A lessee's possession of a leased property is lawful if the lessee has exercised the option to extend the lease within the stipulated time.

P. RAMACHANDRA RAJU, J.

( 1 ) THE petitioners are the owners of 6,224 sq. yards of site forming part of Survey No. 71, Sarojinidevi Road, Secunderabad. Late N. P. Chenoy, father of the first petitioner and Dr. E. P. Chenoy, father of petitioner Nos. 2 to 4, executed a registered lease deed dated 5-3-1962 in favour of Sri Jainarayana Misra in respect of the said land for a period of 30 years on condition that the lessee should construct a permanent cinema theatre at his own cost and that at the end of the said period, the lessee shall hand over the leased premises including the cinema building with all the appurtenances, furniture, machinery, electrical fixtures, sanitary equipment and all installations to the lessors without claiming any compensation whatsoever. Accordingly, the original lessee constructed Nataraj Cinema Theatre. Later a supplementary lease deed dated 28-11-1966 was also executed whereunder the lessee was given a right of option to extend the period of lease for a further period of 10 years, after the expiry of the30 years period and that such an option should be exercised by a notice in writing within a period of six months before the expiry of the original lease period of 30 years. The original lease was further modified by conferring on the lessee a right to assign the interest in the lease property. In view of this, the original lessee Jainarayan Misra along with the lessors executed a lease deed on 19-8-1968 in favour of M/s. Shinde Brothers, respondent No. 2 herein, for the unexpired portion of the lease period, and ever since M/s. Shinde Brothers have been running the Theatre.

( 2 ) THE period of lease as per the registered lease deed dated 5-3-1962 expired on 5-3-1992. The lessees, respondent Nos. 2 and 3, did not exercise their right of option for extension of lease by notice in writing. The petitioners issued notice dated 17-3-1992 calling upon the respondents to vacate and hand over the premises together with Cinema Theatre since they have no light or interest to run the Theatre after 5-3-1992 or to remain in possession of the premises. On 17-4-1992 an interim reply was sent by the Advocate for the respondent Nos. 2 and 3 which was followed by a detailed reply dated 25-4-1992 stating mat option was exercised on 20-5-1991. As the respondent Nos. 2 and 3 did not vacate the premises, the petitioners filed O. S. No. 295 of 1992 on the file of the III Additional Judge, City Civil Court, Secunderabad for eviction of the respondents and for recovery of possession. As the possession of respondent Nos. 2 and 3 is not lawful after 5-3-1992, the petitioners filed an application before the Licensing Authority (Commissioner of Police, Hyderabad) on 28-9-1992 not to grant or renew any licence to respondents No. 2 and 3 under A. P. Cinema Regulation Act, 1955 read with the rules thereunder. The Licensing Authority by its order dated 4-12-1993 cancelled the licence issued in the name of respondent Nos. 2 and 3. Aggrieved by the said order, respondent No. 3 filed an appeal before the Government which was allowed on 28-9-1994, which is questioned in this writ petition.

( 3 ) IN the counter-affidavit filed by respondent Nos. 2 and 3, it is stated that respondent Nos. 2 and 3 have exercised the option as contemplated by the supplementary lease by sending a letter by Certificate of Posting on 20-5-1991. In addition to that, a copy of the letter was also personally handed over by the Manager of the Theatre Gannu Singh to the petitioners. As the petitioners are disputing about the right of respondent Nos. 2 and 3 to continue in possession under the agreement entered into between the parties, they were forced to file O. S. NO. 923 of 1993 in the Court of the XI Assistant Judge, City Civil Court, Secunderabad against the lessors for specific performance of the covenant for extension of the lease period for 10 years and for execution of the deed as well as for an injunction restraining them from interfering with their possess

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