original lease deed. On 19-5-1969 the landlord served notice on the tenant to surrender possession after six months. On the expiry of the period of six months, the tenant refused to surrender possession. Held, (1) The notice issued was not in accordance with the terms of the lease. (2) That the term as to notice in the original written lease could not be imported into the new tenancy created by holding over and the necessary consequence was that the notice issued by the landlord was invalid. - E. Keshavayya v R, Namsimha Prabhu, 1975(2) Kar. L.J. 232 : AIR 1976 Kant. 41.

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LEASE OF FISHERY A lease of fishery which is immoveable property as defined by Section 2(6) of the Registration Act, if it is for any term exceeding one year or reserves a yearly rent should be registered by Section 17(l)(d) of the Indian Registration Act, 1908 and Section 107 of the Transfer of Property Act. - Bihar Eastern Gangetic fishermen Co-oper.ative Society Limited v Sipahi Singh, AIR 1977 SC 2149.

ALTERING EXISTING REGISTERED LEASE DEED Any agreement which alters the essential terms and conditions of an existing registered lease must be registered. - Sunil Kumar Roy v M/s. Bhaiura Kankanee Collieries Limited, AIR 1971 SC 751.

HEREDITABILITY OF TENANCY OF INDEFINITE TERM The Courts in India cannot apply the principle of Law that if the term mentioned in a lease is definite the interest of the lessee is heritable and if the term mentioned is indefinite, the interest of the lessee is not heritable. Whether the interest is heritable entirely depends on the wordings of the document and the intention of the parties. - Narayan Narasimha Deshpandey v Kasiroya Sangappa, 1960 Mys. L.J. 530.

LEASE - OF IMMOVABLE PROPERTY FOR PERIOD NOT EXCEEDING ONE YEAR

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Registration and attestation of lease deed not required - Examination of attestor not required to prove execution of such deed. Held: Section 107 of the Transfer of Property Act deals with the procedure as to how leases have to be made. Section 107 does not require attestation of a lease not exceeding one year. When the lease deed requires no attestation, Section 68 of the Evidence Act will not be applicable and lease deed could be proved by examining the scribe as done in this case. - T. Anthonidas alias T.A. Das v S.P. Mariyappa, 1996(3) Kar. LJ. 329A.

Lease of immovable property from year to year - Mandatory that such lease should be by registered instrument - Where it is not so made, tease is to be taken as monthly lease for purpose of Section 106 of Act. Held: Under Section 107 of the Act, it has been provided that a lease of immovable property from year to year or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. In view of this statutory provision, it was mandatory to execute a registered instrument, if the tenancy was contemplated to be annual in nature. In the present case, since admittedly it was not made by a registered instrument, the lease cannot be taken to be an annual lease. Therefore, necessarily it has to be taken as a monthly lease for the purpose of Section 106 of the Act. - Virupakshaiah alias Veeraiafi v Shivaputrappa Basappa Golappanavar, 1996(5) Kar. L J. 53A.

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VOID LEASE - REGISTRATION COMPULSORY Where a verbal agreement was made for the grant of a lease for 5 years and in anticipation of execution of a lease deed, the lessee was put in possession by the lessor who received 3 months rent as advance but no lease deed was executed, it was held that lease was void because of the prohibition under this Section. - National Textile Corporation Limited v Malathesha Enterprises and Another, 1980(2) Kar. LJ. 335.

When there is a lease agreement in respect of a building for indefinite period for carrying on business in which the rent payable by the lessee is agreed to be settled on basis of percentage of profits earned after 15 months from commencement of lease. The lease is evidenced by unregistered document. It was held that the lease was one for a period exceeding one year and hence registration was compulsory under Section 107 of the T.P. Act. - Delhi Motor Company and Others v U.A. Basrurkar (dead) by his LRs. and Others, AIR 1968 SC 794.

MULGENI LEASE Where a mulgeni lease (in South Kanara District) stated that 'if any timber trees were cut and removed, the lease was liable to be forfeited and determined'. Held, this provision indicated that there was a prohibition to cut and remove timber trees and the lessee had no right in respect of timber trees. That the lessor has no rights in future growth has been

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recognised to be the principle prevailing in respect of trees in South Kanara in regard to permanent leases. Hence, on the basis of the custom or usage prevailing, and in the absence of any specific term in regard to future growth, the tenant would be entitled to rights in trees of spontaneous growth or that came to be planted after the date of the lease deed : and the landlord would have no right to interfere with the right of tenant to such tree. - Seethamma v Louis Patroo, 1975(1) Kar. LJ. Sh. N. 36. According to the terms of the mulgeni instrument, the tenant had a right to continue to be in possession of the property from generation to generation, the landlord having no right to resume the land. The only right reserved for the landlord was the right to recover the rent as and when it fell due and to recover it by the enforcement of a charge, which had been created on the property, leased to the tenant. The only process by which the landlord would perhaps be entitled to recover possession of the land was when there was a reversion to him of that land by reason of the death of the tenant for the time being, who left no heirs and died intestate. The tenant cut and removed five trees, which were in existence at the time of the lease. Held, (1) A lessee has no right to cut or destroy trees which existed on the leased premises when the lease was created, but that trees which have subsequently been planted on the premises by the lessee or which have spontaneously grown after the commencement of the lease may be so removed or cut by him. (2) The value of the trees removed would not represent the correct measure of damages, as the landlord had no right to the immediate possession of the land or to the trees. The measure of damages must rest on the dimunition in the value of the reversion and the dimunition in the security. The proper damages would be to estimate the diminution in the value of the property and

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deduct from it a discount for immediate payment. - Madhwaraya Udpa v Dasa Tantri, 1963(2) Mys. LJ. 416: AIR 1964 Mys. 179.

PUTTING UP FIRST FLOOR ON TERRACE BY LESSEE Lessee running business of manufacturing vermicelli using terrace portion for drying vermicelli - Lessee commenced putting up first floor on terrace - Lessee obtained an order of temporary injunction - Contended that lessor had not reserved right of re-entry and thus had no right to put up 'building' on thereof - Rights of lessor. Held, The view that roof is not included in the definition of 'building' appears to prima fade wrong. The terrace is the top portion of the roof. Merely because the landlord has not reserved the right of re-entry, it does not mean that he has no right to put up the first floor. His right to put up first storey on the terrace of the building cannot be defeated only in the ground that he has not reserved the right of re-entry. If interference does not affect the object of the lease for which it is taken, then it cannot be said to be an interference with the quiet enjoyment of the building. - Salauddin v Bommegowda, ILR 1985 Kar. 2959.

TERM OF LEASE When lease is made for a specified term a third person gets into possession under title alleged to be derived from the lessee under certain transfers. Lessor questions the validity of the Transfer and sues the third person for possession. HELD, lessor cannot succeed till the expiry of term

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of lease - Parashram Mahadeo v Rajen Textile Mills (.Private) Limited, AIR 1975 SC 2079.

COURT IS NOT AT LIBERTY TO BREAK UP THE CONTRACT When the premises are let for residential and non-residential purposes, the contract of tenancy should be deemed to be single and indivisible. The Court is not at liberty to break up the contract. That the relief should be limited to that portion which is used for residential purposes is not valid. Miss S. Sanyal v Gian Chand, AIR 1968 SC 438.

ACCESSION TO ADJOINING AREA OF LEASED PROPERTY Encroachment by tenant during tenancy upon landlord's vacant land adjoining tenanted premises - Presumption is that land encroached upon are added to tenure for benefit of tenant so long as tenancy continues Tenant cannot acquire title to encroached land by adverse possession but obtain only right of tenancy under landlord - Tenant is obliged to hand over encroached area also to landlord on determination of lease along with premises originally demised. Held.-There is a presumption that whenever a lessee or a tenant encroaches upon the adjacent area to his leased or tenanted premises, then such encroached area or premises or property, also gets included as the 'Leased or Tenanted' property and the tenant is obliged to protect the landlord's rights in respect of the encroached area also, and deliver up unto the landlord at the end of tenancy the said encroached area alongwith the original tenanted or

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leased area. . . . The open space on the northern and eastern side of the leased portion prima facie belong to the landlord. This disputed vacant land is also to be considered as tenanted property. If it is held as a tenanted property then the relationship of the petitioner in respect of the disputed property is also to be held as one of landlord and tenant. In that view the petition under Section 21(1) is maintainable for eviction. - Syed Nazmuddin v N.S. Krishna Murthy, ILR 1998 Kar, Sh. N. 65.

When the lessee claims accession to lease hold land and makes contradictory pleas in the alternative, the claim for accession of land by the lessee cannot be sustained. - Chapsibhai Dhanjibhai Dand v Purushottam, AIR 1971 SC 1878.

ACT OF COURT SHALL NOT INJURE ANY ONE Section 108(e) - Kamataka Rent Control Act, 1961, Sections 21(l)(h) and (j), 25, 26 and 27 - Lease and right of re-entry - Termination of lease not automatic when leasehold is destroyed - It is at option of lessee - Right of entry under Rent Control Act is traceable to provisions of Section 108(e) of Transfer of Property Act - Interest of tenant does not survive in case of eviction under Section 21(l)(h) - His interest survives in case of eviction under Section 21(l)(j) - Court has ample power to protect tenant's interest in case of eviction under Section 21(1 )(j). Held: The interest of the tenant does not survive in view of the order of eviction under Section 21(l)(h) of the Act. This power of the Court can be traced to the analogous rights of the parties that subsists under Section 108(e) of the Transfer of Property Act. Under general law as codified in the Transfer of Property

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Act, the tenant is entitled to treat the lease as subsisting in the event the landlord of his own accord destroys the tenament. His remaining in possession of the premises in question would be legal and the landlord is not entitled to prevent his retaining possession. But in a case under Section 21(l)(j), such entry and demolition of the tenament has taken place under the authority of law. The authority of law conferred on the landlord permitted him to enter into the leasehold property, pull down the building only on his undertaking to reconstruct the same. If he abuses this permission, namely, fails to honour his undertaking, his remaining in possession of the premises after demolishing the building is tantamount to remaining there without the authority of law. It is as if he had no permission at all to enter the property and pull down the building. If that be so, the principle that the act of Court shall not injure any one should be applied and the Court be empowered to give all directions as is in law a party is entitled to, so that the parties will be restored to the position prior to the permission being granted under Section 21(l)(j) of the Karnataka Rent Control Act. This can be achieved only if permission is granted to the tenant to resurrect or reconstruct the building that is demolished by the landlord. If that be so, in a case of eviction under Section 21(l)(j), the Court has ample power and is bound as well to issue such appropriate directions to meet the ends of justice which will enable the tenant to reconstruct the building as well. - Baburao Ganpatrao Tirmalle v Bhimappa Venkappa Kandakur since deceased by his L.Rs., 1996(2) Kar. LJ. 32F.

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TENANT ATTEMPTING TO CARRY OUT REPAIRS TO RENTED SHED AND PUT UP PERMANENT STRUCTURE WITHOUT LANDLORD'S PERMISSION, ILLEGAL. The suit is in between the landlord and tenant. The rent karar was for a period of 11 months and therefore the defendant's position is that of a tenant holding over. Even then if the defendant felt insecurity or wanted certain repairs to the building as a measure of security, he had every right to approach the landlord, obtain his permission and put up construction. There is nothing to indicate in the evidence that defendant at any time approached the plaintiffs and obtained permission. Section 108(f) of the Transfer of Property Act provides a remedy in a situation where the landlord neglects or refuses to effect necessary repairs. Sub-section (h) empowers him to remove such fixtures even after the determination of the lease subject to the condition that he leaves the property in the state in which he received it. These things and the question of law on the point have been ignored by the Appellate Court in considering the evidence both oral and documentary. It is an error in law and defect in procedure which requires to be corrected in appeal. - Noorulla Amin Musuba and Others v Chandru Sheniyar Naik, 1996(6) Kar. LJ. 275D.

LESSOR IS ENTITLED TO REMOVE COMPOUND WALL PUT UP WITHOUT HIS CONSENT.

Even to effect repairs the tenant is expected to give notice to the landlord. In the instant case the appellants have not even bothered either to

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intimate the landlord or obtain necessary permission for the purpose of erection of compound. Further, the appellants also never bothered to know from the landlord regarding measurement of the premises bearing No. 17. Further, the appellants are also not able to establish that they had put up the compound within the premises bearing No. 17. Under these circumstances the Trial Court is justified in not exercising its discretion in the matter of granting injunction in favour of the appellants. .... The Trial Court having considered all the materials placed before it declined to grant injunction in favour of the appellants. If that is so, there is no reason to interfere in the order of the Trial Court in these two appeals. - The Home School, Bangalore and Another v M. Shaft Ul Haji and Another, 2001(6) Kar. L.J. 93.

OWNERSHIP/REMOVAL OF BUILDING CONSTRUCTED BY TENANT DEPENDS ON CONTRACT. Lease of vacant land - Condition permitting lessee to construct building on leasehold land and requiring him to surrender possession of land with building on expiry of lease without compensation - Ownership of building vests in lessee so long as lease is subsisting, and on expiry of lease, it passes on to lessor - Matter is one of contract between parties. Normally, under Section 108 of the Transfer of Property Act, before the expiry of the lease, a lessee can remove all structures and building erected by him on the demised land. All that was necessary for him to do was to give back the land to the lessor, on the termination of the lease, in the same condition as he found it. The ownership, therefore, of the building in this case was not with the lessors but was with the lessees. Under Section 108 of the Transfer of Property Act, there was nothing to prevent the lessees

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contracting to hand over any building or structure erected on the land by them to the lessors without receiving any compensation. In other words, although under Section 108 the lessees had the right to remove the building, by the contract they had agreed to hand over the same to the lessors without the right to receive compensation at the end of the lease, the matter being entirely one of contract between the parties. Such a contract, however did not transfer the ownership in the building to the lessors while the lease subsisted. - S. Shivamthan (deceased) by L.Rs. v S.G. Narayana, ILR1998 Kar. Sh. N. 90.

A lessee who has put up a building with the consent of the landlord on the leased premises, is not entitled to be compensated for the costs incurred by him in respect of the structures put up by him, when the tenancy is terminated and when he is called upon to quit and deliver the possession of the property to the lessor - Mohammad Hayat Sahab v Radhakrishna Bhaktha, 1968(1) Mys. L.J. 63 Where lessee has agreed to construct building of value of not less than Rs. 15,000/- which at the expiry of the lease was to become the property of the lessor and the building valued at Rs. 50,000/-, the lessor is entitled to building and not merely structures worth Rs. 15,000/-. Y:V. Srinivasa Murthy by L.Rs. v Pillamnw and Others, 1973(2) Mys. L.J. 399.

When the Lease deed provides for passing of ownership of superstructure built by lessee to lessor after expiry of tenancy, the lessor is under obligation to pay certain percentage of market value of structure to lessee

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under the agreement. The lessee cannot retain possession until amount is paid - Madan La! v BHai Anand Singh, AIR 1973 SC 721.

The lessor is not debarred from determining the lease or filing a suit for ejectment merely because the lessee has made construction to the knowledge of the lessor - Jagat Ram Sethi v Rai Bahadur D.D. Jain, AIR 1972 SC 1727.

CHALGENI LEASE A lessee under a chalgeni lease may, in the absence of a prohibition contained in the lease itself assign his lease hold interest for the duration of the term of the lease or the balance of it at the time when the assignment is made. After the expiry of the term of the lease, the assignee has no interest subsisting as to entitle him to a declaration of his being a chalgeni tenant. A renewal of the lease by the tenant holding over and the landlord receiving the rent, is a renewal of pre existing contractual relationship, and the benefit of such renewal cannot be claimed by the assignee after the expiry of the term. - Umamaheshiuara Temple by Trustee v Leo Cresta, 1966(2) Mys. LJ. 483.

LESSEE FILING SUIT FOR MANDATORY INJUNCTION Certain part of land was leased to a person. The lease granted a portion of a land on license to another for a specified period. The license was

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terminated after the expiry of the period. The lessee against licensee filed a suit for mandatory injunction. The licensee claimed to have purchased the land from the owner. Suit by lessee for possession is maintainable. See Specific Relief Act, 1963, Section 6. - Sant Lal Jain v Avtar Singh, AIR 1985 SC 857.

SUB-LESSEE RIGHTS Premature surrender of leasehold rights by main lessee and its effect on right of sub lessee - Such surrender does not operate as eviction of sub lessee - It only brings sublessee into direct contact with lessor, making sub lessee himself main lessee under lessor on terms of existing sublease If, after such surrender, new lease is entered into with third party, such third party who has become new lessee, does not step into shoes of his predecessor lessee who had created sublease and does not ipso facto become landlord of sub lessee for purpose of evicting sub lessee - Where main lessee, partnership firm, had prematurely surrendered its leasehold rights after creating sublease, and on such surrender, third party individual became main lessee, new lessee does not become landlord of existing sublessee for purpose of evicting him. Held: It is well established that the lease is a transfer of interest in immoveable property. Section 105 of the Transfer of Property Act, 1882 provides that a lease of immoveable property is a transfer of right to enjoy such property made for a certain time, express or implied, and for consideration. Clause (j) of Section 108 of the T.P. Act, subject to any contract to the contrary, authorizes the lessee to sublease the whole or any part of his interest in the leasehold

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property. .... During the subsistence of the lease, the sublessee in whom the lessee's interest is vested, acquires right to continue in possession over the demised premises during the subsistence of the lease. Therefore, coming to the facts of the present case, but for the surrender of the lease by the head lessee i.e., the firm, the petitioner was entitled to continue his possession over the petition premises till 1978 in his own right since the lease in favour of the firm was for a period of 9 years. . . . .Despite the above noted statutory provisions and consequent right of the petitioner flowing there from, the same was sought to be destroyed by the respondent on the strength of a registered lease deed dated 6-2-1974 obtained from the owner by taking a plea that he had obtained the said lease on surrendering of its leasehold rights by the firm and thus, he has stepped into the shoes of erstwhile lessee firm. Thus, according to him, he has become landlord of the petitioner as defined under Section 2(h) of the KRC Act. According to the said provision, in respect of a subtenant, the tenant, who has sublet the premises is the landlord for the purposes of the said Act.. . .It is no doubt true that the sub lessee's interest being carved out of lessee's interest, it will, as a general rule, be determined by the determination of the lease itself. But, determination by surrender of the lease by the lessee is an exception to this general rule. Surrendering being a voluntary act on the part of the lessee, the principle that a man cannot derogate from his own grant will come into play and the lessee's action will not be allowed to prejudice the sub lessee. It is this equitable principle, which has been incorporated in Section 115 of the T.P. Act. By operation of this statutory provision on surrender of the lease by the head-lessee, the sub lessee becomes a lessee of the lessor on the terms of the sublease. Thus, the under lessee, by operation of law is brought into direct contact with the lessor, except where surrender is made by the head lessee for obtaining new lease. .... .The plea raised by the respondent

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is that before the lease was granted to him on 6-2-1974, the firm had expressly or impliedly surrendered the lease granted in its favour. If that be so, then by operation of the statutory provisions under Section 115 of the T.P. Act, the petitioner being the under lessee, himself became the head lessee under the Math. Therefore, there could not have been any occasion for granting any competing lease to the respondent in respect of the petition premises. For this reason, it has to be held that respondent at no point of time, became the landlord of the petitioner for the purpose of the K.R.C. Act entitling him to maintain any eviction proceedings there under against the petitioner. - Krishnasa Kheerasa Habib v Shah Parasmal Pittaji Jain, 2000(1) Kar. LJ. 12.

THE TENANT IS NOT ENTITLED TO SUSPEND PAYMENT OF RENT When landlord fails to give possession of one out of three bed rooms of demised premises, the tenant is not entitled to suspend payment of rent, but he must pay proportionate rent. - Surendra Nath Bibra v Stephen Court Limited, AIR 1966 SC 1361.

PURPOSE OF LEASE The purpose of lease of certain land was that the premises was not to be used for any purpose other than the specified purpose. When the tenant uses the premises for other purpose which is connected with the main purpose, it could not be said that the premises was used for the purpose

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other than that of the lease. The inhibition of Section 108(o) is not attracted. - Jnan Ranjan v Arun Kumar, AIR 1975 SC 1994.

POSSESSION ON THE EXPIRY OF THE LEASE

A condition that the lessee has to put the lessor in possession on the expiry of the lease is to be read in the lease even in the absence of such condition. - Thayarammal v People's Chanty fund and Others, 1978(1) Kar. LJ. 438.

FUTURE LESSEE RIGHT TO EVICT EXISTING LESSEE

When the lease is to commence from expiry of the existing lease, the lessee can sue for eviction of original lessee. The right of transferee under the Section is not curtailed by Rent Control Act. See Karnataka Rent Control Act, Sections 3, 4 and 31. - N. Venkataramana Bhat v A. Prabodh Naik and Others, 1975(1) Kar. LJ. 262.

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DETERMINATION OF LEASE Where a widow having a right of residence in a family house created a tenancy, such lease stood determined on her death. Section lll(c). See T.P. Act, Section 6(g). - Bhujabalappa Anandappa Baragali and Another v Veerappa Mahabaleshappa Doddamani, 1966(2) Mys. L.J. 56. Lease is determined on expiration of notice to determine thereof - Lessee is bound to put lessor into possession of property, on determination of lease - Question of bona fide requirements of landlord not required to be gone into - Provisions of Section 21(1) of Karnataka Rent Control Act, 1961 regarding eviction of tenant are not attracted when suit is under Transfer of Property Act and suit premises are situated in place to which provisions of Rent Control Act do not apply. Held: The suit instituted by the appellant under the provisions of the Transfer of Property Act, 1882. The property in dispute is situated in Akki-Alur village to which admittedly the provisions of the Karnataka Rent Control Act, 1961 do not apply. Therefore the question of bona fide requirement of the premises for appellant's use was not a matter that was required to be gone into. The appellant incidentally or inadvertently referred to the requirement of the premises for his bona fide occupation but the appellant was not required to prove that averment of bona fide requirement of the premises for a decree of eviction. In a suit under the provisions of the Transfer of Property Act, 1882 under Section 108 of the Transfer of Property Act, 1882 under clause (q), on the determination of the lease the lessee is bound to put the lessor into possession of the property. Section 111, Transfer of Property Act which deals with determination of lease states

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that lease of immovable property determines on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other. - Shantaveerappa Puttappa Chaushetti v Gangaram Hemajeppa Kalal (since deceased) by L.Rs. and Others, 1996(3) Kar. L.J. 338.

SALE OF AGRICULTURAL LAND - WHERE TENANCY EXISTED An agreement to sell was executed in favour of the plaintiff, a tenant and the tenant continued in possession and in execution of a money decree against the plaintiff-tenant, the property was brought to sale and purchased by the decree-holder and thereafter the plaintiff brought a suit for declaring the execution sale as void and not binding on him. No objections were filed by plaintiff after the notice under Order 21, Rule 66 of the CPC was served on him. Section 28 of the Bombay Tenancy and Agricultural Lands Act prohibited Sale of tenancy rights. Held, that the question whether the plaintiff's rights of tenancy in the suit land got merged in the rights acquired by plaintiff under Section 53-A of the Transfer of Property Act cannot be raised for the first time in second appeal. Since only the right to ask for specific performance had been acquired by the plaintiff under the agreement to sell and since such right does not constitute an interest in immoveable property, there was no merger of the tenancy rights of the plaintiff with the right under the agreement to sell, under Section 111(d) of the Transfer of Property Act. Therefore, there was no bar of constructive res judicata to the plaintiff's suit, which was in respect of his rights as tenant and which were not

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brought to sale. The bar under Section 34 of the Specific Relief Act applies when the plaintiff is entitled to ask for consequential relief but abstains from doing so. As the plaintiff did ask for the consequential relief of possession but the Court found that he was not entitled to it, the bar under Section 34 of the Specific Relief Act did not apply and the plaintiff was therefore entitled to a declaration that the execution sale was void. Rangarao

Ramarao

Deshpande

v

Channappa

Basappa

Lakshmanahalli , 1974(2) Kar. L.J. 208 : AIR 1975 Kant. 155

TENANT PURCHASING LAND FROM ONE OF MEMBERS OF JOINT FAMILY Lease - Determination of - Tenant of land forming part of joint family property purchasing land from one of members of joint family - Since what he has purchased is only undivided share of member in joint property, he has no right to possession, either exclusive or joint, and consequently there is no merger of interests of lessee and lessor in property in himself - Lease in such case is not determined. Held: Section 111(d) of the Transfer of Property Act provides that lease of immovable property determines in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right. Therefore, it is clear that it is only in case the interest of the lessee and the lessor in the whole of the property stands vested at the same time in one person in the same right, there would be determination of lease. In the instant case, where the original tenant has acquired only one-fifth undivided interest of the lessor, it cannot be said that there is determination of the lease. If there is no determination of lease, the agrarian relationship of landlord and tenant continues. In the instant case,

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both the original tenant as well as his sons did not seek for partition of one-fifth undivided interest in the land and take even symbolic possession of the same. Therefore, the conclusion reached by the Appellate Authority that since the original tenant had purchased one-fifth undivided interest in the land in question from the landlord, the petitioners are not entitied for conferment of occupancy right, is unsustainable in law. The order impugned is liable to be sot aside. - Tukaram Govind Naganvakar (Deceased) by LRs. and A nother v State of Kamataka and Others, 2001(4) Kar. LJ. 505C

LESSEE ENTERING INTO CONTRACT FOR PURCHASE Lessee entering into contract for purchase and entitled to possession under Section 53-A - Lease stands extinguished. - Champalal Bhaktawarmal v Smt. Sumithramma by LRs, 1972(2) Mys. LJ. 242 : AIR 1973 Mys. 110.

For some years prior to 1949 the suit property was let out by plaintiff to defendant and defendant was running a Hotel. On 19-12-1949, plaintiff conveyed the suit property to defendant for Rs. 7,000/- with a covenant for re-purchase for the same consideration within ten years of the documents. It is also stipulated that during the period subsequent to reconveyance, defendant should not be dispossessed for the 10 years from the date of the sale and that the defendant should be hi occupation as tenant on the same rent as before. Plaintiff sued for specific performance of agreement for reconveyance. Held.-The transaction of

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1949 was a sale and not a mortgage, and it brought about the extinguishment of the previous lease by merger under clause (d) of Section 111 of the T.P. Act. The covenant that during the period between the reconveyance and the expiry of 10 years from the Deed, the defendant should be in occupation as a tenant should be regarded as an agreement by plaintiff to grant a lease on the happening of a future contingency and not as providing for a revival of the previous lease. Further, no deed of reconveyance having been executed within time, the plaintiff was relieved of necessity of granting the lease. Hence plaintiff was entitled under the deed of 1949 to a Deed of reconveyance and to possession - Shankara Rao Rama Rao v Ekiwth Mallappa, RSA No. 360/1963, dated 13-71966.

RELINQUISHMENT OF THE LEASE - SURRENDER A letter by the lessee stating that the leased premises had been kept vacant does not amount to relinquishment of the lease - State of Mysore v B.R. Ramoo, 1967(2) Mys. LJ. 625.

Implied surrender determining lease - Surrender can be implied from act of lessee abandoning possession and that of lessor taking over possession - Doctrine of Estoppel is basis of implied surrender - One of joint tenants vacating premises amounts to implied surrender on his part. Held: Section 111(f) of Transfer of Property Act provides that a lease of immovable property determines by implied surrender. Surrender can be

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implied from such facts as the relinquishment of possession by the lessee and taking over possession by the lessor. Implied surrender has its basis on the Doctrine of Estoppel. If a tenant abandons or relinquishes possession of the leasehold premises and the landlord acting on the basis of such conduct of the tenant either takes over possession or where the tenant who has abandoned that premises happens to be one of the joint tenants does something to his detriment there would be an implied surrender of the right of such tenant or joint tenant. - Akkatai alias Sujata v Baburao SattappaAngol (dead) by L.Rs. 1995(6) Kar. LJ. 219B. A waiver is an intentional relinquishment of a known right. There could be no waiver unless the person against whom the warver is claimed had full knowledge of his rights and of facts enabling him to take effectual action for the enforcement of such rights. - Associated Hotels of India Limited v S.H. Sardar Ranjit Singh, AIR 1968 SC 933.

AGREEMENT RESERVING RIGHT OF RE-ENTRY TO LANDLORD RIGHT DOES NOT AUTHORISE BOARD TO FORCIBLY RESUME POSSESSION

Determination of - By forfeiture - Agreement reserving right of re-entry to landlord - Right does not authorise Board to forcibly resume possession Possession to be resumed either by initiating proceedings under Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974 or by filing suit. Held: The power of re-entry and 'resumption' that is

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reserved by the Board in the lease-cum-sale agreement, does not authorise the Board to directly or forcibly resume possession of the leased land, on termination of the lease. It only authorises the Board to take possession of the leased land in accordance with law. In this case, that can be either by having recourse to the provisions of the Public Premises Act or by filing a Civil Suit for possession and not otherwise. M/s. Hanuman Silks and Another v Karnataka Industrial Areas Development Board and Others, 1996(7) Kar. LJ. 277C

MERE ACCEPTANCE OF RENT FOR AND ON BEHALF OF THE LAND LORD WILL NOT CREATE A TENANCY BY HOLDING OVER

The Touring Cinema of Respondent 1 was located on a site, which he obtained under a Lease on 3-1-1979 for 11 months. After the expiry of the lease, he has been paying rent to the son of the owner til] May, 1980. When the renewal of the Cinema Licence was sought for, the owner objected that Respondant 1 had no right to continue in possession. Respondant No.l had filed a suit against the owner and obtained a temporary injunction restraining interference with his possession the District Magistrate granted Renewal of Licence. The same was challenged in a Writ Petition. It was held that Respondant No. 1 cannot be said to be in lawful possession of the site within the Rule 6 of the Cinema Rules. The temporary injunction only protected Respondant 1 against unlawful interference by the owner and was not conclusive, much less indicative of the fact that Respondant No.l was holding over or a person in lawful

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possession of the site. There being no evidence that the owner's son was authorised to receive rents for and on behalf of the owner, nor any evidence that during the term of the written lease, the son was also receiving the rent, mere acceptance of rent for and on behalf of the land lord will not create a tenancy by holding over. - Kanthamma v S.A. Sudarshan and Another, 1981(2) Kar. L.J. 249.

LEASE CONSISTING OF AGRICULTURAL LAND AS ALSO HOMESTEAD. Main lease consisting of Agricultural land as also homestead. When Sub lease of homestead only is made all such sub-leases are Agricultural leases. The question should not be reopened even though the correctness of the view is open to question. The rule that where terms of Statutes or ordinance are clear then even a long and uniform course judicial interpretation of it may be over ruled, if it is contrary to clear meaning of enactment, is in applicable to decisions on the basis of which titles and transactions must have been founded. - Nirshi Dhobin and A nother v Dr. Sudhir Kumar Mukherjee and Others, AIR 1969 SC 864.

ILLUSTRATIONS IN T.P ACT

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(a)

A, the lessor, gives B, the lessee, notice to quit the property leased.

The notice expires. B tenders and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice is waived. (b)

A, the lessor, gives B, the lessee, notice to quit the property leased.

The notice expires, and 6 remains in possession. A gives to B as lessee a second notice to quit. The first notice is waived. (c)

A lets a house to B for 5 years. B underlets the house to C at a

monthly rent of Rs. WO/-. The 5 years expire, but C continues in possession of the house and pays the rent to A. C's lease is renewed from month to month. (d)

A lets a farm to B for the life of C. C dies,,but B continues in

possession with A's assent. B's lease is renewed from year to year.

Supreme Court in Smt. Shanti Devi v. Amal Kumar Banerjee, Air 1981 Sc 1550, wherein it was held that where the lease was for a definite period and the said period expired by efflux of time and there was no allegation of lessee holding over, in such a case there was no requirement of issuing notice for determination of the lease.

NOTICE TO QUIT AND NOTICE TO DETERMINE TENANCY BY FORFEITURE IS DIFFERENT Yashpal Lala Shiv Narain vs Allatala Tala Malik Waqf Ajakhan AIR 2006 All 115 Quoted Geetabai Namdeo Daf v. B.D. Manjrekar AIR

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1934 Bombay 400, Observations “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 principle 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 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 of forfeiture either expressly or by necessary implication. If he exercises the right of 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 of tenancy as provided by Section 106 of the Transfer of Property Act arises, although, in certain cases, some kind of notice indicating cxercise of the right of forfeiture by the landlord may be advisable. On the other hand, when the lease is not for particular fixed period but is only a periodical lease fide a yearly lease or a monthly lease and if the agreement of tenancy provides that the lease can be terminated by notice of termination as contemplated by Section 106 of the Transfer of Property Act, no question of for feiture as such arise. …………… If the lease is capable of being terminated by a notice of termination under Section 106 of the Transfer of Property Act, the legal position is not that the tenancy is terminated by forfeiture. Termination of tenancy on account of forfeiture

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is an entirely different concept, and the court must bear in mind that the concept of termination of tenancy on account of forfeiture and the concept of termination of tenancy by a notice to quit under Section 106 of the Transfer of Property Act are two distinct and Independent concepts. In the instant case no doubt the plaintiff-landlady had a grievance against the defendant that he had innate reluctance to pay the rent. It may be also true that the motive behind terminating the tenancy was the tenant's reluctance to pay the rent; but still when the tenant remained in arrears of rent, no such thing as forfeiture was incurred by him, because the tenancy was not for any fixed period, and hence there was no question of there being any forfeiture clause in the agreement. Further, when the landlady terminated the defendant's tenancy on account of her dissatisfaction about him, no forfeiture was enforced by her, once again because there existed no forfeiture clause in the agreement of tenancy. The fact that the tenant had been guilty of non-payment of rent is just one of the historical facts having no relevance whatsoever with the landlady's right to terminate the tenancy. ………. I will explain the position further. If there existed a forfeiture clause to the effect that on account of breach of certain conditions of tenancy the landlady would be entitled to forfeit the tenancy, any number of notices she might give and still the tenancy would remain unaffected, if no breach of any of the conditions of the tenancy was committed by the tenant. On the other hand, if there existed, no forfeiture clause but the landlady was entitled to terminate the tenancy, the tenancy being a monthly tenancy, the notice of termination will be effective in law, even if no breach whatsoever was committed by the tenant. This is the position in law resulting directly from the provisions of Section 111 of the Transfer of Property Act.

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MERE ACCEPTANCE OF RENT AMOUNTS DOES NOT AMOUNTS TO WAIVER OF NOTICE TO QUIT UNLESS THERE BE ANY OTHER EVIDENCE TO PROVE OR ESTABLISH THAT THE LANDLORD SO INTENDED Sarup Singh Gupta vs S. Jagdish Singh And Ors. AIR 2006 SC 1734, In the instant case, as we have noticed earlier, two notices to quit were given on 10th February, 1979 and 17th March, 1979. The suit was filed on June 2, 1979. The tenant offered and the landlord accepted the rent for the months of April, May and thereafter. The question is whether this by itself constitute an act on the part of the landlord showing an Intention to treat the lease as subsisting. In our view, mere acceptance of rent did not by itself constituted an act of the nature envisaged by Section 113, Transfer of Property Act showing an Intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted rent which was being paid to him by the tenant It cannot, therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the practice followed by courts is to permit the landlord to receive each month by way of compensation for the use and occupation of the premises, an amount equal to the monthly rent payable by the tenant. It cannot, therefore, be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so Intended. In the instant case, we find no other fact or circumstance to

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support the plea of waiver. On the contrary the filing of and prosecution of the eviction proceeding by the landlord suggests otherwise.

A somewhat similar situation arose in the case reported in Shanti Prasad Devi vs Shankar Mahto 2005 (5) SCC 543. That was a case where the landlord accepted rent even on expiry of the period of lease. A submission was urged on behalf of the tenant in that case that Section 116, Transfer of Property Act was attracted and there was a deemed renewal, of the lease. Negativing the contention, Court observed that mere acceptance of rent for the subsequent months in which the lessee continued to occupy the premise even, after the expiry of the period of the lease, cannot be said to be a conduct signifying his assent to the continuing of the lease even after the expiry of the lease period. Their Lordships noticed the conditions incorporated in the agreement itself, which provided for renewal of the lease and held that those conditions having not been fulfilled, the mere acceptance of rent after expiry of period of lease did not signify assent to the continuance of the lease.

Supreme Court in Sheela and others vs. Firm Prahlad Rai Prem Prakash, AIR 2002 SC 1264 Section 116 of the Evidence Act embodies therein a rule of estoppel. No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property. This estoppel so long as it binds the tenant excludes the tenant from raising a plea disputing the title of his landlord at the commencement of the tenancy. It flows as a corollary therefrom that the proof of landlord-tenant

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relationship tantamounts during the continuance of tenancy to proof of ownership of landlord over the tenancy premises at the beginning of the tenancy so far as the tenant is concerned. It is significant to note that on the phraseology of Section 116 of the Evidence Act the rule of estoppel applies so long as the tenancy is not terminated and the rule estops the tenant from laying challenge to the ownership of the landlord at the commencement of the tenancy. But the rule of estoppel as incorporated in Section 116 is not exhaustive and it may be extended or suitably modified in its application to other situations as well, retaining the basic feature of the rule. Clause (g) of Section 111 of the Transfer of Property Act, insofar as relevant for our purpose, provides that a lease of immovable property determines by forfeiture in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself. …….. After the creation of the tenancy if the title of landlord is transferred or devolves upon a third person the tenant is not estopped from denying such title. However, if the tenant having been apprised of the transfer, assignment or devolution of rights acknowledges the title of transferee either expressly or by paying rent to him, the rule of estoppel once again comes into operation for it is unjust to allow tenant to approbate and reprobate and so long as the tenant enjoys everything which his lease purports to grant how does it concern him what the title of the lessor ……… A denial of title which falls foul of the rule of estoppel contained in Section 116 of Evidence Act is considered in law a malicious act on the part of the tenant as it is detrimental to the interest of the landlord and does no good to the lessee himself. However, it has to be borne in mind that since the consequences of applying the rule of determination by forfeiture of tenancy as a result of denial of landlord's title or disclaimer of tenancy by tenant are very serious, the denial or disclaimer must be in clear and unequivocal terms.

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In M/s. Raptakos Brett & Co. Ltd. v. Ganesh Property, AIR 1998 SC 3085, the Supreme Court held that when a lease comes to an end by efflux of time, or by notice of termination, or if there be a breach and the lessee's rights are forfeited, the lessee becomes a tenant at sufferance, and it becomes the duty of the lessee under Section 108(q) of the Transfer of Property Act to restore possession to the lessor forthwith. The Supreme Court held as under:- "22. ...Under law the erstwhile landlord is entitled to restoration of possession by enforcement of statutory obligation of the erstwhile tenant as statutorily imposed on him under Section 108(q) read with Section 111(a) of the Property Act..." In C. Albert Morris v. K. Chandrasekaran, (2006) 1 SCC 228, the Supreme Court held as under:- "26. ...Much argument was advanced on the receipt of the rent by the landlord after the cancellation of the lease. The consensus of judicial opinion in this country is that a mere continuance in occupation of the demised premises after the expiry of the lease, notwithstanding the receipt of an amount by the quondam landlord, would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in possession..." "32. ...We are, therefore, of the opinion that mere acceptance of rent by the landlord, the first respondent herein, from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer on the erstwhile tenant the status of a tenant or a right to be in possession...” In Har Charan Singh v. Shiv Rani, AIR 1981 SC 1284, the Supreme Court held that a presumption of service can be drawn under Section 27 of the General Clauses Act, 1897 and Section 114(f) of the Indian Evidence Act,

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1872. The observations of the Supreme Court are reproduced hereunder:"7. Section 27 of the General Clauses Act, 1897 deals with the topic 'Meaning of service by post' and says that where any Central Act or Regulation authorises or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting it by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. The section thus arises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, pre-paying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgement due is received from the addressee or not. It is obvious that when the section raises the presumption that the service shall be deemed to have been effected it means the addressee to whom the communication is sent must be taken to have known the contents of the document sought to be served upon him without anything more. Similar presumption is raised under Illustration (f) to Section 114 of the Indian Evidence Act whereunder it is stated that the Court may presume that the common course of business has been followed in a particular case, that is to say, when a letter is sent by post by pre-paying and properly addressing it the same has been received by the addreseee. ...It would, therefore, be reasonable to hold that when service is effected by refusal of a postal communication the addressee must be imputed, with the knowledge of the contents thereof and in our view, this follows upon the presumptions that are raised under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act."

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In M/s Madan and Co. v. Wazir Jaivir Chand, AIR 1989 SC 630, the Supreme Court held that a notice sent by registered post is presumed to have been delivered to the addressee under Section 27 of the General Clauses Act. The observations of the Supreme Court are reproduced hereunder:- "6. ...All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgement due or otherwise) containing the tenant's correct address. Once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under Section 27 of the General Clauses Act. Under the rules of the post office, the letter is to be delivered to the addressee or a person authorised by him. Such a person may either accept the letter or decline to accept it. In either case, there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by, the addressee... In this situation, we have to choose the more reasonable, effective, equitable and practical interpretation and that would be to read the words "served" as "sent by post", correctly and properly addressed to the tenant, and the word "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter. No other interpretation, we think, will fit the situation as it is simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by, the tenant." In Nopany Investments (P) Ltd. v. Santokh Singh (HUF), 2008 (2) SCC 728, the Supreme Court held that filing of suit is itself a notice to quit on the tenant and therefore, no notice to quit under Section 106 of the Transfer of Property Act is necessary to enable the landlord to get the decree of possession. The observations of the Supreme Court are reproduced hereunder:- ―In any view of the matter, it is well settled that filing of an eviction suit under the general law itself is a notice to quit on the tenant.

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Therefore, we have no hesitation to hold that no notice to quit was necessary under Section 106 of the Transfer of Property Act in order to enable the respondent to get a decree of eviction against the appellant.” In Shri Ram Pasricha v. Jagannath, AIR 1976 SC 2335, the Supreme Court held that in a suit for eviction, the tenant is estopped from questioning the title of landlord. The Supreme Court held as under:- "15. ...The tenant in such a suit is estopped from questioning the title of the landlord under Section 116 of the Evidence Act. The tenant cannot deny that the landlord had title to the premises at the commencement of the tenancy. Under the general law, in a suit between landlord and tenant, the question of title to the leased property is irrelevant. It is, therefore, inconceivable to throw out the suit on account of non-pleading of other co-owners as such." In Mohammad Ahmad v. Atma Ram Chauhan, (2011) 7 SCC 755, the Supreme Court observed that the motivation of the tenant to litigate with the landlord is that he doesn‟t want to pay the prevalent market rate of rent to the landlord and continues to pay the rent fixed years ago. The observation of the Supreme Court is as under:- "1. .... One half of the lis between landlord and tenant would not reach courts, if tenant agrees to pay the present prevalent market rate of rent of the tenanted premises to the landlord. In that case landlord would also be satisfied that he is getting adequate, just and proper return on the property. But the trend in the litigation between landlord and tenant shows otherwise. Tenant is happy in paying the meager amount of rent fixed years ago and landlord continues to find out various grounds under the Rent Acts, to evict him somehow or the other...”

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