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2023 Supreme(Ker) 886

IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. BADHARUDEEN, J.
Abraham Varghese – Appellant
Versus
Kerala State Civil Supplies Corporation Ltd. - Respondent
RSA NO. 524 of 2022
Decided on : 06-12-2023

Advocates:
Advocate Appeared:
For the Appellant : JOSEPH ABRAHAM (KOTTAYAM), HARISH ABRAHAM

After the termination of the lease, the tenant becomes liable to pay damages for use and occupation at the rate at which the landlord could have let out the premises, and a tenant in occupation after the expiry of the lease is considered a tenant at sufferance and is liable to pay mesne profits.

Headnote:

Transfer of Property Act - Lease Agreement - Section 106, Section 111 - [Continued possession of premises after termination of lease] - [Section 106, Section 111 of Transfer of Property Act] - The court discussed the legal provisions of Section 106 and Section 111 of the Transfer of Property Act, emphasizing that after the termination of the lease, the tenant becomes liable to pay damages for use and occupation at the rate at which the landlord could have let out the premises. The court also referred to relevant case laws to establish that a tenant in occupation after the expiry of the lease is considered a tenant at sufferance and is liable to pay mesne profits. The court held that the landlord is entitled to rent at the agreed rate until the date of vacation of the building and nothing more.

Fact of the Case:

The plaintiff filed a suit for recovery of possession of a building leased to the defendants for running a supermarket. The lease agreement expired, and the defendants continued occupation of the building. The plaintiff sought recovery of possession and damages for use and occupation.

Finding of the Court:

The court held that the defendants, as tenants, continued possession of the building after the termination of the lease, making them liable to pay damages for use and occupation at the rate at which the landlord could have let out the premises. The court also found that the plaintiff was entitled to rent at the agreed rate until the date of vacation of the building and nothing more.

Issues: The issues involved the continued possession of the premises after the determination of the lease, the liability of the tenant to pay damages for use and occupation, and the quantum of damages to be paid by the tenant.

Ratio Decidendi: The court established that after the termination of the lease, the tenant becomes liable to pay damages for use and occupation at the rate at which the landlord could have let out the premises. The court also clarified that a tenant in occupation after the expiry of the lease is considered a tenant at sufferance and is liable to pay mesne profits.

Final Decision: The appeal was dismissed, and the plaintiff was entitled to rent at the agreed rate until the date of vacation of the building and nothing more.

JUDGMENT :

This Second Appeal has been filed under Order XLII Rule 1 read with Section 100 of the Code of Civil Procedure (`C.P.C' for short hereafter) challenging the decree and judgment in A.S.No.76/2019 dated 18.01.2022 on the files of Additional District Court-V, Kottayam, arose out of the decree and judgment in O.S.No.382/2017 on the files of the Additional Munsiff Court, Kottayam.

2. Heard the learned counsel for the appellant/plaintiff and the respondents/defendants.

3. I shall refer the parties in this appeal with reference to their status before the trial court, as `plaintiff’ and `defendants’ hereafter for easy reference.

4. Perused the verdicts under challenge and the copies of documents placed by the learned counsel for the plaintiff, form part of the trial court records.

5. As on 29.08.2022, my learned predecessor, as per order dated 29.08.2022, admitted this appeal raising the following substantial questions of law:

    1) Whether continued possession of the premises after the determination of the lease, under Section 106 of the Transfer of Property Act, not illegal or unlawful?

(2) When tenancy stands terminated, whether non granting of damages for the use and occupation of the premises, is not illegal?

6. The case of the plaintiff in brief:

The plaintiff filed a suit for recovery of possession of building bearing No.VI/192-C (New No.XII/229) situated in Kumarakom Grama Panchayath, which was given for rent to the defendants for running Supply Co outlet. The case of the plaintiff before the trial court was that on 18.10.2011 the defendants took the building on lease agreeing to pay monthly rent of Rs.12,101/-for conducting Supermarket and the period of agreement was for 5 years, which expired on 10.11.2015. Thereafter the defendants continued occupation of the building as tenant by holding over. On 23.11.2017, the plaintiff issued notice to the defendants for termination of the lease agreement w.e.f 30.04.2017 and sought recovery of possession along with damages for use and occupation @ Rs.25/- per square feet.

7. The defendants appeared and filed written statement. Defendants admitted execution of the lease agreement in between the plaintiff and the defendants and it was contended by the defendants that it was agreed between the parties to continue the lease arrangement for 15 years from 30.04.2017. Therefore the relief of recovery of possession, was opposed.

8. Trial court proceeded with trial. PW1 and PW2 were examined and Exts.A2 to A8 were marked on the side of the plaintiff. Exts.B1 and B2 were marked on the side of the defendants.

9. In this mater, the lease deed executed in between the plaintiff' and the defendants was for a period of 5 years and the same was not registered. Accordingly, the said document was not read in evidence, as inadmissible. But the parties would admit that the defendants took possession of the building as a lessee to run the supermarket.

10. The learned counsel for the defendants submitted that during pendency of the Second Appeal, the defendants surrendered the building back to the plaintiff and also paid arrears of rent @ Rs.12,101/- till the date of surrender.

11. The learned counsel for the plaintiff' also conceded the surrender as submitted and payment of rent @ Rs.12,101/-. But the contention raised by the learned counsel for the plaintiff' is that since the tenancy was terminated w.e.f 30.04.2017, the defendants are bound to pay damages for use and occupation to the tune of Rs.25/-per square feet. It is also submitted that the trial court granted Rs.15,000/-per month for use and occupation from 30.05.2017 till the date of vacant possession. But the appellate court interfered with the said verdict of the trial court and set aside the said finding.

12. In the case at hand, even though the lease agreement executed in between the plaintiff' and the defendants is one for 5 years, the lease agreement is inadmissible in evidence for want of registration, the parties would agree that the arrangement

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