1. Suit for recovery of possession and mesne profits following the expiry of a registered lease for a period exceeding twenty years. (Para 2 )
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1995 Supreme(SC) 992
SUPREME COURT OF INDIA
B.P.Jeevan Reddy : M.M.Punchhi : S.C.Agrawal
Savita Dey
Versus
Nageswarmajumdar
Case No. : .
Date of Decision : 9/26/95
Advocates Appeared: Chakravarti P.K. : Govind R.N.
Advocates:
P.K.CHAKRAVARTI, R.N.GOVIND
P.K.CHAKRAVARTI, R.N.GOVIND
Leases for over 20 years executed before 24/8/1965 are exempt from the West Bengal Premises Tenancy Act under Section 3(1). Additionally, rent increases stipulated in the lease due to municipal taxes do not constitute novation or implied surrender, maintaining the lease's original terms until expiry.
Headnote:
West Bengal Premises Tenancy Act, 1956 - Section 3 – Tenant - Trial court – Jurisdiction - Before trial court, the only question raised was whether on terms of registered lease deed appellant was entitled to a decree for possession as also for profits from the date of the expiry of lease - Trial court in its well-reasoned judgment came to conclusion that the stipulated rent of per month was rightly increased to with effect from because of increase in municipal tax and therefore on this factum, there could be no implied surrender under Section 111 of Transfer of Property Act, there being no of lease, or any change In the terms thereof - Trial court further viewed that since enhancement in rent on account of the enhancement of municipal tax was itself stipulated in the lease of deed – Held, Now on trial scene court Find that argument of the tenant-respondents about the increase of rent and of contract was rightly rejected by the trial court. There is no inflexible principle that every variation at the rate of rent payable under a registered deed of lease necessarily implies surrender of the said lease and creation of a new tenancy, or that whenever rate of rent is altered a new relationship between the parties gets created. By mere increase or reduction of rent surrender of the existing lease and the grant of a new one, cannot be inferred in each case - It is a question of fact to be determined. See in this regard - Instantly in the deed itself, provision had been made whereby the lessee had undertaken to pay a proportionate increase in share of municipal taxes if in future the rate and taxes get increased by the Calcutta Corporation in respect of the demised premises - Increase of per month in agreed upon rent has rightly been found to be because of increase in taxes. And since they were conceived of and stipulated in deed itself no question of notation of contract could ever arise or on that event creation of new tenancy so as to lift the protection to landlord available under Section 3 of the Act - Nowhere in these terms can anything be spelled out that had reserved to herself the unfettered right to terminate tenancy at her whim and caprice. The High court has not adverted to this fact situation - It erroneously proceeded on assumption that lesser herein had an unfettered right of bringing to an end the tenure of the tenant termed precarious - Thus neither on law nor on fact does judgment of High court deserve sustaining; all the more, when it has not demolished the case of the landlord as succeeding in trial court and on projecting one which was never canvassed before the trial court - landlord or by the tenant during the period of the lease – Order accordingly
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Table of Contents
2. Whether rent enhancement converted a fixed-term lease into a month-to-month tenancy attracting the West Bengal Premises Tenancy Act, 1956. (Para 3 )
3. The High Court erred by importing post-amendment provisions of Section 3(2) into pre-amendment leases governed by Section 3(1) of the West Bengal Premises Tenancy Act. (Para 5 , 6 , 7 , 8 , 9 )
4. Rent increase stipulated in a lease deed due to municipal tax does not constitute novation or implied surrender of the lease. (Para 4 , 10 )
5. Judgment and decree of the High Court set aside, restoring the trial court's decree for possession and mesne profits. (Para 1 , 11 )
6. Does the West Bengal Premises Tenancy Act, 1956 apply to leases executed before August 24, 1965, for a period exceeding twenty years?
No. Under Section 3(1) of the Act, the provisions generally do not apply to any premises held under a lease for a period of more than twenty years for leases entered into before the 1965 amendment. (Para 5 )
7. Does an increase in rent necessarily imply the surrender of an existing lease and the creation of a new tenancy?
No. Rent variation does not automatically imply surrender or novation. If the increase is based on provisions within the lease deed, such as adjustments for municipal taxes, it does not create a new tenancy or result in implied surrender. (Para 4 , 10 )
8. Can the requirements of Section 3(2) regarding termination options be imported into Section 3(1) for pre-amendment leases?
No. The legislature maintained a clear distinction between pre-amendment and post-amendment leases. The requirements or provisos of Section 3(2) cannot be imported wholly or partially into Section 3(1) to alter the status of a pre-amendment lease. (Para 5 , 7 )
Judgment
M.M.PUNCHHI, J.
(1) IN furtherance to our order dated 11/5/1994, allowing this appeal, setting aside the judgment and order of the division bench of the Calcutta High court, restoring that of the trial court, we hereby release our deferred reasons to complete the judgment.
(2) THE landlord-appellant herein was the plaintiff. The defendants-respondents were the tenants. The appellant filed a suit for recovery of possession of the demised premises and for mesne profits in the City Civil court at Calcutta against the tenants-respondents. The suit was based on the premise that by a registered deed of lease dated 6/7/1964, the demised premises were leased out to the respondents for a period of 21 years commencing from 1/7/1964 and ending on 30/6/1985 at the agreed upon rate of Rs. 475.00 per month which subsequently was increased to Rs. 501.00 per month, consequent to the increase in municipal tax. Since the lease was expiring on 30/6/1985, the appellant sent a quit notice on 26/5/1985 requiring the respondents to vacate the premises, on the efflux of time on 30/6/1985. Since the respondents did not vacate the demised premises despite notice, a suit for possession was Filed against the respondents claiming Rs. 100.00 per diem for wrongful use and occupation after the expiry of the period of lease.
(3) THE respondents even though contesting the suit had not much to offer in defence. They pleaded that they had wrongly been made to pay Rs. 5,000.00 as Salami at the time of the execution of the lease deed and that rent was enhanced to Rs. 501.00 per month contrary to the terms of the lease. And this act of enhancement had the effect of tenancy becoming from month to month, in substitution of the lease, attracting provisions of the West Bengal Premises Tenancy Act, 1956.
(4) BEFORE the trial court, the only question raised was whether on the terms of the registered lease deed the appellant was entitled to a decree for possession as also for mesne profits from the date of the expiry of the lease. The trial court in its well-reasoned judgment came to the conclusion that the stipulated rent of Rs. 475.00 per month was rightly increased to Rs. 501.00 per month with effect from January 1969 because of increase in municipal tax and therefore on this factum, there could be no implied surrender under Section 111(f) of the Transfer of Property Act, there being no novation of the lease, or any change In the terms thereof. The trial court further viewed that since enhancement in rent on account of the enhancement of municipal tax was itself stipulated in the lease of deed, there was in fact no enhancement of rent by the appellant. On that premise, the trial court decreed the suit for possession and for payment of mesne profits at the rate and from the date claimed by the appellant. The High court on appeal by the tenants-respondents reversed the judgment and decree of the trial court without demolishing the grounds on which the judgment of the trial court was based, but on grounds totally different.
(5) SECTION 3 of the West Bengal Premises Tenancy Act, 1956, prior to its amendment, effective from 24/8/1965, rendered the provisions of the Act inapplicable to any premises held under a lease for more than 20 years, whether the purpose of the lease was residential or non-residential. By the amendment of 1965, this provision was retained and re-numbered as sub-section (1 of Section 3 while adding thereto Ss. (2. The provision as it stands reads as follows:
"3. Certain provisions of the Act not to apply to certain leases. (1The provisions relating to rent and the provisions of S. 31 and 36 shall apply to any premises held under a lease for residential purpose of the lessee himself and registered under the Indian Registration Act, 1908, where-
(A) such lease is for a period of not more than 20 years, and save as aforesaid nothing in this Act shall apply to any premises held under a lease for a
