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1972 Supreme(SC) 577

SUPREME COURT OF INDIA
A. ALAGIRISWAMI, I.D. DUA AND C.A. VAIDIALINGAM, JJ.
Badrilal, Appellant
Versus
Municipal Corporation of Indore, Respondent.
Civil Appeal No. 1243 of 1967, D/- 6-12-1972.

Headnote:(1) Transfer of Property Act, 1882 – S. 116–person lawfully in occupation does not become trespasser even if he does not become a tenant but is a tenant by sufferance.

       A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent. The former is a tenant holding over. The latter is a tenant at sufferance. In view of the concluding words of section 116 of the Transfer of Property Act a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy. What the section contemplates is that on one side there should be au offer of taking a new lease evidenced by the lessee or sub-lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise. The assent of the landlord which is founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays it. AIR 1949 FC 124, AIR 1972 SC 819 relied on.

       (Paras 8 & 9)

       (2) Municipal Corporation Act, 1956 (MP) – S. 80–Municipal Commissioner not entitled to enter into a contract without sanction of the Municipal Corporation.

       The Municipal Corporation Indore passed a resolution on 19.12.1949 that a particular land would be leased if the claimant deposited the upset price and rent in accordance with a letter already sent to him and on failure possession should be taken back. The claimant did not pay the amount inspite of further letters. The Municipal Commissioner however accepted certain rent. In the Municipal Council's suit for possession the ex-tenant pleaded that rent having been accepted by the Municipal Commissioner he could not be evicted and the suit was liable to be dismissed.

       Held: The Municipal Commissioner had no power to enter into a contract of lease and could do so only if sanctioned by the Municipal Corporation under section 80 of the Municipal Corporation Act. Acceptance of the rent at an old rate could not amount to the Corporation consenting to the continuation of tenancy and the defendant could not be deemed to be a tenant holding over. A person who was lawfully in occupation does not become a trespasser even if he does not become a tenant holding over but is a tenant by sufferance.

       (Paras 6 & 8)

       (3) Transfer of Property Act, 1882 – S. 116–A tenant by sufferance is not entitled to a notice before he could be evicted.

       (Para 9)

       (4) Contract Act, 1872 – S. 7–Lease of Municipal plot–Municipal Council's resolution to grant renewal if lessee paid upset price and rent at a particular rate-lessee making counter offer which was rejected–no-concluded contract–counter proposal was a fresh offer and no contract could come into existence.

       (Para 7)

Judgment

ALAGIRISWAMI, J. :- This is an appeal by special leave against the judgment of the High Court of Madhya Pradesh in Second Appeal No. 475 of 1962 on the files of that Court.

2. The appellant became a lessee of a plot of land measuring 10,375 sq. feet (721/2 Chasmas) situate at 28, Parsi Mohalla Street No. 5, Sanyogitaganj, Indore belonging to the Municipal Corporation for a period of 10 years in 1919. This lease was renewed from time to time and the last of such renewals was in the year 1939 for a period of 10 years. The lease expired on 30th September, 1949. On 24-5-1949 the respondent, Municipal Corporation of Indore, issued a notice to the appellant directing him to vacate the land on 30-9-1949. Thereupon he applied to the Municipal Commissioner either to grant him a lease for 99 years and if it was not possible to renew it at least for a period of 10 years. On 19-12-1949 the Municipal Council passed a resolution to the following effect.

"Opinion of the Lease Committee is accepted. The land situated in Parsimohalla Sanyogitaganj, be given to applicant Badrilal Bholaram only in case he is ready to deposit Rupees 16,212/- of the lease rent and upset price as per Schedule rate in accordance with letter No. 3239 dated 26-10-49 sent to him by the Municipal Commissioner otherwise the said land be taken back into possession."

On 31-12-1949 the Municipal Commissioner wrote Ex. P. 20 to the appellant informing him that the land would be given to him on long lease on condition that he paid an upset price of Rs. 16,212 and an annual lease rent at Rs. 9/- per Chasma. He was further informed that if he accepted the said condition he should deposit the upset price within 15 days and submit an application giving his consent, and that otherwise steps would be taken to take back possession of the land. The appellant wrote (Ex. P. 19 on 9-1-1950) that the upset price and rent claimed by the Municipal Council was too much and requested that the rent and upset price be modified and during the pendency of his petition proceedings before the Commissioner be stayed. He then seems to have filed a petition for revision before the Minister incharge of Municipalities and this was dismissed on 7-9-1952. Almost 4 years later on 14-5-1956 he wrote Ex. D 2 to the Commissioner requesting that an amount of Rupees 8212 may be accepted and he may be permitted to pay the balance in annual instalments of Rupees 1000/- each. On 20-6-1956 the appellant was informed by the Commissioner by letter Ex. D-3 that he should deposit the sum of Rupees 8212 within two days and thereafter the balance would be realised in instalments. The appellant not having paid the amount the Municipal Commissioner again wrote on 30-7-1956 giving him two days time to deposit the amount of Rupees 8212. On 20-2-1957 the Commissioner again wrote to the appellant directing him to deposit the whole of Rupees 16,212 within two days telling him that on his failure to do so steps would be taken for evicting him from the land.

3. The suit out of which this appeal arises was filed on 16th September, 1957. The appellant filed his written statement on 20th January, 1958 and issues were framed on 24th March, 1958. At this stage the defendant wrote Ex. D. 4 on 17-3-1959 in the following terms :

"I beg to say that it has been approved by you to give me the plot of land at H. N. 85 Parsi-Mohalla on permanent lease of 99 years after having received the upset price from me. I agree to pay whatever lease rent found due against me upto 31-3-1954 besides reasonable costs of the suit and I have deposited today vide cheque number E/2/104221 dated 17-3-59 in the Indore Bank, Sanyogitaganj and I undertake to pay in cash any amount found due against me at the time of execution of the lease deed." The Commissioner wrote Ex. D 5 to the defendant on 23-4-1959 asking him to deposit the upset price of Rupees 16,212, rent according to the new rates after deducting a sum of Rupees 824-6-0 already paid by the appella














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