High Court Of Delhi
STATE BANK OF BIKANER AND JAIPUR - Appellant
Versus
I.S.RATTA - Respondent
R.F.A. : 31 of 1997
Decided On : 05/20/2005
lease - renewal clause - Delhi Rent Control Act - Section 107 of the Transfer of Property Act
Fact of the Case:
The appellant bank leased a flat for seven years with an option to renew for a further five years. After the expiry of the lease, the bank deposited rent in the joint account of the respondents, claiming automatic extension of the lease. The respondents filed a suit for possession, arrears of rent, and mesne profits.
Finding of the Court:
The Trial Court held that the lease expired, and the bank held over as a tenant. The notice terminating the tenancy was valid, and the bank was liable for possession, arrears of rent, and mesne profits. The Division Bench upheld the possession decree and directed an inquiry for mesne profits.
Issues: Validity of lease extension, waiver of notice, legal heirs, damages, possession entitlement, and relief.
Ratio Decidendi: The lease did not automatically renew, and possession was held over. The notice terminating the tenancy was valid. The quantum of mesne profits was remitted for inquiry.
Final Decision: The possession decree was upheld, and the quantum of mesne profits was remitted for inquiry.
( 1 ) THE present appeal has been preferred by the appellant bank as against the judgment and decree dated 28th January, 1997 passed by the Addl. District Judge, Delhi in Suit No. 6/89. The appellant was a tenant under the respondents in respect of flat No. 3, First Floor along with Mezzanine floor, located at Barakhamba Road, New Delhi (for short the flat ) having approximate area of 1443 sq. ft.
( 2 ) THE facts in brief are that the suit premises, namely, the flat in question was leased out in favour of the appellant by the respondents through a registered lease deed dated 28th October, 1975 for a period of seven years commencing from 1st October, 1975. The said lease deed contained a renewal clause to the following effect:
"to hold the demised premises upto the bank for the term of seven years to be computed from 1st day of October, One thousand nine hundred and seventy five with option to the lessee of renewing the lease of the demised premises for a further period of five years subject to the condition hereinafter contained. "
( 3 ) PURSUANT to the aforesaid renewal clause, the bank exercised its option by writing a letter dated 24th June, 1982 for renewing the lease for a further period of five years on the same terms and conditions. The aforesaid renewal was for five years from 1st October, 1982 to 30th September, 1987. After the expiry of the aforesaid period of lease, the respondent herein did not accept any amount towards rent whereupon the bank, the appellant herein started depositing the amount of rent in a joint account of the respondents maintained by them with the Chandigarh branch of the bank. According to the bank, in view of such deposit of the rent in the joint bank account of the respondents, the lease stood automatically extended for a further period of five years upto 30th september, 1992 and that due to the aforesaid position, the notice dated 10th december, 1988, terminating the tenancy also stood waived.
( 4 ) IN view of the aforesaid lis between the parties, the respondents instituted a suit in the Court of Addl. District Judge, Delhi, which was registered as Suit No. 6/89. In the aforesaid suit, the carpet area of the suit property was mentioned as 1443 sq. ft. In the said suit, two preliminary issues were framed to the following effect : " (a) Whether the suit is or is not maintainable in view of the amendment of Delhi Rent Control Act/onus on parties? (b) Whether the suit is not properly valued for the purposes of Court fee and jurisdiction is beyond the pecuniary jurisdiction of this court"? OPD
( 5 ) BY order dated 27th October, 1990, the aforesaid two issues were decided against the appellant herein. The parties thereafter were taken to trial on the following issues:
" (I) Is there no valid termination of tenancy and the suit is not maintainable? -OPD (ii) Whether the plaintiff has consented for renewal of lease for 5 years with effect from 1. 10. 87? If so, to what effect? -OPD (iii) What is the effect of payment of rent by the defendants at the rate of Rs. 5,572/- from 1st October, 1982 to 31st December, 1988? -OPD (iv) Whether plaintiff Nos. 2 to 7 are not the legal heirs of deceased natha Singh? -OPD (v) What is the effect of non-termination of tenancy by plaintiff Nos. 8 to 10? -OPD (vi) If issue No. 1 is proved against the defendants, are the plaintiffs entitled to any damages? If so, at what rate and for what period? -OPP (vii) Are the plaintiffs entitled for possession? -OPP (viii) Relief. "
( 6 ) THE Trial Court in the judgment and decree dated 8th July, 1992 passed in Suit No. 6/89 held that the period of lease expired on 30th September, 1987. Possession of the bank thereafter was held to be as a tenant holding over from month-to-month. The Trial Court also held that the tenancy stood validly determined by service of notice dated 10th December, 1988. Payment of rent by the bank for the period from 1st October, 1987 to 31st December, 1988 was held as not amounting to w
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