1. Validity and compulsory registration of rent note under Section 17(1)(d), Registration Act, 1908 — Dispute over rent amount and default in payment. (Para 5 )
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2020 Supreme(SC) 409
SUPREME COURT OF INDIA
Ashok Bhushan, M.R. Shah, V. Ramasubramanian, JJ.
SIRI CHAND (DECEASED) THR. LRS. – APPELLANT(S)
VERSUS
SURINDER SINGH – RESPONDENT(S)
CIVIL APPEAL NO. 2617 OF 2020 (arising out of SLP (C) No. 9866 of 2019)
Decided on : 17-06-2020
Important Points
IMPORTANT POINT
When lease deed does not mention period of tenancy, other conditions of lease/rent deed and intention of parties has to be gathered to find out true nature of lease deed/rent deed.
When lease deed does not mention period of tenancy, other conditions of lease/rent deed and intention of parties has to be gathered to find out true nature of lease deed/rent deed.
Subject
Property Law - Lease and Tenancy
Act Referred
Headnote
Transfer of Property Act, 1882 – Section 106 – Registration Act, 1908 – Section 17(1)(d) – Eviction of tenant – Default in payment of rent by tenant – Rent Controller held that tenant was in arrears of rent and house tax so tenant is liable to eviction from premises in dispute – Rent Controller held that there exist relationship of landlord and tenant between parties – Appellate Court did not agree with findings of Rent Controller and judgment of Rent Controller was accordingly set aside – Present is a case where rent deed does not prescribe any period for which it is executed – When lease deed does not mention period of tenancy, other conditions of lease/rent deed and intention of parties has to be gathered to find out true nature of lease deed/rent deed – In rent note there was a categorical promise that tenancy is a monthly tenancy and rent is paid every month by 5th of every month – Tenancy was only monthly tenancy which could have been terminated on default of payment of rent by 5th day of any month or by notice of one month – Rent deed did not confer any right to tenant to continue in tenancy for a period of more than one year nor it can be said that tenancy was created for a period of more than one year – Rent note was not such kind of rent note which requires compulsory registration under Section 17(1)(d) – There is no specific finding by Appellate Court regarding liability of tenant to pay house tax – Appellate Court after holding that document-rent deed was compulsorily registrable and having not registered allowed appeal – No finding was returned by Appellate Court that tenant was not in default and tenant has deposited necessary amount to save himself from eviction – Judgment of Appellate Court is unsustainable – Judgment and decree of Rent Controller directing eviction ought not to have been interfered by Appellate Court – Judgment and decree of Rent Controller directing eviction of tenant restored. [Section 13 of East Punjab Urban Rent Restriction Act, 1949] (Paras 3.4, 3.5, 14, 16, 19, 20 and 21)
Facts of the case:
Appellant aggrieved by the order of Appellate Court filed a revision before the High Court. The High Court dismissed the revision referring to the finding of the Appellate Court that rent note was compulsorily registrable. The case of landlord to enforce condition in lease deed regarding increase of the rent was not relied. Aggrieved by the said judgment, this appeal has been filed. First issue, which has arisen for consideration in this appeal is as to whether the rent note was a document, which required compulsory registration under Section 17(1)(d) of the Registration Act, 1908. The second issue to be considered is as to whether the Appellate Court could have set aside the decree of eviction without recording finding that there was no default on the part of the tenant in payment of rent and house tax.
Findings of the Court:
There is no specific finding by the Appellate Court regarding the liability of the tenant to pay the
house tax. The Appellate Court after holding that document-rent deed was compulsorily registrable and having not registered allowed the appeal. No finding was returned by the Appellate Court that tenant was not in default and tenant has deposited the necessary amount to save himself from eviction.
Result : Appeal allowed.
Legal Category Hierarchy
Advocates Appeared:
For the Parties :P.S. Rao, Dr Satish Chandra, Archana Rao Arora, Shashi Kiran, Advocates
For the Parties :P.S. Rao, Dr Satish Chandra, Archana Rao Arora, Shashi Kiran, Advocates
Table of Contents
2. Analysis of rent note clauses — Monthly rent payment and termination notice — Contingent nature of annual rent increase — Lack of fixed term exceeding one year. (Para 9 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 )
3. Rent deeds specifying monthly rent and termination by notice, lacking a fixed term, are monthly tenancies and not compulsorily registrable under Section 17(1)(d), Registration Act, 1908. (Para 13 , 19 )
4. Appeal allowed — Judgment and decree of Rent Controller directing eviction restored. (Para 21 )
5. When is a lease of immovable property compulsorily registrable under Section 17(1)(d) of the Registration Act, 1908?
Registration is compulsory for leases of immovable property that are from year to year, for any term exceeding one year, or those reserving a yearly rent. (Para 10 , 11 )
6. Does a clause providing for a percentage increase in rent every year make a rent deed a lease for a term exceeding one year?
No. Such a clause is a promise contingent on the tenancy continuing beyond a year and does not establish that the tenancy was created for a period exceeding one year. (Para 16 , 19 )
7. How is the duration of a tenancy determined when no specific period is agreed upon in the rent deed?
Duration is determined by the object or purpose of the tenancy. If rent is reserved monthly, there is a presumption that the tenancy is monthly unless a contract suggests otherwise. (Para 14 , 15 , 19 )
8. Can an appellate court set aside an eviction decree based solely on the non-registration of a rent deed without assessing rent default?
No. The court must record a finding on whether the tenant was in default and whether the amount deposited was sufficient to save the tenant from eviction. (Para 7 , 20 )
JUDGMENT
Ashok Bhushan, J.
Leave granted.
2. This appeal has been filed questioning the judgment of Punjab and Haryana High Court dated 05.09.2018 dismissing the revision filed by the landlord-appellant.
3. Brief facts giving rise to the appeal are:
3.1 The appellant is a landlord of a shop measuring 14 sq. yds. Respondent took the shop on rent @Rs. 2,000/- per month for running a hair cutting and dressing work. The respondent-tenant on 27.07.1993 executed an agreement/rent deed undertaking to pay a sum of Rs.2,000/- each month. The rent deed was to be applicable w.e.f. 28.07.1993. The house tax and electricity bills were undertaken to be paid by the tenant. Rent was to be paid up to 5th day in each month to the owner. In event, the tenant failed to make the payment of rent up to the prescribed date in advance, the owner shall have right to get the shop vacated. The shop owner, if is in need of the shop, can serve notice of one month and get the shop vacated from the tenant. The tenant also undertook to make the payment of rent money by increasing 10 per cent each year.
3.2 An application under Section 13 of East Punjab Urban Rent Restriction Act, 1949 was filed by the appellant-landlord dated 18.03.2006 praying for eviction of the tenant along with arrears of rent and house tax and interest on the arrears of rent. The appellant's case was that rent is not paid from 28.01.2004 to 28.07.2004 and from 29.07.2004 to 28.02.2005. House tax since 1999 to 2005 amounting to Rs.22,302/- was not paid.
3.3 The tenant filed objection to the application and contended that rate of rent is Rs.1,000/-per month. It was further pleaded that at the time of taking shop in question, no other condition was agreed or settled. However, the signatures were obtained on some blank paper as security by the landlord, which appears to have been fabricated as alleged rent note. The tenant claimed to have paying the rent @Rs.1,000/- per month till February, 2006, after which landlord refused to accept the rent.
3.4 The copy of the rent note dated 27.07.1993 was brought on the record as Exh. A-1. The Rent Controller held Exh.A-1- rent deed as proved. The Rent Controller held that rent note - Exh.A-1 is not signed by both the parties. The Rent Controller further held that although time is not specified, but it is not a lease deed, so not compulsorily registrable. The Rent Controller also held that tenant was liable to pay the house tax. The respondent tendered rent @ Rs.2,000/-w.e.f. 28.01.2004, which was accepted under protest. The Rent Controller held that tenant was in arrears of rent and house tax so the respondent-tenant is liable to eviction from the premises in dispute. The Rent Controller held that there exist relationship of landlord and tenant between the parties. The Rent Controller allowed the application of the appellant and directed eviction of the respondent from the premises in question.
3.5 An appeal was filed by the tenant against the order of the Rent Controller. The Appellate Court did not agree with the findings of the Rent Controller that document Exh. A-1 was not compulsorily registrable. Appellate Court observed that perusal of the document Exh.A-1 reveals that there would be increase in the rent to the tune of 10% every year, hence the document was not executed for a period of less than a year rather the intention of the parties is clear that it was executed for more than one year, hence the document was required to be registered under Section 17(1)(d) of the Registration Act, 1908. However, the Appellate Court rejected the claim of the tenant that rate of rent was Rs.1,000/- only. The Appellate Court after holding that document was compulsorily registrable took the view that the clause regarding 10% yearly increase cannot be relied and judgment of Rent Controller was accordingly set aside and the appeal was allowed.
3.6 The appellant aggrieved by the order of the Appellate Court filed a revision before the High Court. The High Court dismissed
