Bombay High Court
Shriniwas Govind Mudholkar vs Dattatraya Mahadeo Ranade And Ors. on 27 January, 1987
Equivalent citations: 1987(3)BOMCR681
JUDGMENT H.W. Dhabe, J.
1. This is an appeal by the plaintiff landlord against the concurrent orders of the Courts below dismissing the suit filed by him.
Briefly the facts are that the appellant original plaintiff No. 1 and the respondent No. 3 i.e. his son filed a suit for possession of the suit land against the respondents No. 1 and 2. According to the plaintiff No. 1, there was a registered agreement of lease dated 1-11-1958 between him and the defendant 1 for 10 years and that the period of lease expired on 31-10-1968. Further according to him, the lease was of an open site for construction of a structure for running a press which structure was constructed on the said site by the defendant No. 1 where he carried on the printing business by installing the press machinery.
2. The defendant No. 1 remained in possession of the suit site even after the expiry of the period of lease. In 1970, the defendant No. 1 lease out the shed constructed by him and the Machinery installed by him to the defendant No. 2. One year after the defendant No. 2 took the lease, he purchased the printing machinery from the defendant No. 1. Thus from 1970, the defendant No. 2 carried on the printing business in the suit premises.
3. It is the case of the plaintiffs that the suit site belonged to the joint family of the plaintiffs and since the defendants were in illegal and unauthorised possession of the same after the expiry of the lease on 30-10-1968, which created a tenancy at will, the defendants were liable to be evicted without giving them a quit notice under section 106 of the Transfer of Property Act. The defendants resisted the suit by filing their written statement. It is the case of the defendants that the defendant No. 2 himself was a tenant of the suit site because he was inducted on the suit site as a tenant in the presence and with the consent of the plaintiff No. 1. It is also their case that at any rate the defendant No. 1 continued to be the tenant of the suit site by holding over because the plaintiff No. 1 accepted the rent from the defendants and even otherwise, assented to continuance of his tenancy. The defendants also raised a plea that the provisions of the C.P. & Berar Letting of Houses and Rent Control Order, 1949 (for short the Rent Control Order) were applicable to the suit premises and in the absence of the permission of the Rent Controller, the instant suit was not maintainable.
4. The learned trial Court held on the basis of the evidence on record that the suit premises were governed by the provisions of the Rent Control Order and hence in the absence of permission from the Rent Controller, the suit was not maintainable. He also held that the defendant No. 1 was a tenant by holding over in accordance with the provisions of section 116 of the Transfer of Property Act, and, therefore, notice under section 106 of the Transfer of Property Act (for short the T.P. Act) was necessary to be given which could only be done by first obtaining the permission of the Rent Controller under the Rent Control Order. He however, held that the defendants have failed to establish that the defendant No. 2 was directly the tenant of the plaintiff No. 1.
5. The learned trial Court in view of his finding that the Rent Control Order was applicable so that the permission of the Rent Controller was necessary for terminating the tenancy of the defendant No. 1 who was held to be a tenant by holding over thus requiring the notice under section 106 or the T.P. Act for determining his tenancy, dismissed the suit filed by the plaintiffs. The plaintiff preferred an appeal in the District Court at Akola which was heard by the Second Extra Assistant Judge, Akola. The learned lower Appellate Court answered all the issues in favour of the defendants including the issue that the defendant No. 2 was directly tenant of the plaintiffs. He thus affirmed the judgment and decree of the learned trial Court dismissing the suit filed by the plaintiffs. Being aggrieved, the plaintiff No. 1 has preferred the instant second appeal in this Court.
6. At the time of admission of the instant second appeal, two substantial questions of law were framed by this Court. The first substantial question of law is whether the provisions of the Rent Control Order are applicable to the suit premises so that it was necessary for the plaintiff No. 1 to obtain permission of the Rent Controller before determining the lease in the instant case. The second question of law framed by this Court is whether on the facts and circumstances in the instant case, the defendant No. 2 can be said to be the tenant of the plaintiff No. 1. At the time of hearing of the second appeal, on the last date of hearing, it was pointed out by the learned Counsel for the plaintiff No. 1 that even if it is held that the defendant No. 2 was not the tenant of the plaintiff No. 1 directly, it would not be itself give any relief to the plaintiff No. 1, because the finding of the Courts below was against him that the defendant No. 1 was a tenant of the suit premises by holding over and that a notice to him in accordance with section 106 of the T.P. Act was necessary. This would be so even if the first question about the applicability of the Rent Control Order was answered in his favour.
7. The learned Counsel for the plaintiff No. 1, therefore, sought for time and filed an application. Civil Application No. 245 of 1987 for framing an additional question of law as formulated by him in the paragraph No. 6 of the said application, which according to him, is also a substantial question of law. The question which he seeks to raise is :
"Whether any notice at all, terminating the tenancy of defendants Nos. 1 and 2 or alternatively defendant No. 2, is necessary".
According to him, the above question is necessary to be framed for fairly and effectively deciding the controversy in the instant appeal. In my view, in the interest of justice and for fairly and effectively deciding the controversy in the instant appeal, the question sought to be raised by the plaintiff No. 1 in para 6 of the aforesaid application which is also a substantial question of law, needs to be decided in the instant appeal. I, therefore, allow the said application so that the substantial question of law contained in para 6 therein can be considered and decided on this appeal.
8. The first question which needs consideration in this appeal is whether the provisions of the Rent Control Order are applicable to the suit premises. It is not in dispute that the lease in the instant case as per the agreement of lease dated 1-11-1968 (Ex. 22) is for an open site. The learned Courts below have, however, held that the open site under the agreement of lease was appurtenant to the house belonging to the plaintiff No. 1 and, therefore, in view of the definition of the expression "house" given in Clause 2(2) of the Rent Control Order, the provisions of the Rent Control Order were applicable in the instant case.
9. The learned Counsel for the plaintiff No. 1 had urged before me that the above view taken by the Courts below is erroneous in law. According to him, what is postulated in the Rent Control Order is the lease of the house, which means a building whether residential or non-residential. Further according to him, when there is a lease of such a houses, then only by the inclusive part of Clause 2(3) of the expression "house" the open land appurtenant to can be the subject matter of the Rent Control Order, if no lease of the building or part of the building is granted. In support of his contention, he has relied upon a decision of the Supreme Court in the case of Jagat Ram Sethi v. Rai Bahadur, and also the decisions of this court in the case of Hashmatrai v. Tarachand, 1978 Mh.L.J. 780.
10. The learned Counsel for the defendants, however, urged that if I am inclined to decide in his favour on the question of necessity of a notice under section 106 of the T.P. Act. I should not render a finding on the issue about the applicability of the Rent Control Order. In my view, since the learned Courts below held and rendered a positive finding on this question, it is necessary to decide the same. The decisions relied upon on behalf of the plaintiff No. 1 do support his contention. It is only when there is a lease of a building or a part of the building that the provisions of the Rent Control Order are applicable to such a building or a part of the building including the open space appurtenant to it, but the lease simplicitor of the open site even though appurtenant to any building or a part of the building cannot be and is not the subject matter of the Rent Control Order. The finding of the learned Courts below in this regard has, therefore, to be set aside. It has therefore, to be held that the provisions of the Rent Control Order would not be applicable to the suit premises because the lease is of open site only.
11. The next question that arises for consideration is whether the defendant No. 1 can be said to be a tenant of the plaintiff No. 1 from the facts and the circumstances on record in the instant case. In this regard, it is necessary to see that the learned trial Court rendered a finding that the defendant No. 1 is not the tenant of the plaintiff No. 1 in respect of the suit site. However, the learned lower appellate Court held on the basis of certain letters written by the plaintiff No. 1 to the defendant No. 1 and in view of the acceptance of rent from the defendant No. 2 as evidenced by the rend receipts, that the defendant No. 2 was his tenant.
12. A perusal of the rent receipt Ex. 50, issued on 2-11-1972 by the plaintiff No. 1, shows the name of the tenant as D.N. Ranade, proprietor, Asha mudranalaya. It is clear from the said rent receipt Ex. 50 that the rent is received through the Manager Shri Patki in cash. Ex. 56 is another rent receipt in which also the defendant No. 2 is described as the manager through whom the rent is received by cheque. It is thus clear from the aforesaid rent receipts that the plaintiff No. 1 landlord has described the defendant No. 2 as the manager and not as a tenant or a sub-tenant. On the contrary, those rent receipts show the name of the defendant No. 1 as a tenant of the suit site. It is also clear from the rent receipts above mentioned that the rent is paid for and on behalf of the defendant No. 1 by the defendant No. 2. These rent receipts therefore would not show that the plaintiff No. 1 accepted the defendant No. 2 as the tenant of the suit site.
13. The learned lower Appellate Court has relied upon the letter dated 13-1-1975 (Ex. 55) to hold that the defendant No. 2 was accepted as the tenant by the plaintiff No. 1 and the defendant No. 1 was authorised by him to collect rent from him. In my view, the inference drawn by the learned lower Appellate Court from the letter dated 13-1-1975 (Ex. 55) is utterly perverse. Although it is true the said letter does show that there were some talks with the defendant No. 2 about enhancement of rent, it does not indicate that the plaintiff had accepted the defendant No. 2 as his tenant. It should be seen that the above letter needs to be construed in the light of the following facts and circumstances on record in the instant case. It is not in dispute that in the year 1970, the defendant No. 2 was inducted on the suit site. In fact, it is established that he had purchased the press machinery and was running the press in the name of Asha Mudranalaya. What the above letter Ex. 55 therefore establishes is the fact that the defendant No. 2, who was actually running the business of press was known to the plaintiff No. 1 and that the defendant No. 1 had inducted him upon the suit premises.
14. The question, however, is whether there was any privity of contract between the plaintiff No. 1 and the defendant No. 2. By no stretch of imagination on the basis of the evidence on record in the instant case it can be held that there was any privity of contract between the plaintiff No. 1 and the defendant No. 2 so as to create a direct lease of the suit premises between them. The best evidence in the instant case would be the rent receipts issued after the defendant No. 2 was inducted on the suit site, which in unmistakable terms show the defendant No. 1 as the lessee of the suit site and the defendant No. 2 as merely a manager and not even the sub-leasee. It may, however, be stated that in his evidence the plaintiff No. 1 has accepted that the defendant No. 2 was a sub-leasee. The finding rendered by the learned lower Appellate Court that the defendant No. 2 was directly the tenant of the plaintiff No. 1 in respect of the suit site is, therefore, perverse and is liable to be reversed.
14-A. The next question which to be considered is whether any notice terminating the tenancy of the defendants 1 and 2 was necessary to be given. In this regard the basic question which needs consideration is whether the defendant No. 1 was a tenant holding over within the meaning of section 116 of the T.P. Act if so, upon what terms and conditions. The requirements of the tenancy by holding over under section 116 of the T.P. Act are considered by the Supreme Court in the case of Bhawanji & others v. Hinmmatlal & others, A.I.R. 1972 at S.C. 119 : see para 9). It is not disputed that the period of lease expired in the instant case on 31-10-1968. It cannot also be disputed that the defendant No. 1 remained in actual possession of the suit site until he created the sub lease in favour of the defendant No. 2 in the year 1970 whereafter it is the defendant No. 2 who was in actual possession of the suit site.
15. The learned Counsel for the plaintiff No. 1 has urged that since the defendant No. 1 was not in actual possession of the suit site, section 116 of the T.P. Act is not of any assistance to him for renewal of his tenancy by holding over. As already pointed out, the defendant No. 1 was in actual possession as a fact after the expiry of the lease until the sub-lease was created in the year 1970. It is not in dispute that the rent for the said period from 31-10-1968 till 1970 when the sub-lease was created in favour of the defendant No. 2 is received by the plaintiff No. 1 from the defendant No. 1. The provisions of section 116 of the T.P. Act would, therefore, be clearly attracted even assuming that it was necessary for the tenant to remain in actual physical possession of the site lease out to him.
16. The learned Counsel for the plaintiff No. 1 in support of his contention has relied upon a decision in the case of Smt. Shanti Devi v. Anil Kumar, A.I.R. 1981 S.C. 1550. However, no question of interpretation of section 116 of the T.P. Act arose in the above case as in that case there was no pleadings under section 116 of the T.P. Act and the tenancy by holding over was not claimed. The above contention on behalf of the plaintiff No. 1 deserved to be rejected since the defendant No. 1 was in actual or physical possession of the suit premises and also paid rent as shown above.
17. In the instant case the fact that the defendant No. 2 was a sub-leasee is admitted by the plaintiff No. 1 in his evidence. Therefore, the possession of the defendant No. 1 of the suite site was through his sub leasee, the defendant No. 2, after the sub-lease was created in 1970. Prior to that, as shown above, the actual possession was of the defendant No. 1 after the expiry of the lease. The rent for the suit premises was paid by the defendant No. 1 after expiry of the period of lease on 31-10-1968 which fact is proved by the rent receipts Exs. 50 and 56. Even otherwise the correspondence between the plaintiff No. 1 and defendant No. 1 Exs. 50 to 55 would clearly show that the plaintiff No. 1 has consented to the lease of the defendant No. 1 after expiry of the initial lease as from time to time he has claimed from him the enhanced rent. The requirements of section 116 of the T.P. Act are thus clearly satisfied and it has, therefore, to be held that the defendant No. 1 continued as a tenant of the plaintiff No. 1 even after the expiry of the lease i.e. even after 31-10-1968.
18. It is, however, urged on behalf of the plaintiff No. 1 that there is an agreement to the contrary and, therefore, there could not be any holding over within the meaning of section 116 of the T.P. Act. To show that there is an agreement to the contrary, reliance is placed upon the recitals in the lease deed Ex 22 to the effect that it would be open to the sweet will and convenience of the plaintiff No. 1 whether to allow or not to allow the defendant No. 1 to remain on the land after the expiry of the period of lease. The recitals in the lease-deed which are relied upon are as follows :
"If I am allowed to remain on the land as a tenant, I would executed a new rent note but that will solely depend upon the sweet will of the plaintiff No. 1 and if there is no new agreement about the lease, we would dispose of the structure constructed by us through your if the price is agreed upon and if I desire to vacate the suit land I would give you two months' notice. Otherwise, I would be liable for damages."
19. In appreciating the above submission made on behalf of the plaintiff No. 1, it may be seen that the expression "an agreement to the contrary" used in section 116 of the T.P. Act would mean in its proper context an agreement, which settles the terms of the holding over, viz. an express agreement which would determine the duration and the terms of the renewed lease. The recitals in the lease-deed, Ex. 22, do not stipulate any terms about the renewed lease including its duration. The only thing which is indicated in the above recitals is that the defendant No. 1 would executed new a rent note. Therefore, in the absence of any terms being indicated by any express agreement the renewal of lease would be from year to year or from month to month according to the period for which the property is leased as provided in section 106 of the T.P. Act.
20. However, even assuming that the expression, "an agreement to the contrary" used in section 116 of the T.P. Act were to mean that an agreement stipulating express prohibition for the renewal of the lease, no such prohibition can be spelt out from the lease-deed, Ex. 22, in the instant Case. On the contrary, the above recitals in the lease deed show that the lease can be renewed by the plaintiff No. 1. It is true that it also provides that a new rent note should be executed. However, in my view, the above provision is merely procedural and if in fact the conduct of the parties show that the lease is renewed or a new lease is created, then only because no document is executed, it would not mean that no new lease is created between the parties. The conduct of the plaintiff No. 1 is allowing the defendants to remain on the land and in accepting the rent from the defendant No. 1 would show that the lease is created by him in his favour by holding over as provided in section 116 of the T.P. Act. As already pointed out the correspondence between the plaintiff No. 1 and the defendant No. 1, exhibits 51 to 55, would show that the plaintiff No. 1 had consented to the lease of the defendant No. 1 after the expiry of the initial lease as from time he has claimed from him enhanced rent. Therefore, merely because a new rent note is not executed it would not mean that there is no lease created between the parties in the instant case. At any rate, the above recitals in the lease deed do not militate against the creation of lease by holding over. The above contention on behalf f the plaintiff No. 1, therefore, deserves to be rejected.
21. The next question which is urged is that the learned lower appellate Court was in error in holding that the lease was for manufacturing purpose in the instant case. In support of the above contention reliance is placed by the learned Counsel for the plaintiff No. 1 upon the case of Sati Prasanna Mukherjee v. Moh. Fazal, and the case of Kunj Bihar v. Acharya Hari, . In my view, it is not necessary to consider the above question in the instant case because no notice whatsoever as contemplated under section 106 of the T.P. Act is given by the plaintiff No. 1. It may be seen that if the purpose of the lease is manufacturing purpose or the agricultural purpose, then according to section 106 of the T.P. Act, in the absence of the contract to the contrary, the lease is from year to year for which six month's notice for its termination is necessary. Otherwise, the lease is month to month for which a 15 days' notice on the expiry of the lease is necessary to be given. Since there is no notice at all given as required by section 106 of the T.P. Act, the suit must fail on that ground itself.
In the result, the instant second appeal fails and is dismissed. However, in the circumstances there would be no order as to costs in this appeal.