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SANJIB BANERJEE, J.
Pannalal Sagarmal
versus
Central Bank of India.
G. A. No. 1736 of 2006,
Decided on : 16 -7 -2008.
EVICTION SUIT - LEASE - TRANSFER OF PROPERTY ACT, 1882, SECTION 106 - NOTICE TO QUIT - VALIDITY - REQUIREMENTS - SUMMARY PROCEEDINGS - APPLICABILITY.
Fact of the Case:
Plaintiff sought eviction of the defendant from the suit premises under Chapter XIII-A of the Rules on the Original Side of the Calcutta High Court. The defendant was inducted into the premises in 1962 under a registered lease for 21 years, which expired in 1984. The defendant continued in possession with the landlord's consent and proposed a new lease agreement for seven years with two optional periods of seven years each, subject to a rent increase. The plaintiff claimed that the defendant did not exercise the option to continue for a further period and demanded enhanced rent, which the defendant refused to pay. The defendant sought to continue occupation for another seven years but did not offer the increased rent. The plaintiff issued a notice to quit in 2005, claiming that the maximum period of 21 years had expired.
Finding of the Court:
The court held that the notice to quit issued by the plaintiff was invalid as it did not communicate an obvious decision to determine the lease. The notice proceeded on the basis that the lease stood determined and required the defendant to deliver up possession, but it did not indicate that the lease would stand determined upon the expiry of the 15-day period specified in Section 106 of the Transfer of Property Act. The court found that the defendant had established a right to carry the defense to trial, as it was possible that the terms offered by the defendant in 1984 did not become binding and a more definitive assertion of the determination of the tenancy was required in the notice.
Issues: 1. Whether the notice to quit issued by the plaintiff was valid under Section 106 of the Transfer of Property Act? 2. Whether the defendant had an arguable case to defend the eviction suit?
Ratio Decidendi: 1. A notice to quit under Section 106 of the Transfer of Property Act must communicate an obvious decision to determine the lease and indicate that the lease would stand determined upon the expiry of the 15-day period specified in the section. 2. A defendant has an arguable case to defend an eviction suit if there is a genuine dispute as to the terms governing the tenancy or the validity of the notice to quit.
Final Decision: The court dismissed the plaintiff's application for summary eviction but made no order as to costs.
2. In 1962 the defendant was inducted at premises No. 4, Synagogue Street under a registered lease for a period of 21 years commencing April 1, 1963. The lease expired by efflux of time in April, 1984 but the defendant continued in possession with the apparent consent of the landlord. By a letter of November 15, 1985 the defendant-Bank informed the plaintiff that it desired to enter into an agreement for lease of the said premises for a period of seven years with the opinion of renewal reserved unto it for two successive periods of seven years each. The defendant proposed that the rent be Rs. 68,992/- per month at the rate of Rs. 11/-per sq. ft. for the 6272 sq. ft. area with the rate being increased by 15 per cent for either of the two extended periods. No immediate formal agreement was executed but the defendant continued in possession by paying the monthly rent of Rs. 68,992/-.
3. The plaintiff shows documents to establish that the period of seven years expired without the defendant overtly seeking to exercise its option to continue for a further period of seven years. In fact, the plaintiff's demand of April 29, 1991 on the defendant to pay rent at an enhanced rate of 15 per cent in excess of what had been paid for the initial period of seven years after 1984 went unheeded. The defendant says that it tendered rent at the old rate which the plaintiff went on accepting. In March, 1998 the defendant evinced its desire to continue in occupation for a further period of seven years, but the plaintiff complains that the defendant did not offer the increased rent.
4. There appears to have been letter exchanged between the parties as to which of them should bear the expenses for registration of the deed of lease and it is also apparent that the defendant demanded that the plaintiff share the burden, if not buy the full complement of the stamps. The correspondence between the parties also reveals that the defendant insisted that the rent component be deemed to include the commercial surcharge and the plaintiff was adamant that it should not. The plaintiff has also relied on certain internal documents of the defendant-Bank to try and demonstrate that the terms governing the parties are as the defendant proposed in 1984, notwithstanding the same not having been reduced to writing executed on a formal paper.
5. The plaintiff issued a notice on April 12, 2005 requiring the defendant to quit and deliver up vacant possession of the suit premises. The plaintiff insists that it was under no obligation, in the circumstances, to issue any notice as by the time the notice was issued the maximum period of 21 years envisaged by the terms of the 1984 arrangement had expired. The letter contains the following three material paragraphs :
"Please refer to your letter No. ESTAB No. 24/11/85/135, dated 15th November, 1985 wherein and whereby you had accepted possession on lease term basis for a period of 7 years with two option of 7 years each with 15% increase in each option with some other terms and conditions as mentioned therein.
You are further well aware that seven years with two option with effect from 1st April, 1984 had already been expired on 31st March, 2005 and you are to hand over the possession in vacant condition of the portion under your occupation along with payment of all dues inclusive of the claim already made by our client in the writ petition No. 901 of 2004 but unfortunately you have not done so.
In view you are being requested to arrange for handing over vacant possession of the portion under your occupation within 10 (Ten) days from receipt of this letter as you are well aware you are now holding possession as a trespassers and in-default necessary steps would be taken by our client as per the law for possession and also for realization of their dues including Commercial Surcharge and increment
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