IMPORTANT POINT
The renewal clause in a lease deed is an important term of the agreement and ordinarily the Court should be reluctant to ignore such a term of the lease unless on a fair reading and reasonable construction no meaning can be attached to it.

Headnote:Transfer of Property Act, 1882-Section 106-Lease for 25 years-Right of renewal-Renewal clause in lease deed without any terms and conditions of renewal-Whether covenant for renewal of lease was valid and enforceable-Question is to be judged on facts and circumstances of each case-Lease in respect of premises situated in a busy commercial city-Lessees, appellants had made no attempts to get the terms and conditions of renewal of lease fixed by mutual discussions-Courts below rightly found that the lessees had no enforceable right of renewal under the document.
Held : The lease was granted for a period of 25 years in the first instance with the right of renewal as hereinafter set out. Though the right of renewal is mentioned in the clause there is no mention about the terms and conditions of renewal either in the clause quoted above or elsewhere in the document. On a fair reading of the document it appears that the right of renewal stated therein is shrouded in uncertainty and vagueness. The renewal clause in a lease deed is an important term of the agreement. Ordinarily the Court should be reluctant to ignore such a term of the lease unless on a fair reading and reasonable construction no meaning can be attached to it. Since the renewal clause is not clear and specific regarding the terms of renewal the Court is to ascertain the intention of the parties from the materials on record. As noted earlier, the lease deed read as a whole, does not indicate the manner in which the right of renewal is to be exercised by the parties and the terms and conditions of such renewal. It is not even stated in the document that the renewal will be subject to terms and conditions to be decided by the parties by mutual discussion or according to any other procedure. There is no indication whether such discussion will at all be held or not. Renewal being an important condition of lease, could not have been dealt with in such careless and slip-shot manner and would not have been left in such vague and uncertain condition if the parties were serious about the renewal of the lease. On appreciation of the evidence the Courts below having not believed the case of the defendants that some verbal requests for renewal of the lease were made by them to the plaintiff after expiry of the period of lease, the Courts have found that no attempt was made by the lessees to suggest the terms and conditions for renewal of the lease particularly the rent to be paid by them except offering the rent for two months at the old rate. In such circumstances, if the Courts below have found that the lessees had no enforceable right of renewal under the document and indeed had not taken any step for execution by any document on renewal of the lease, no exception can be taken to such findings. No fixed principle or straight-jacket formula can be laid down regarding the question whether the condition of renewal in the lease which is vague and uncertain should be enforced. The question is to be judged on the facts and circumstances of each case. In the case in hand, the lease is in respect of premises which was situated in a busy commercial centre of the city of Hyderabad and lease of the property had been taken and was being used for commercial purposes. In such a case it is difficult to accept that the parties had intended that the lessees can unilaterally exercise the right of renewal without the terms and conditions of renewal being settled between the parties. At the cost of repetition it may be stated here that the lessees (appellants herein) had made no attempt to get the terms and conditions of renewal of the lease fixed by mutual discussions with the lessor - respondent herein. So far as the lessor is concerned it had made its intention clear by sending the notice of termination of the lease. (Para 12)

JUDGMENT

D.P. Mohapatra, J.-Leave granted.

2. This appeal, filed by the defendants of O.S. No.778 of 1996 on the file of the City Civil Court, Hyderabad, is directed against the judgment of the High Court of Andhra Pradesh in City Civil Court Appeal (CCCA) Nos. 99 and 100 of 1999 dismissing the appeal filed by the appellants and confirming the judgment/decree passed by the Trial Court. The dispute raised in the case relates to eviction of the tenants from the premises described as "Central Studio", Door No. 3-6-356/8, Basheer Bagh Road, Hyderabad and Door No.119/A, White Hall, Sardar Patel Road, Hyderabad. The appellants, who were travelers of the "Central Studio", were tenants of the premises under the respondent Nagarjuna Travels and Hotels Pvt. Ltd., which is the owner of the plot.

3. The respondent filed the aforementioned suit against the appellants seeking the decree of eviction from the suit premises. In the suit the following reliefs were sought by the plaintiff :-

"(a) Plaintiff company be put in possession of the suit premises by evicting the defendants therefrom.

(b) Arrears of rent i.e. 2,600/- p.m. for the months of September, 1995 and October, 1995 be awarded from the defendants jointly and severally.

(c) An amount of Rs. 2,40,000/- be awarded towards compensation and damages for the use and occupation of the suit premises for the period between 1.11.1995 and 30.4.1996 from the defendants jointly and severally.

(d) Pendente lite and post decreetal compensation/damages be awarded from the defendants jointly and severally at the rate of Rs. 40,000/- per month for the use and occupation of the suit premises..."

The case of the plaintiff was that in pursuance of the registered lease dated 3.8.1970 executed between the parties, the suit premises were given on lease by the plaintiff to the defendants for a period of 25 years on payment of rent of Rs.1300/- p.m. with effect from 1.8.1970. The said period of 25 years expired on 1.8.1995. Thereafter on 10th October, 1995 the plaintiff issued a notice to the defendants of termination of the lease by giving 15 days notice expiring on 31st October, 1995. The notice was stated to be issued under Section 106 of the Transfer of Property Act. The defendants were required to handover vacant possession of the premises on expiry of the notice period. Since the defendants did not vacate the premises in compliance with the notice and continued to remain in possession of the premises, the plaintiff filed the suit seeking reliefs noted earlier.

4. The defendants contested the suit. Their case, shortly stated, was that it was stipulated in the lease deed that on expiry of the period of lease in the first instance (25 years) the lessee shall have the right of renewal; under the said covenant the defendants exercised the right of renewal, paid rent for the months of August and September, 1995 and continued to remain in possession of the property; though the plaintiff initially accepted the rent but subsequently declined to do so. The defendants also questioned the jurisdiction of the Civil Court to entertain the suit and contended that the proceeding for eviction could be filed only before the Rent Controller since the proportionate rent payable by them, for the premises after the area was reduced on a portion of it being taken over for the purpose of the widening of the road, was less than Rs.1000/-.

5. The trial Court on the pleadings of the parties framed several issues including the issue whether the plea of the defendants that there was a renewal of lease for a further period of 25 years on the same terms and conditions is true and whether the defendants are entitled to make such a claim under law? And whether the Court has jurisdiction to try the suit in view of the plea raised by the defendants vide Andhra Pradesh Building, Lease, Rent and Eviction Control Act?

6. It is relevant to state here that the appell

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2002 Supreme(SC) 738

IMPORTANT POINTThe renewal clause in a lease deed is an important term of the agreement and ordinarily the Court should be reluctant to ignore such a term of the lease unless on a fair reading and reasonable construction no meaning can be attached to it.

IMPORTANT POINT
The renewal clause in a lease deed is an important term of the agreement and ordinarily the Court should be reluctant to ignore such a term of the lease unless on a fair reading and reasonable construction no meaning can be attached to it.