The court established that a tenant in possession with a covenant for renewal in his favor can resist eviction by the landlord without filing a suit for specific performance if he has validly exercised the option and if the suit for specific performance of the agreement for renewal is not barred by limitation on the date of the landlord's suit, on the equitable principles of part performance recognized under the Transfer of Property Act.

These two appeals by the plaintiff arise out of a suit for recovery of possession of the plaint schedule property. S.A. No. 595/85 is against the judgment in AS. No. 59/83 and S.A. No. 595/85 is against the judgment in A.S. No. 60/83. The suit is for recovery of possession of the plaint property, which was leased out to the defendant for a period of 10 years with effect from 1-11-1970. This is evidenced by a lease deed executed on 13-11-1970 (Ext. A1). The land was demised on lease to the defendant for the construction of a petrol bunk. According to the terms of the lease the defendant was liable to pay a monthly rent of Rs. 350/- for the first five years and Rs. 400/- for the next five years. There is also a covenant providing an option to the tenant to renew the lease for a further term on the expiry of the lease, on terms to be agreed upon at that time. The term expired on 1-11-80. According to the plaintiff, if the defendant wanted to renew the lease, he should have exercised the option on the expiry of the lease on 1-11-1980. He did not exercise the option and accordingly the defendant is not entitled to continue in possession of the property. Accordingly the plaintiff issued a registered notice dated 17-11-1980 stating that the term had expired, that there was no request for renewal and that the plaintiff is not willing to continue the lease arrangement and demanded surrender of possession by the defendant. The defendant did not surrender and accordingly the plaintiff filed the suit for recovery on 29-11-1980 on the above allegations.

2. The defendant filed a written statement in which it was contended that even before the expiry of the lease the defendant had intimated the plaintiff orally his desire to renew the lease and that he was prepared to execute a renewed lease deed. But as the plaintiff and the defendant were on cordial terms, the plaintiff represented that considering the friendly relationship there need not be a formal document and that a fresh lease can be executed at any convenient time. Accordingly the defendant continued as a lessee. He also contended that he was in possession of the land even before Ext.A1, that he reclaimed the land and has constructed buildings thereon for the purpose of a petrol bunk and that he is entitled to the protection under S.106 of the Kerala Land Reforms Act. It was further contended that he had effected substantial improvements in the property and that the suit without offering the value of improvements is not maintainable in law.

3. The trial court raised the necessary issues and as the defendant claimed protection under S.106 of the Act, that issue was referred to the Land Tribunal. The Land Tribunal returned a finding stating that the defendant is en titled to fixity of tenure under S.106. The trial court also found that the defendant had not renewed the lease by exercising the option as provided in Ext.A1 lease. That court also found that the suit is perfectly maintainable; but accepting the finding of the Land Tribunal that the defendant is entitled to fixity of tenure, the suit was dismissed by the trial court.

4. Against the dismissal of the suit the plaintiff filed an appeal before the lower appellate court which was numbered as AS. No. 59/83. The defendant also filed an appeal, A.S.No.60/83 against the finding of the lower court regarding the maintainability of the suit, value of improvements and also whether he is entitled to a renewal or not. These appeals were heard together and the lower appellate court came to the conclusion that the defendant is not entitled to fixity of tenure under S.106 of the Land Reforms Act as there is absolutely no evidence to show that the defendant had constructed any building in' the property before 20-5-1967. The appellate court also found that the defendant had properly exercised the option for renewal of the lease. On the question of value of improvements, the lower appellate court held that the defendant is entitled to