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6. Against the judgment of the Sub-ordinate Judge, the respondent preferred a second appeal to the High Court and the appellant filed a memorandum of cross objections in so fat-as he was denied relief in respect of the land on which the Soda factory had been put up. Two civil revisions were also filed by the parties, one by the respondent to assail the allowance of OP No. 8/71 and the other by the appellant to question the increase in the value of the site from Rs. 6,000/- to Rs. 12,000/-. The High Court considered all these matters together and by a common judgment and order dated 26.4.1978 allowed the second appeal and decreed in toto the suit for ejectment filed by the respondent and dismissed the memorandum of cross objections and the civil revision petitions. The High Court took the view that when the parties had increased the rent in 1965 by mutual agreement, it was not a case of continuance of the old lease on payment of higher rent but it was a case of conversion of an annual lease into a monthly tenancy and consequently a new tenancy had come into existence and the appellant's rights were therefore to be determined with reference to the new tenancy and consequently he was not entitled to claim benefits under the Act and seek the sale of the leased site to him. One of the contentions before the High Court was that the order of the Rent Controller marked as "Exhibit A-3" was a nuli and void order because the Rent Controller had no jurisdiction to entertain the petition for fixation of fair rent in as much as the Madras Buildings (Lease and Rent) Control Act had no application to leases pertaining to vacant lands and sites. The High Court has discountenanced this argument by holding that even though the order of the Rent Controller had been passed without jurisdiction, the parties were nevertheless bound by the agreement entered into between them and the terms of the agreement provided adequate material for holding that a new tenancy had come into existence in 1965.

9. Examining the materials in the case, we are clearly of the view that neither the reasoning of the High Court nor the conclusion reached by it can be sustained. In the first place, the High Court has failed to see that what the respondent had sought for before the Rent Controller was only enhancement of rent for the site leased to the appellant. In the very nature of things whenever a landlord seeks the fixation of fair rent, it necessarily means that the landlord accepts the continuance of the original lease and only wants enhancement of the rent to a just and fair level. Therefore, by filing an application for fixation of fair rent the respondent had only wanted a revision of the quantum of rent and not the revision of any of the other terms of the lease. The desired result was achieved when the appellant consented to pay rent at the increased rate of Rs. 45/- per month instead of at the rate of Rs. 60/- per annum. Even though the Rent Controller had no jurisdiction to entertain the petition or adjudicate upon the question of fair rent, the parties had invited the Rent Controller to pass an order in terms of their joint endorsement. This prayer was granted by the Rent Controller and he passed an order fixing the rent at the revised rate of Rs. MO/- per annum instead of Rs. 60/- per annum and directed the said rent to be paid every month at the rate of Rs. 45/-. The change in the mode of payment of rent must obviously have been made because of the steep increase in the rate of rent from Rs. 5/- per month to Rs. 45/- per month. By effecting this change in the period of payment of rent, the parties cannot be deemed to have intended to put an end to the original lease and bring about a new lease so as to convert the annual lease into a monthly tenancy. If the parties had really intended to bring about a new tenancy, they would not have invited the Rent Controller to pass an order in terms of the joint endorsement made by them. It is, therefore, reasonable to conclude that the parties should have only proceeded on the footing that the old lease was to continue but in so far as the rent was concerned, it should be paid at the enhanced rate of Rs. 45/- per month. In such circumstances, it is impossible to hold that solely because there was a change in the periodicity of payment of rent at the enhanced rate the parties had intended that the appellant should surrender his rights under the old lease and be granted leasehold rights afresh under a new tenancy; nor can it be said that de-hors the intention of the parties, a new tenancy had come into existence by operation of law.

11. The textual passages extracted above and the decision of this Court in Gopulal's case set out lucidly that a mere increase or reduction of rent will not necessarily import a surrender of an existing lease and the grant of a new tenancy. We may add that if on account of the variation in the quantum of rent any consequential change is made regarding the time and manner of the payment of the rent it cannot have the effect of graver consequences being imported into the change of rent than what the parties had intended and warrant a finding by the Court, that the parties had intended to create a new tenancy in supersession of the earlier me or that by operation of law a new tenancy had come into existence.

12. We may now look at the decisions cited before us by the counsel for the respondent. In Ranganathan vs Ethirajulu (supra) decided by the Privy Council it was noticed that a tenant whose lease expired on September 13, 1922 continued to be in possession of the lease property and on February 1, 1923 he obtained a new lease for ten years from the time the old lease came to an end i.e. October 1, 1922 and the lease deed provided for payment of rent at a higher rate. It was in that context the Privy Council held that "though the physical possession was continuous, the possession from 1st October was attributable to a new tenancy, which was formally embodied in the lease dated 1st February, 1923, the increased rent thereby provided having been paid by the tenant from 1st October, 1922, in terms of the verbal agreement for a lease." It was not therefore a case of a mere increase in the rent but it was a case of a new lease by means of a written instrument for a period of ten years with an increase in the rate of rent. In Ganesh Mudaliar vs Chellammal (supra) the position was that a tenant who was running a tea shop in the plaintiff's land had closed the tea shop on receipt of a notice from the plaintiff but after ten days he reopened the shop after executing a lease deed and continued to be a lessee on the same terms as before. In such circumstances, the High Court held that notwithstanding the execution of a fresh lease deed, the tenant continued to be a lessee under the original lease inasmuch as he had continued to be in possession even after closing the tea shop and there was no variation in the terms of the tenancy in the subsequent lease deed executed by him. In M. Devasakayam v. Thiruveedi Amman Koil Devasthanam (supra) the facts were that a trustee of a temple had obtained a lease of temple property for himself from all the trustees of the temple, which itself was not lawful and in addition he had entered into a fresh lease deed whereunder there was not only an increase of the rent but there was also a limitation of the period of lease to one year. The High Court held that the lease deed subsequently entered into created a new tenancy because there was not only an enhancement of rent, but also the imposition of other conditions such as the period of lease etc. The last of the decisions Nastea vs Arumugha (supra) was also a case where the earlier tenancy which was an oral one was from month to month but subsequently the tenant had entered into a new agreement under a registered instrument fixing the period of tenancy to a period of three years and containing prohibitive clauses forbidding the tenant from sub-letting or assigning his tenancy and also from tethering cattle on the land. Having regard to all these factors, the Court held that there were substantial alterations in the terms of the tenancy and hence there was adequate justification to hold that the parties had entered into a new tenancy. None of these decisions lend support to the contention of the respondent that by the appellant merely agreeing to pay rent at Rs. 45/- per month instead of Rs. 60/- per annum, and as a consequence thereof changing the time of payment from year to year to month to month, the appellant and the respondent had knowingly and intentionally brought about a new tenancy in place of the old one and, such, the appellant's possession of the leafed site after 18.6.1965 was attributable to a new tenancy and consequently the appellant is not entitled to claim benefits under the Act.