Calcutta High Court
Renuka Seal And Ors. vs Sabitri Dey And Ors. on 24 August, 2007
Equivalent citations: AIR2008CAL75, (2007)3CALLT322(HC), 2007(4)CHN548, (2007) 3 CALLT 322, AIR 2008 CALCUTTA 75, 2008 (2) AJHAR (NOC) 564 (CAL), 2008 A I H C (NOC) 474 (CAL), (2008) 1 ICC 593, (2007) 4 CAL HN 548, (2008) 1 CAL LJ 338, 2008 (2) AJHAR (NOC) 564 (CAL.) = AIR 2008 CALCUTTA 75, 2008 (4) AKAR (NOC) 520 (CAL.) = AIR 2008 CALCUTTA 75 2008 AIHC (NOC) 474 (CAL.) = AIR 2008 CALCUTTA 75, 2008 AIHC (NOC) 474 (CAL.) = AIR 2008 CALCUTTA 75
Author: Jyotirmay Bhattacharya
Bench: Jyotirmay Bhattacharya
JUDGMENT Jyotirmay Bhattacharya, J.
1. This appeal is directed against the judgment and decree dated 31st March, 2004 passed by the learned Judge, Second Bench, City Civil Court at Calcutta in Title Suit No. 1942 of 2000 at the instance of the defendants/appellants.
2. The plaintiffs/respondents filed a suit for recovery of khas possession of the suit shop room located in the ground floor of premises No. 40, Garanhatta Street, Calcutta from the defendants/appellants on expiry of lease by efflux of time.
3. A decree for damages for illegal use and occupation of the suit shop room on and from 1st day of Ashar 1407 B.S. to 27th day of Kartick 1707 B.S. at the rate of Rs. 3/- per diem and a further decree for mesne profit on and from the date of filing of suit until recovery of khas possession of the suit premises, were also sought for incidentally against the defendants in the said suit.
4. Admittedly by a registered deed of lease executed between the predecessor-in-interest of the plaintiffs/respondents, viz., Kanailal De on the one part as lessor and Narayan Chandra Seal, Benimadhav Seal and Kalikrishna Seal on the other part as lessees, the suit shop room was demised to the said lessees collectively for a period of 21 years commencing from the 1st day of Ashar, 1376 B.S. at rental of Rs. 105/- per month payable to the lessor according to Bengali Calendar month on or before the 15th day of each succeeding month for which such rent would become due and payable.
5. The terms and conditions, on which the suit shop room was let out to the said lessees, were incorporated in the said lease deed. Some of the terms and conditions which are relevant here for the purpose of consideration of this appeal, are set out hereunder:
1. The Lessees doth hereby covenant with the lessor as follows:
(a) ...
(g) In case of default of non-payment of rent for three months or breach of covenants for any of the Clauses of the lease, the lessor shall be entitled to terminate the lease earlier and to re-enter the premises.
(h) ...
(i) To bear the proportionate share of the increased occupiers' share of tax that is to say if there be any increase of Municipal rates and taxes during continuance of the lease that is to say rent being Rs. 105/- per month on such rental basis Corporation tax at present 18 1/2 % thereon but if this 18 1/2% slab be increased during continuance of this lease then in such circumstances, the lesses shall pay half of the difference amount of such increased amount of tax proportionately.
j) ...
(k) ...
The Lessor hereby covenants with the Lessees as follows:
(a) The Lessees paying the rents hereby reserved and observing fulfilling and performing all the several covenants conditions, obligations and stipulations herein contained and on their part to be fully paid observed fulfilled and performed shall peaceably hold and enjoy the demised room during the said period of twenty one years subject to Lessees' option for renewal for a further period of ten years as hereafter appearing without any interruption by the Lessor or by any person or persons claiming through under or in trust for him.
(b) ...
...
5. That on the expiry of the period of this lease the lessees shall have option to renew the lease for a further period of ten years upon fulfilment of the terms and conditions hereof. In case of such renewal there shall be increased of monthly rent by 10% on the basis rent of Rs. 105/- per month.
6. The arrangement which was so made between the lessor and the lessees in respect of the suit shop room in the said lease deed dated 25th June, 1969 continued smoothly without any trouble and/or disturbance and/or interruption till first week of February, 1978. Trouble started amongst the lessees and/or their heirs with regard to the use and enjoyment of their various properties including their business at the suit shop room and ultimately the said disputes were resolved amicably between them by a registered deed of partition which was executed by the said lessees and/or their heirs including their other co-sharers on 8th February, 1978 whereby the joint properties of the lessees including their other co-sharers on 8th February, 1978 whereby the joint properties of the lessees including their business at the suit shop room were partitioned amongst them.
7. The arrangement which was made amongst the lessees and/or their heirs in the said partition deed with regard to the suit shop room is relevant for the consideration of the dispute involved in this appeal and as such the relevant part of the said deed is set out hereunder:
And it is hereby agreed by and between the parties hereto of the First and Third parts that they and each of them shall give their consent to the change of name of tenancy in respect of the shop room at No. 40, Garanhatta Street, Calcutta which at present stands in the name of the parties hereto of the Second Part, Third Part and the said "Narayan Chandra Seal deceased in favour of the party of the second part without any objection whatsoever. In the event of the landlord of the said premises No. 40, Garanhatta Street, Calcutta declining to effect change of tenancy in respect of the said shop room in favour of the Second Party, the tenancy shall continue in the names of the parties hereto of the Second Part, Third Part and the said Narayan Chandra Seal and the Second Party shall continue to pay the monthly rents and other impositions to the landlord in respect of the said room and the said First and Third Parties hereto shall not claim any right of tenancy against the second part hereto in respect of the said shop room and the first and third parties hereto further agree that they shall give their consent to the change of trade licence in favour of the Second Party in respect of 'Aukhoy Library' which is allotted to the Second Party without any objection whatsoever."
8. The said arrangement in the partition deed makes it clear that the leasehold right in the said suit shop room was given to the party of the second part, viz., Benimadhav Seal who was one of the lessees in respect of the said shop room. Subsequently, on request made by the said Benimadhav Seal since deceased, the original lessor accepted the said Benimadhav Seal as a sole lessee in terms of the said deed of lease. Since then the lessor started issuing rent receipt in respect of the said tenancy to the said Benimadhav Seal alone, with the consent of the other two lessees and/or their heirs in furtherance of the provisions of the deed of partition dated 8th February, 1978.
9. During the continuance of the lease, the said Benimadhav Seal died and his heirs and heiresses became the lessees in respect of the said leasehold shop room under the original lessor. Subsequently the original lessor also died leaving behind the plaintiffs/respondents herein as his heirs and heiresses and thus the plaintiffs/respondents herein became the lessors of the defendants/appellants in respect of the leasehold suit shop room under the same terms and conditions as contained in the registered deed of lease dated 25th June, 1969.
10. The defendants/appellants (lessees), however, did not vacate the suit shop room on the expiry of the original lease period. Rather they continued to possess the said suit shop room in exercise of the option of renewal of the said lease for a further period of ten years on payment of enhanced rate of rent, as provided in the registered lease deed itself.
11. The lessors having no option to refuse such renewal, accepted the enhanced lease rent from the lessees and allowed them to continue their tenancy in respect of the said suit shop room for a further period of ten years as per the said renewal Clause contained in the said lease deed. But, when the lessors filed a suit for eviction against the lessees on expiry of lease by efflux of time after 31 years from the date of commencement of the lease, the lessees took two-fold defences in their written statement in the said suit.
12. Firstly, the lessees contended that with the alteration of the original lessees and by acceptance of Benimadhav Seal as the sole lessee of the suit shop room in pursuance of the partition deed dated 8th February, 1978 amongst the lessees, the lease deed dated 25th June, 1969, was deemed to have been surrendered and Benimadhav became a direct tenant under the plaintiff and his tenancy is governed by the provisions of the West Bengal Premises Tenancy Act.
13. The second contention of the defendants/appellants is that in the absence of any registered lease deed for renewal, the lease created on the basis of the lease deed dated 25th June, 1969, cannot be deemed to have been renewed in terms of the renewal Clause as provided in the lease deed, notwithstanding their continuation of possession even after the expiry of the lease period of 21 years on payment of enhanced rent as per the renewal clause.
14. For considering the first defence of the defendants/appellants, one material fact which has a great relevance in the facts of the instant case, cannot be lost sight of. The said fact is that even after the change of the lessee in furtherance of the provisions contained in the said deed of partition amongst the original lessees dated 8th February, 1978, both the lessors as well as the present lessees and/or their predecessor-in-interest took it as granted that the terms and conditions of the said lease are binding upon the lessors and the lessees. In fact, the parties to the suit all-through-out accepted that the tenancy of the said suit shop room is governed by the terms and conditions contained in the lease deed dated 25th June, 1969 and accordingly they regulated their respective obligations in respect of the suit shop room as per the provisions of the said lease deed and paid rent accordingly.
15. This Court has found that even after the change of lessees, the lessor filed a suit for eviction against the lessees on the ground of forfeiture of the lease dated 25th June, 1969 due to non-payment of rent for certainperiod as per the said lease deed, in 1987. Such suit which was filed prior to the expiry of the original lease period of 21 years, was ultimately withdrawn on compromise even after the expiry of the original lease period of 21 years in 1995, upon payment of the entire arrear rent at the rate as provided in the said lease deed by the lessees to the lessors.
16. In fact, alteration of the lessees was made on the request of the lessees to respect the arrangement made amongst the lessees in their partition suit. Such alteration brought a change with regard to the relationship of lessor and lessees due to surrender of lease by two of such lessees without disturbing the relationship of lesser and lessor between the original lessor and Benimadhav Seal who continued to enjoy the demised shop room as sole lessees thereof as per the said lease deed. Surrender of lease by some of the lessees in pursuance of an arrangement amongst the lessees, is not unknown in law. Thus, this Court finds that the first defence is very feeble, faint and unworthy of acceptance.
17. Thus for all practical purpose, this Court finds that even after the expiry of the original lease period of 21 years, the parties to the lease very consciously accepted the continuation of the said lease pursuant to the renewal Clause contained in the said lease deed. After enjoying the said leasehold shop room for the entire period of 31 years (i.e., the original period of 21 years plus renewal period of 10 years), the defendants/appellants took a stand in their defence in the said suit that after the expiry of the original lease period of 21 years, they became a monthly tenant by holding over as no registered lease deed was executed between the parties subsequently pursuant to the renewal Clause for their extended period of stay in the suit property after the expiry of the original lease period of 21 years.
18. The learned Trial Judge on examination of the pleadings of the parties as well as the evidences adduced by the respective parties both oral and documentary, came to the conclusion that the original lease dated 25th June, 1969 continued for 31 years (i.e., 21 years being the initial period of lease plus 10 years on account of renewal of the said lease) and the lessors are thus entitled to get a decree for eviction against the defendants/appellants on expiry of the lease of 31 years by efflux of time. Accordingly, the suit was decreed and the defendants/appellants were directed to quit, vacate and deliver khas possession of the suit shop room within three months from the date of the decree. A decree for recovery of arrears of rent in terms of Schedule B and also a decree for damages for illegal occupation on and from 1st day of Ashar 1407 B.S. to 27th day of Kartick 1407 B.S. @ Rs. 3/- per diem and also a decree for mesne profit as prayed for by the plaintiffs/respondents, were also passed in the said suit.
19. The propriety of the said judgment and decree, is under challenge in this appeal.
20. The only question which has been raised by the defendants/appellants seriously in this appeal is as to whether the defendants/appellants became tenants by holding over after expiry of the original lease period of 21 years as they continued to remain in the suit shop room even beyond the lease period of 21 years without renewing the said lease by executing a fresh lease deed pursuant to the renewal Clause contained in the lease deed dated 25th June, 1969. To be more precise, the real question which the Court is required to answer in this appeal is as to whether renewal of the lease can be effected without any registered document?
21. If the Court holds that renewal of lease and/or extension of lease can be effected even without any registered document, then this appeal will fail or the vice versa.
22. Let us now consider the said question in the facts of the instant case with reference to various citations referred to by the learned Counsel of the respective parties in this regard.
23. Mr. Surajit Mitra, learned Counsel, appearing for the defendants/appellants, cited the following three decisions to support his contention that renewal of lease is not possible without any registered document:
(i) Provash Chandra Dalui v. Bishivanath Banerjee,
(ii) Burmah Shell Oil Distributing v. Khaja Midhat Noor and
(iii) Rasiklal M. Mehta v. Hindustan Photo Films Manufacturing Co. Ltd.
24. In all those citations, it was held the concept of renewal of lease and the concept of extension of lease are not synonymous. "To extend" means to enlarge, expand, lengthen, prolong to carry out further than its original limit. In other words, "extension" means enlargement of the main body; addition of something smaller than that to which it is attached; to lengthen or prolong. Thus, extension ordinarily implies the continued existence of something to be extended. But "renewal of lease" means creation of a new lease which creates a fresh right and obligation between the contracting parties. Thus, once a renewed lease comes within the scope of Section 107 of the Transfer of Property Act, such a lease can be made only by registered instrument.
25. Mr. Mitra, thus, submitted that since no registered deed was subsequently made between the parties after the expiry of the original period of lease of 21 years for giving effect to the renewal clause, it cannot be said that the original lease dated 25th June, 1969 continued for a period of 31 years and the said lease has expired by efflux of time after the expiry of the renewed period.
26. Mr. Mitra, thus, contended that since the lessor accepted the lease rent from the lessee after expiry of the original lease period of 21 years without creation of any registered lease deed to give effect to the renewal clause, the learned Trial Judge acted illegally by not holding that the defendants/appellants became tenants by holding over after the expiry of the original lease period of 21 years.
27. To refute such submission of Mr. Mitra, Mr. Roychowdhury, learned Senior Counsel, appearing for the plaintiffs/respondents, cited a decision of our High Court in the case of Ranjit Kumar Dutta v. Tapan Kumar Shaw , wherein the effect of the decision of the Hon'ble Supreme Court in the case of Provash Chandra Dalui (supra) was considered and it was held therein that the legal consequences of continuance of possession of the tenant under the old registered lease for a further period without a fresh deed of lease that is without a fresh registered deed of lease was not considered by the Hon'ble Supreme Court in the said decision.
28. This Hon'ble Court further held that the principle which was laid down by the Hon'ble Supreme Court in the case of Provash Chandra Dalui (supra) cannot apply where the lessee continues in possession under the renewal Clause or extension Clause of the original registered lease in exercise of his unilateral option under the said original lease as there does not arise any question of subsequent assent by the lessor as the right to enjoy for the further period has been conveyed to the lessee itself though in the form of an option of renewal.
29. It was further held therein that in such a situation no question of application of Section 116 of the Transfer of Property Act arises as the said provision applies only after determination of the lease granted to the lessee and if the lessor or his legal representative accept rent from the lessee or under-lessee or otherwise assents to his continuing in possession, the lease is, in absence of an agreement to the contrary, renewed from year to year or from month to month according to the purpose for which the property is leased, as specified in Section 106 of the Transfer of Property Act.
30. As a matter of fact, an earlier Division Bench of this Court in the case of Lalit Mohan Dey v. Satadalbasini Dasi also held that where lessee remained in possession after expiry of the lease for more than the original lease period and paid rent at an enhanced rate as per the terms of a renewal Clause contained in the original lease deed and the lessor accepted the rent, the lessee must be deemed to have remained in possession under the renewal Clause of the lease as person who had exercised the option given to him by the renewal Clause and whose right so to do had been acknowledged by the lessor and acted upon by both parties.
31. In fact, in none of the decisions cited by Mr. Mitra, the effect of continuation of possession by the lessee on payment of enhanced rent as per the renewal Clause under the registered lease for a further period without execution of a fresh deed of lease, was considered. As such, the decisions cited by Mr. Roychowdhury in the case of Ranjit Kumar Dutta (supra) and Lalit Mohan Dey (supra) may be accepted as a safe guideline for deciding the dispute involved in this appeal.
32. In our considered view, renewal of lease can be made only through a bilateral process, as renewal cannot be effected unless one exercises the option pursuant to the renewal Clause and the other accepts such proposal for renewal. We very often find that the parties are also required to settle their new terms and conditions before renewal of the lease. Of course, it cannot be denied that renewal can also be made on the terms and conditions already agreed upon between the parties in the original registered lease deed. But in any event, when renewal is effected by a bilateral process on fresh terms and conditions to be settled between the parties after the expiry of the original lease period, it creates a new lease creating fresh relationship between the parties and under such circumstances it requires registration of a deed for renewal of lease.
33. The extension of lease, however, can be made through an unilateral process, inasmuch as, such extension is made on the option of one of the parties to the lease, as the party on the other part had and/or has no option but to accept the option for renewal exercised by the said party and to extend the said lease as per the provisions contained in the original registered lease deed.
34. The decision which was cited by Mr. Mitra in the case of Burmah Shell Oil Distributing (supra), cannot be accepted as a safe guideline for determining the instant case without ascertaining the nature of the agreement entered into between the parties to the said lease regarding the option of renewal. Though it was mentioned in the said decision that the lease agreement therein contained a renewal clause, but still then whether such renewal could have been effected bilaterally or unilaterally, cannot be ascertained as the said relevant Clause was not set in the said judgment. Thus, without ascertaining the actual agreement between the parties regarding renewal of the lease, this Court cannot accept the principle laid down therein as a safe guideline for determination of the dispute involved in this appeal.
35. The facts of the instant case is akin to the concept of extension of lease though the expression renewal was loosely used in Clause (5) of the said registered lease deed dated 25th June, 1969. In fact, the said renewal Clause makes it clear that once the option for renewal is exercised by the lessee and the lessee agrees to pay the rent at an enhanced rate as per the provision contained in the said clause, the lessors are left without any discretion but to accept such option and to renew the said lease for a further period of ten years.
36. In fact, the rent receipts exhibited in the suit show that the defendants/appellants paid rent at the enhanced agreed rate as mentioned in the renewal Clause of the original registered lease deed to the plaintiffs/respondents.
37. Under such circumstances, this Court holds that the original lease which was limited for a period of 21 years was extended for a further period of ten years as per the agreement contained in Clause 5 of the said lease deed and thus, the said lease continued for a period of 31 years.
38. This Court, thus, does not find any reason to differ from the conclusion which was arrived at by the learned Trial Judge regarding the entitlement of the plaintiffs/respondents to obtain a decree for eviction against the defendants/appellants on expiry of the lease by efflux of time as well as the consequential reliefs which were granted by the learned Trial Judge in the decree.
39. Before parting with, this Court also feels it necessary to consider the effect of the rent receipt granted by Mr. R.N. Basak, learned Advocate on behalf of the lessor dated 30th September, 1986, wherein it was mentioned that statutory interest at the rate of 8 1/3% was also realised on the arrear rent for the period from Jaisthya 1390 B.S. upto Bhadra 1393 B.S. from the lessees.
40. Mr. Mitra laid much stress on the said receipt to support his contention that when the lessor accepted the interest at the statutory rate of 8 1/3 % on such arrear rent, the plaintiff accepted the defendants as monthly tenants and such tenancy is governed by the provision of the West Bengal Premises Tenancy Act.
41. We, however, do not find much substance in such submission of Mr. Mitra firstly for the reason that Lessor's right of realisation of interest on arrear rent by the landlord is recognized under Section 114 of the Transfer of Property Act and lastly for the reason that the defendants/appellants paid rent at the enhanced rate as per the renewal Clause contained in the registered lease deed after expiry of the original lease period under the registered lease deed dated 25th June, 1969.
42. The rent receipts exhibited in the said suit show that the defendants/appellants were habitual defaulters. Though the said defendants/appellants could not pay such a meagre amount of the lease rent regularly even after compromise of the earlier suit of 1987, still then, the plaintiffs/respondents did not exercise their right of re-entry for the subsequent defaults and in fact allowed the defendants/appellants to enjoy the full term of 31 years of lease uninterruptedly.
43. Considering such kindness and/or long endurance on the part of the plaintiffs/respondents, the defendants/appellants, in our view, ought not to have taken such a defence of creation of a monthly tenancy by way of holding over, after enjoying the suit shop room for the full term of 31 years of long lease uninterruptedly and thereby prolonging this litigation for such a long duration with such vexatious defence.
44. In the facts and circumstances, as stated above, we fully agree with the findings arrived at by the learned Trial Judge in the impugned judgment and we do not find any reason to interfere with the judgment and decree with the learned Trial Judge.
45. The judgment and decree of the learned Trial Judge is, thus, hereby affirmed. This appeal, thus, stands dismissed.
46. Urgent xerox certified copy of this judgment, if applied for, be supplied expeditiously after complying with formalities.
Alok Kumar Basu, J.
I agree.
Later On:
24.08.2007 F.A. No. 287 of 2004 Appearance Same as Above
47. Let the Lower Court records be sent down to the Court below immediately.
48. On the submission of the learned Advocate for the appellant, we direct that there will be a stay of our judgment for a period of six weeks.