Madras High Court
The Friend-In-Need Society vs M/S. Bharat Petroleum Corporation Ltd on 20 June, 2011
Author: S. Palanivelu
Bench: S. Palanivelu
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 20.06.2011 CORAM THE HONOURABLE MR. JUSTICE S. PALANIVELU C.S.No.59 of 2006 and Tr.C.S.No.1155 of 2009 C.S.No.59 of 2006 The Friend-in-Need Society, Rep.by its Hon. President Mr.H.E.Wilkins ... Plaintiff Vs
1. M/s. Bharat Petroleum Corporation Ltd., by its Territory Manager (Retail), Chennai
2. M/s. Padma Petrol Agency ... Defendants Tr.C.S.No.1155 of 2009 M/s. Bharat Petroleum Corporation Limited, Rep.by its Territory Manager (Retail) V, Nagarajan, No.35, Vaidyanathan Street, Tondiarpet, Chennai 600081. ... Plaintiff vs
1) Friend-in-Need Society, Having its registered office at No.29 Poonamallee High Road, Chennai 600003.
2) G.Sydenham, Hony.President Friend-in-Need Society No.141, Perambur Barracks Road Chenai 600007.
3) Dr.Geoffery K.Francis, Hony.President, Firend-in-Need Society, 29,Poonamallee High Road, Chennai 600003.
4) Gerry F Briggs, Hony Secy, Friend-in-Need Society, 29,Poonamallee High Road, Chennai-600003
5) John W Francis, Hony. Treasurer Friend-in-Need Society, 29, Poonamallee High Road, Chennai 600003.
6) N L C Fernandez, Hony.Secy, Friend-in-Need Society 26, Anderson Street, Ayanavaram, Chennai 600003.
7) E M D Rozzario, Hony.Treasurer Friend-in-Need Society, 18-A Manickem St., Chennai 600012. ... Defendants C.S.No.59 of 2006 is filed under Order II Rules 1 & 3 and Order IV Rule 1 of O.S. Rules and Order VII Rule 1 of C.P.C.
Tr.C.S.No.1155 of 2009 is filed under Order VII Rule 1 of C.P.C.
For Plaintiff : Mr. N.D. Bahetty in C.S.No.59/2006 & for defendants in Tr.C.S.No.1155/2009 For Defendants : Mr. M.V. Krishnan in C.S.No.59/2006 & for plaintiff in Tr.C.S.No.1155/2009 COMMON JUDGMNET
C.S.No.59 of 2006 is filed for a judgment and decree, jointly and severally against the defendants, directing them to quit and hand over vacant possession to the plaintiff, of the suit land; to pay the plaintiff a sum of Rs.70,00,000/- as damages for the illegal use and occupation of the said land commencing from 01.01.2003 onwards till delivery and possession is handed over to the plaintiff @ Rs.2,00,000/- per month and to pass mandatory injunction directing the defendant to remove any buildings, erections, pumps, installations, pipe-lines or any other fixtures/structures erected or placed on the plaint schedule land with costs.
2. Tr.C.S.No.1155 is filed for a judgment and decree for specific performance of the agreement of lease directing the defendants to register the lease for a period of 50 years from 1.1.2002 with an advance of Rs.20 lakhs and for permanent injunction restraining the defendant, its office bearers, men and agents interfering with the peaceful possession and enjoyment of the suit property by the plaintiff with costs.
3. The plaint averments in C.S.No.59 of 2006, in brief, are as follows:-
3.(a) The plaintiff under a Deed of Lease dated 06.03.1996 let out a portion of its vacant land in the northern side its property in Door No.29, Poonamallee High Road, Periamet, Chennai 600003 and on the main Poonamallee High Road, to an extent of 510 sq.metres or 5,490.07 Sq.ft., for a period from 01.01.1993 to 31.12.2002, on a rent of Rs.9,000/- per quarter, equivalent to Rs.3,000/- per month, as agreed and covenanted under Clause 1 of the said Lease Deed to the 1st defendant. The 2nd defendant as the retail out-let agent of the 1st defendant from the plaint schedule land carrying on its business.
3.(b) The basic object of the Plaintiff's society is to relieve the deserving poor and to suppress the mendacity among European and Anglo-Indian Christians of every denomination, providing Home for the aged and destitute in which they are freely lodged, clothed and supplied with the necessaries for health and comfort, allotment of pension, maintenance of workshop for women, establishment of a labour yard for men and women etc.,
3.(c) As the period of lease of the suit land with the 1st defendant was to expire on and with 31.12.2002, and as the plaintiff did not want to renew the said lease, as it wanted to expand its activities of the Home for the aged, destitutes, etc., issued notice through its counsel on 12.11.2002 determined and cancelled the said lease on and with the expiry of 31.12.2002, further calling upon the defendant to quit and deliver vacant possession by then and to also remove any buildings, erections, pumps, installations, pipe-lines or any other fixtures/structures erected or placed on the suit land as contemplated under Clause 4(ii) of the Lease Deed, also further calling upon the 1st defendant to pay a sum of Rs.2,00,000/- per month as damages for the illegal use and occupation of the suit land by the defendants from 01.01.1003 and after the termination of the 1st defendant's said lease.
3.(d) To the said notice dated 12.11.2002, the 1st defendant sent a reply dated 28.11.2002, raising untenable contentions, such as, that the erstwhile president of the plaintiff Dr.G.K.Francis had committed in writing to execute a renewal lease not only of the extent of 5,490.07 sq.ft., but with further additional land of 2,366 sq.ft., total extent being of 7,856.07 sq.ft., from 01.01.2002 for a period of 50 years together with an advance of Rs.20 lakhs to be adjusted against rentals as per the proposition agreed, etc., and to which the plaintiff through its counsel had sent a Rejoinder dated 4.12.2002 denying any such concluded contract of lease and to which no reply was sent by the 1st defendant.
3.(e) The erstwhile president Dr.G.K.Francis, as well as the General Committee then headed by him, were by the order of interim injunction of High Court dated 20.6.2002 were restrained from in any way conveying by way of sale/lease/gift or otherwise any further portion of the plaintiff's premises and the same had also been made absolute by Order dated 30.07.2002, that while there was no finally concluded contract of lease entered into, acted upon, executed and registered by the plaintiff with the 1st defendant and this could not be done in view of the order of injunction by this Court, that even the very proposal to renew the lease of the 1st defendant, leave aside the giving of additional land on lease to the 1st defendant, had been terminated and cancelled by the plaintiff through its Counsel's Notice dated 12.11.2002, that in the General Body Elections held and conducted on 28.09.2002, the said Dr.G.K. Francis and the General Committee headed by him were defeated and rooted out and the newly elected office bearers and the General Committee of the Plaintiff society had assumed office.
3.(f) The plaintiff has received the rent from 1st defendant only upto 31.12.2002 and after the determination and cancellation of the lease, though the 1st defendant after a lapse of over 10 months first defendant sent the alleged rent upto the month of July 2003, the plaintiff through its counsel's letter dated 7.8.2003 refused and returned the amount as it was tendered by way of rent, instead of damages, that thereafter also the plaintiff has not accepted the various amounts sent and tendered by 1st defendant till date, that in the meanwhile the 1st defendant also filed O.S.No.5033 of 2003 against the plaintiff before the City Civil Court, Madras [which is now transferred and renumbered as Tr.C.S.No.1155 of 2009] and that the plaintiff has not received any amount from the Defendants from 01.01.2003 onwards till date and is entitled to damages for the illegal use and occupation of the suit land by the defendants.
4. In the written statement filed in C.S.No.59 of 2006 by the 1st defendant, the following are averred:-
4.(a) The President of the plaintiff society Mr.J.C.Rice had executed the registered lease deed of the suit premises for the fourth time for a term of 10 years from 1.1.1993 and quarterly rent of Rs.7,500/- for first 5 years and Rs.9,000/- thereafter, the President of the Plaintiff Society Dr.G.K.Francis had offered to renew the lease of the suit site with an additional extent of 2366 sq.ft. for a further period of 50 years commencing from 1.1.2002 with an advance of Rs.20 lakhs to be adjusted against the rentals given in their letter dated 31.8.2001, that on the basis of the written commitment the said G.K.Francis had executed a Lease Agreement in favour of the 1st defendant corporation for 50 years from 1.1.2002, that in response to the plaintiff's notice dated 12.11.2002 this defendant sent a reply wherein it was made clear that the 1st defendant are neither liable to pay damages nor their occupation be termed as illegal, that the claim of the plaintiff that by his counsel's notice dated 12.09.2002 the lease in favour of the first defendant had been determined and cancelled is totally untenable and the cancellation is illegal and cannot bind the first defendant, that the further claim of the plaintiff that the 1st defendant has to pay Rs.2 lakhs per month as damages is fanciful and untenable and that the defendant is in no way liable to pay the amount claimed by the plaintiff.
4.(b) Having executed the Lease Agreement for 50 years from 01.01.2002, the plaintiffs are estopped from back tracking their commitments due to their interse disputes within the Plaintiff Society, that once the contract has been concluded between the parties, it is not open to the plaintiff to resile from the terms of contract, that the plaintiffs have no option to comply with the terms of lease agreement with the parties executed on 1.1.2002, that the 1st defendant was not a party to the temporary injunction alleged to have been obtained by the plaintiff from the High Court in C.S.No.396 of 2002, that the order in C.S.No.396 of 2002 does not absolve the plaintiffs from complying with the Lease Agreement executed by the plaintiff with this defendant, that the first defendant is not a party in C.S.No.396 of 2002 and it is not aware of the order said to have been passed in O.A.No.373 of 2002 in C.S.No.396 of 2002 on 20.06.2002 and that at any rate, the injunction order and the subsequent order dated 30.07.2002 making the interim order absolute is not binding on this defendant who was not a party to that suit.
4.(c) There is no valid termination and cancellation of the Lease Agreement dated 01.01.2002 between the plaintiff and the 1st defendant, that in any event, the subsequent office bearers are bound by the Lease Agreement in favour of the first defendant entered into by previous president Dr.G.K.Francis, that due to the inability of the plaintiff to register the lease in view of the proceedings in C.S.No.396 of 2002, the 1st defendant could not effect the rental from 1.1.2003 to June 2003, that the plaintiff neither returned the cheques sent by the First defendant towards rent nor accepted the cheques under protest, that the lease agreement for 50 years from 1.1.2002 with an advance of Rs.20 lakhs was executed by Dr.G.K.Francis in the capacity as the Honorary President of the plaintiffs with an undertaking to include its executors, administrators, legal representatives and assigns in the cause title, that the plaintiff being the successors-in-interest of the former President Dr.G.K.Francis are bound by the lease executed by him granting lease of the suit property to the defendant during his tenure as Honorary President, that the defendants are entitled to the specific performance of the agreement of lease dated 1.1.2002, that any claim contrary made by the plaintiff will be illegal and violate the terms of tenancy agreement between the parties and that the suit may be dismissed with exemplary costs.
5. In the written statement filed by the 2nd defendant, it is stated that he adopted the written statement of 1st defendant.
6. The following are the contents in the plaint in Tr.C.S.No.1155 of 2009 :-
6.(a) The Secretary of the 1st defendant society R.D.Gallowry had executed a Registered Lease Deed dated 15.5.1963 for an extent of 5490 sq.ft. of vacant land for a period of 7 years from 1.10.1962, with option to renew the lease for a further term of 7 years in favour of the Predecessor-in-interest of the plaintiff, that by the subsequent Lease Deed dated 25.3.1969 the lease was extended for a further period of 14 years from 1.1.1969 with an option to extend the lease for 6 years on its expiration on a mutually agreed rent, that the defendant had registered the lease deed on 25.3.1969 in favour of the Burmah Shell Oil Company, the predecessor-in-interest of the plaintiff, that the Burmah Shell Oil Company was renamed as M/s. Bharat Refineries Limited on 12.2.1976 and subsequently the same was changed into Bharat Petroleum Corporation, the plaintiff herein by a fresh certificate of incorporation under the Indian Companies Act, that the defendant society executed a registered Lease Deed on 28.5.1985 for a further term of 10 years from 1.1.1983 in favour of the plaintiff with an option to extend the lease for a term of 10 years from its expiration.
6.(b) The defendant society had agreed to demise an additional land of an extent of 2366 sq.ft on lease to enable the plaintiff Corporation to carry out total reorganisation of the facilities at the rear side of the Retail Outlet on a long term lease in their letter dated 31.8.2001, that a fresh agreement for the lease of total extent of 7856 sq.ft. was executed by the defendant society represented jointly by the Hony. President, Hony. Secretary and Hony. Treasurer (defendants 3,4,5) for a term of 50 years from 1.1.2002 on rental terms with an advance rent of Rs.20 lakhs to be adjusted against the rental as incorporated in the document, that due to the interse dispute between the office bearers of the defendants the plaintiff could not pay the revised rental/advance from 1.1.2003 in the name of the defendant society.
6.(c) An advocate notice dated 12.11.2002 was received by the plaintiffs to hand over vacant possession of the premises, for which suitable reply was sent to the defendant society in which it is pointed out that the defendant society president Mr.G.K.Francis had committed in writing to execute a renewed lease to the total extent of 7856.07 sq.ft. From 1.1.2002 for a period of 50 years, that on 4.12.2002 the defendant sent a rejoinder wherein it was stated that the lease agreement entered by its previous president is not binding on the first defendant society, that the defendant society having agreed to renew the lease of the total extent of 7856.07 sq.ft. from 1.1.2002 for a period of 50 years cannot go back on the agreement and threaten to dispossess the plaintiff corporation, that the document signed by the defendants on 31.8.2001 is only an agreement to extent the lease for a further period of 50 years and not a regular lease deed, that it was agreed that the full fledged document will be registered, that the defendant society cannot resile from the agreement executed by its president, secretary and treasurer with the plaintiff corporation and that the plaintiff corporation is entitled to file a suit for specific performance of agreement to lease the suit property entered into between the plaintiff corporation and defendant society and for permanent injunction restraining the defendant society, its men and agents from interfering with the plaintiff's peaceful possession and enjoyment of the suit property and for other consequential reliefs.
7. In the written statement filed by the 1st, 6th and 7th defendants, the allegations raised in the plaint are categorically denied by reiterating the pleadings in plaint in C.S.No.59/2006.
8. In the light of the above said pleadings, the following issues have been framed by this Court in C.S.No.59 of 2006 and Tr.C.S.No.1155 of 2009 :-in C.S.No.59 of 2006
"1. Whether the registered lease deed dated 06.03.1996 between the plaintiff and the defendants of the plaintiff's land in the premises No.29, Poonamallee High Road, Periamet, Chennai 600003, and more fully described in the plaint schedule, been validly and legally terminated?
2. Whether there has been any valid and legally binding renewal, in the absence of registration, of the said lease by the plaintiff in favour of the defendant, especially under the alleged Letter dated 31.08.2001 written by the erstwhile president of the plaintiff to the defendant and has any consideration therefor even been paid by the defendant to the plaintiff?
3. Whether the plaintiff has been estopped by the interim order dated 20.06.2006 passed in O.A.No.373 of 2002 in C.S.No.396 of 2002 and further made absolute on 30.07.2002 from further leasing out the plaintiff's said land to the defendant?
4.Whether the defendant is liable to quit and handover vacant possession to the plaintiff, of the plaintiff said land more fully described in the plaint schedule?
5.Whether the defendant is liable to pay damages to the plaintiff @ Rs.2,00,000/- (Rupees Two lakhs) per month for the defendant's illegal use and occupation of the said plaint schedule land?
6.Whether the defendant is liable to pay the plaintiff a sum of Rs.70,00,000/- as damages for the illegal use and occupation of the plaint schedule land, commencing from 1.1.2003 onwards till delivery and possession is handed over by the defendant to the plaintiff calculated @ Rs.2,00,000/- (Rupees Two Lakhs) per month?
7.whether the plaintiff is entitled to an order of mandatory injunction directing the defendants to remove any buildings, erections, pumps, installations, pipe-lines or any other fixtures/structures ordered or placed on the plaint schedule land as contemplated under Clause 4(ii) of the registered lease deed dated 06.03.1996?
8.To what relief are the parties entitled to?"in C.S.No.1155 of 2009
(1) Whether the document dated 01.01.2002 is a lease agreement or an agreement to enter into a lease?
(2) Whether the plaintiff is entitled for specific performance of contract as pleaded?
(3) To what other relief the plaintiff is entitled to?
9. For the sake of convenience, the ranks of the parties as mentioned in C.S.No.59 of 2006 are referred to in this judgment. The plaintiff is indicated as plaintiff society and the defendant is mentioned as defendant corporation.
Issue Nos.1 to 3 in C.S.No.59 of 2006 and Issue Nos.1 & 2 in C.S.No.1155 of 2009 :
10. The plaintiff society is the owner of the suit premises. The plaintiff society was constituted for service. On 15.5.1963 the property was leased out to the defendant for a period of 7 years by means of Ex.P.2. Subsequently the lease was extended for 14 years with effect from 1.1.1969 by virtue of registered lease deed Ex.D.3 in favour of the defendant. Earlier, the defendant was known as Burma Shell Oil Company and the same was nationalised on 24.1.1976 and it was renamed as M/s.Bharat Refineries Limited. The plaintiff society further leased out the property on 28.5.1985 by means of Ex.D.4 in favour of the defendant for a period of 10 years with effect from 1.1.1983. On its expiry, on 6.3.1996 by execution of Ex.D.5 Lease Deed, the lease was further extended for 10 years in favour of the defendant with effect from from 1.1.1993. Upto this stage, there is no debate among the parties.
11. The dispute between the parties arose on the advent of Ex.D.9 Lease Deed executed by the then Hony.President, Hony.Secretary and Hony. Treasurer for a term of 50 years from 1.1.2002. It is recited in the deed that in addition to the property leased out, the lease is extended for further extent of 2366 sq.ft. The plaintiff society agreed to hand over additional extent of 2366 sq.ft. Also on an advance rent of Rs.20 lakhs to be adjusted against the rental as incorporated in the document. One of the executants viz., the president by name Dr.G.K. Francis sent a letter dated 13.5.2002, Ex.D.7 to the defendant corporation with reference to the request for the additional land. It is mentioned in the document that a clause will be incorporated in the agreement Ex.D.9 to the effect that at the expiry of the Lease Agreement on completion of 50 years, the said lease will be renewed subject to the fresh terms and conditions in mutual agreement with FINS (plaintiff) and BPCL (defendant).
12. After the execution of the above said lease deed, election was held in the plaintiff society, in which the earlier office bearers were defeated and new set of office bearers came to office. There had been litigations between the erstwhile office bearers with the present office bearers which led them to involve in a litigation before this Court in C.S.No.296 of 2002 and C.S.No.206 of 2003. On 30.7.7.2002 an order was passed by this Court in A.No.2654 of 2002 and O.A.No.373 of 2002 in C.S.No.396 of 2002 restraining the plaintiff society, the defendant in that suit from conveying by way of sale/lease/gift or otherwise. Earlier an interim injunction was passed and the same was made absolute, restraining this plaintiff from further alienating or leasing out the property. A copy of the said order is Ex.P.8. Ex.P.11 is copy of order of this Court in O.A.No.291 of 2003 in C.S.No.206 of 2003 dated 20.10.2004. This application was by the above said Dr.G.K. Francis for interim injunction restraining the plaintiff society from effecting expulsion from his life membership. The said application was dismissed by this Court.
13. The election for the society was held on 28.9.2002. After the new office bearers assumed office, the plaintiff society on 12.11.2002 issued a notice under Section 106 of T.P. Act, which is Ex.P.3 to the defendants calling upon them to vacate and hand over vacant possession of the suit premises to the plaintiff society on and with the expiry of 31.12.2002. The lease period under Ex.D.5 had to expire on 31.12.2002. It has been categorically stated in Ex.P.3. As resolved in the General Committee of the plaintiff society on 4.11.2002, the tenancy of the defendant corporation was determined with the expiry of 31.12.2002 and that as contemplated under Section 4(ii) of the lease deed Ex.D.5 dated 6.3.1996, the defendants are liable to pay a sum of Rs.2,00,000/- per month as damages for the illegal use and occupation of the premises.
14. A reply emanated from the defendant under Ex.P.4 on 28.11.2002 denying the expiry of this period, besides stating that the then president, representing the society, G.K.Francis has executed a renewed lease for a total extent of 7856.07 sq.ft. From 1.1.2002 for a period of 50 years, together with an advance of Rs.20 lakhs to be adjusted against the rental, that the possession of the defendants has guaranteed till 31.12.2051 and the plaintiff has no option but to comply with the contract and that they need not pay Rs.2,00,000/- per month being damages for use and occupation nor deliver vacant possession.
15. Repudiating the allegations in the reply notice, on 4.12.2002 a rejoinder was issued by the plaintiff society under Ex.P.5 through its lawyer explaining the purpose of giving the deed by the erstwhile office bearers, that for the purpose of obtaining the Income Tax clearance and after obtaining the Income Tax clearance, no lease deed based thereon was either entered into between the parties and that Rs.20 lakhs was not paid to the plaintiff, reiterating the demand for payment of damages and delivery of vacant possession.
16. It is contended by the plaintiff's counsel that by convincing with the erstwhile office bearers of the plaintiff society, the defendants have created Ex.D.9 lease deed, that since it is lease period beyond 11 months it should have been registered and that means of valid notice to quit under section 106 T.P.Act, the defendants are liable to deliver vacant possession of the suit property. Pertinent it is to note that the validity of the notice to vacate the suit land has not been challenged.
17. Repelling the above contentions, it is argued on the side of the defendant corporation that even though it is mentioned as lease deed, Ex.D.9 is an agreement to enter into a lease, that it need not be registered and hence the defendants have filed the suit for specific performance of contract, that subsequent lease amounts were received by the plaintiff society which was tendered after termination of lease and hence there could be no decree for delivery of the premises to the plaintiff society.
18. Ex.D.8 is no objection certificate from appropriate authority viz., Income Tax Department. The department has no objection to transfer the property for an apparent consideration of Rs.1,19,20,440/-. In this certificate it is mentioned that the above said amount is apparent sale consideration. The purpose for obtaining the no objection certificate from the Income Tax Department was explained by the plaintiff society in the rejoinder, Ex.P.5, aforestated. While earlier lease period was to expire on 31.12.2002, What was the necessity for the erstwhile office bearers of the plaintiff society to renew the lease before hand, is the question. Ex.D.9 is for a period of 50 years, captioned as "Lease Deed" is undated and unregistered. The learned counsel for the defendant corporation Mr.M.V. Krishnan would strenuously contend that even though Ex.D.9 was styled as "Lease Deed", it is a lease agreement only and even if its void lease, the defendant corporation has got every right to claim equitable right under the doctrine of part performance. In support of his contention, he placed reliance upon a Division Bench of Calcutta High Court in AIR 1984 NOC 317 (CAL.) [Braithwaite & Company Ltd., v. M/s. R.P.Agarwalla & Brothers] wherein it is held as follows:-
"It is settled law that when a person is in occupation under a void lease, he acquires no interest in the property which was proposed to be demised to him but he may claim equitable right under the doctrine of part performance as embodied in section 53A of the Transfer of Property Act."
19. He also relied upon a Division Bench decision of Patna High Court in AIR 1996 PATNA 8 [Surajmal Marwari and others v. Rampearaylal Khandelwal and others] in which it is held that under Section 116 of the Evidence Act, the tenant holding over his a tenant on sufferance and not a trespasser. Explaining the provisions in Section 108(q), 111(a) and 116 of the Transfer of Property Act, the Patna High Court has proceeded to observe as under:
"7. The stand taken by the principal defendants is manifestly untenable having regard to the provisions of Clause (q) of Section 108 read with Clause (a) of Section 111 of the Act. Clause (a) of Section 111, no doubt, provides that a lease of immovable property is determined by efflux of the time limited thereby. But Clause (q) of Section 108 lays down that on the determination, the lessee is bound to put the lessor in vacant possession of the property. Having regard to these two provisions, it is abundantly clear that when the term of a lease has expired, the lessee can determine the lease by fulfilling his obligation of putting the lessor into possession of the property. But if the lessee does not put the lessor into possession of the property, and on the contrary, remains in possession thereof then he does not become a trespasser in relation to the property, but his status is that of a tenant on sufferance. Such a case is governed by Section 118 of the Act which is in the following terms :
"If a lessee or under lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or underlessee, or otherwise to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year or from month to month, according to the purpose for which the property is leased, as specified, in Section 106."
In such a situation, it is open to the lessor to determine the lease by a notice as provided in Clause (h) of Section 111, and so long as the lessor does not exercise his option in the matter and assents to the lessee continuing in possession, the relationship of landlord and tenant does not legally come to an end. It is clear from the provisions of Section 116 quoted above that the lease is renewed from year to year, or from month to month, as the case may be, not only where the lessee is continuing in possession of the property and pays rent to the lessor or his legal representative, which the latter accepts, but also where the lessor otherwise assents to the lessee continuing in possession."
20. As per Section 116 of the T.P. Act, the lessor or his legal representative has to accept the rent from the lessee. Section 108(q) provides rights and liabilities of the lessee. The facts in the present case are distinguishable. The plaintiff society has not received the amount as rent from the defendant. On 7.8.2003 under Ex.P.10, the counsel for the plaintiff society addressed a letter to the first defendant stating that after the termination of tenancy after a lapse of over 10 months the defendant sent a Demand Draft to the plaintiff society for a sum of Rs.27,000/- alleged to be the site rent for July 2003 and that the Demand Draft was refused to be received by the plaintiff society and was returned with the said notice. The plaint contains an annexure enlisting particulars of as many as 10 cheques one for Rs.10,000/- and others for Rs.9,000/- each representing quarterly rent from October 2004 to October 2005. it is admitted by the defendant corporation that the above said cheques were not encashed by the plaintiff. The above said circumstances would show that the plaintiff did not receive the rent from the defendant. D.W.1 in her cross examination would explain the reason for not paying Rs.20 lakhs to the plaintiff society. She says that though the Cheque number, date of cheque and also banker's name and other particulars for Rs.20 lakhs is mentioned in Ex.D.9, inspite of repeated reminders, the plaintiff has not come forward to register the lease deed and that was why the cheque was not given to the plaintiff. This reason is not convincing.
21. The defendant corporation is barred from enforcing Ex.D.9 for the reason that since its lease period exceeding one year, it has to be registered, that it is not dated and that even if it is considered to be an agreement for entering into lease, the defendant corporation has not shown its readiness and willingness to perform its part of contract. There is no demand by the defendant corporation calling for the plaintiff to execute the lease deed. The defendant corporation has not shown its willingness and readiness to pay Rs.20 lakhs and there is no material to indicate in this regard.
22. As adverted to supra, since the plaintiff society had not received the rent from the defendant corporation after determination of lease, the defendant corporation cannot take recourse to Section 116 of the Transfer of Property Act. In the above said Surajmal Marwari's case a Full Bench decision of this Court in ILR 31 MAD 163 [Vadapalle narasimham v. Dronamaraju Seetharamamaraurthy] had been referred to. In which it is observed as follows:
"Under Section 116 which in our opinion, points out the rule which is prima facie applicable even in cases not coming under the Act, where a lessee holds over and the lessor or his representative accepts rent or otherwise assents to the tenant continuing in possession, the lease is, in the absence of a contract to the contrary, renewed from year to year or month to month as the case may be. But while at common law the lessor could by his assent, convert a tenant by sufferance into a tenant in the true sense of the term, he could not, by his mere assent, convert the representatives of a tenant by sufferance, who are mere trespassers into tenants and without their own consent; and Section 116 of the Transfer of Property Act which enables the lessor or his representative by his assent to convert a tenant by sufferance into a yearly or monthly tenant, does not enable him by his mere assent to convert the representatives of a tenant by sufferance into such a tenant."
23. The gist of the above said decision is that even after the determination of the lease, there must be assent at any time between the parties with regard to the continuance of lease for the demised premises. On the one hand the lessor has to receive the rent from the lessee and on the other, tenant has to acknowledge the tenancy by payment of rent. In the present case on hand, one of the conditions is missing, which is the consent on the part of the plaintiff society to receive the rent after determination of lease.
24. This position has been well explained by the Honourable Supreme Court in 2007 SCC 232 [Bhuneshwar Prasad and another v. United Commercial Bank and Others] "The whole basis of Section 116 is that a landlord is entitled to file a suit for ejectment and obtain a decree for possession and , therefore, his acceptance of rent after expiry of lease is an unequivocal act referable to his desire to assent to the tenant continuing possession. It would be absent in cases where there are restrictions as contemplated by the rent laws. In such cases, therefore, it is for the tenant where it is said that the landlord accepted the rent nor as a statutory tenant but only as a legal tenant indicating his assent to the tenant's continuing possession to establish it."
25. The effect of non registration of a lease deed for a period exceeding one year has been discussed and the proposition of law has been laid by the Apex Court in (2000) 6 SCC 394 [Anthony v. K.C. Ittoop & Sons and others], which is as under:-
"16. Taking a different view would be contrary to the reality when parties clearly intended to create a lease though the document which they executed had not gone into the processes of registration. The lacuna had affected the validity of the document, but what had happened between the parties in respect of the property became a reality. Non-registration of the document had caused only two consequences. One is that no lease exceeding one year was created. Second is that the instrument became useless so far as creation of the lease is concerned. Nonetheless the presumption that a lease not exceeding one year stood created by conduct of parties remain unrebutted."
26. In view of the above said ratio, which is directly on the point, the ruling of the Calcutta High Court aforenoted in Braithwaite's Case does not stand. Calcutta High Court decision, it refers to the case of void lease. The lease may be held to be void when it is exceeding for a period of one year but unregistered. If it is so, the present case on hand may fit in with the proposition. But as per the principle laid down by the Supreme Court at the most even though if the unregistered lease deed was executed for a period exceeding one year it may be valid for one year alone and that the said instrument became useless so far as creation of lease is concerned. If it were so, Ex.D.9 Lease Deed is a lease for 50 years, being unregistered cannot be used for any purpose. Worthwhile it is to note that earlier to the filing of the suit in Tr.C.S.No.1155 of 2009, the defendant had not asserted that Ex.D.9 instrument is an agreement to enter into lease. They have treated Ex.D.9 as a lease deed for 50 years. Non-registration of Ex.D.9 vitiates the validity of the same. It cannot be cured by any means. Section 107 of the T.P. Act provides 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.
27.EVen if the first defendant has treated Ex.D.9 only as a lease and not as an agreement to lease which is evident from the reply letter sent by the first defendant to the plaintiff's advocate in Ex.D.11 on 28.11.2002 (Ex.P.4), wherein it is stated that "Having executed a Lease Agreement for 50 years from 1.1.2002 in our favour, your clients are forbidden from backing out of the contract of lease." There was no contemplation of concept of "Agreement for Lease" on the part of the first defendant anterior to the filing a suit in Tr.C.S.No.1155 of 2009. The first defendant have not issued any pre-suit notice or any communication to the plaintiff calling them upon to perform their part of contract. In Ex.D.7, the then president Dr.G.K.Francis while addressing the first defendant, has stated that Ex.D.9 is a lease deed and that the first defendant had to arrange for registration of lease at an early date. The letter was received by the 1st defendant. But they did not send any reply stating that Ex.D.9 was an agreement for lease and that the plaintiff had to execute a registered lease deed. In the considered opinion of this Court, in the above said circumstances, Ex.D.9 is a classical lease deed, not an agreement to enter into lease.
28.As already stated even if Ex.D.9 is treated to be an agreement of lease, still the defendant corporation is bound to show its readiness and willingness. In this case, they are miserably absent. Ex.D.7 is the letter dated 31.8.2001 issued by Dr.G.K. Francis, the erstwhile president of the Friend-in-Need Society, forming the terms of renewal of lease from 1.1.2002 upto 31.12.2051. The payment of advance of Rs.20 lakhs has been split up and the quantum of payment has been specified to spread over for the above said period. In view of this Court, the confirmation under Ex.D.7 has no legal consequences for want of registration of lease deed Ex.D.9.
29. In view of the voidability of Ex.D.9 and the lapse on the part of the defendant corporation, the notice to quit issued by the plaintiff society being valid, the determination of the tenancy by 31.12.2002 is legally valid. No question of passing decree for specific performance of contract would arise in Tr.C.S.No.1155 of 2009. These issues are answered accordingly.
Issue Nos.5 and 6 in C.S.No.59 of 2006
29. In the notice to evict, plaintiff has claimed Rs.2,00,000/- per month after the date of determination of lease on 31.12.2002 for the illegal use and occupation as contemplated under Clause IV (ii) of Ex.D.5 Lease Deed. In the said clause read thus:-
"IV. (ii) On the determination of the tenancy either by efflux of time or sooner determination, the lessee shall be at liberty within three months after such determination to remove any buildings, erections, pumps, installations, pipelines or any other fixtures/structures erected or placed by it on the demised premises."
30. There was no agreement between the parties for payment of Rs.2,00,000/- as damages, in default of the defendants to vacate the premises on the expiry of lease period. In the notice to quit, the plaintiff have assessed and claimed damages at Rs.2,00,000/- per month for illegal use and occupation. In the proof affidavit for cross examination by the plaintiff it is stated that the plaintiff claims Rs.2,00,000/- per month as damages for illegal use and occupation by the defendants from 1.1.2003 onwards which is based on the market value of the said suit property vis-a-vis other properties in and around the locality. In Ex.D.8 which is the no objection certificate from the Income Tax Department, the apparently sale consideration is mentioned as Rs.1,98,70,440/-. Hence, this Court is of the view that a sum of Rs.1,00,000/- per month may be allowed as damages for the use and occupation by the defendants after the expiry of Ex.D.5 lease period. These issues are answered accordingly.
Issue Nos.4,7 and 8 in C.S.No.59 of 2006 and Issue No.3 in Tr.C.S.No.1155 of 2009
31. A conspectus of all the materials in this case, in the light of the judicial pronouncements as shown that Ex.D.9 lease for 50 years being unregistered is not valid in the eye of law, that the notice to quit in Ex.P.3 by the plaintiff to the defendants is valid and the tenancy was duly terminated by 31.12.2002, that the lease for 50 years under Ex.D.9 is not valid in the eye of law and that the defendants have to pay Rs.1,00,000/- per month as damages for use and occupation to the plaint from 1.1.2003 till the date of delivery, in addition to vacate the suit property . The plaintiff in C.S.No.59 of 2006 is entitled for the reliefs as prayed for. The suit in Tr.C.S.No.1155 of 2009 is liable to be dismissed. These issues are answered accordingly.
32. In the result, C.S.No.59 of 2006 is decreed with costs, directing the 2nd defendant to vacate the suit premises within six months. The defendants shall pay Rs.1,00,000/- per month towards damages for the use and occupation of the suit premises from 1.1.2002 till the date of delivery. Tr.C.S.No.1155 of 2009 is dismissed with costs.
ggs