Effect of failure of Court to extend tenure of lease.

Nainar Sundaram; J.:

This appeal is directed against the judgment and O.S.No.2439 of 1981, on the file of the Second Additional City Civil Judge, Madras defendant is the appellant and the plaintiff is the respondent. The facts leading to the may be traced as follows:

On 7.8.1964, an agreement of lease, as per Ex.A-1, was into between the plaintiff and Esso Standard Eastern Inc., in and by which a lease of land was given to the defendant. It is sufficient if we recapitulate only the relevant the lease. The period of lease was from 1.7.1964 to 30.6.1974. There was a payment advance of Rs.15,600 to be adjusted from half of the monthly rent for the first four Clause 3(d) of the lease contemplated the renewal of the lease and since a part controversy in this appeal arises out of this clause, we feel obliged to extract the said as follows:

“That the landlord will on the written request of the tenant made 2 calendar months the expiry of the term hereby created and if there shall not at the time of such request existing breach or non-observance of any of the covenants on the part of the hereinbefore contained grant to it a lease of the demised premises for the further term years from the expiration of the said term at the rate of Rs.910 (Rupees nine hundred ten only) per month and containing the like covenants and provisions as are contained except the renewal option clause.”

On 15.2.1974, as per Ex.A-2, Esso Standard Eastern Inc. by a letter purported to the option for renewal also suggesting the inclusion of the following clause, in the lease document:

“The lessee shall be at liberty to determine this agreement by giving to the lessor months’ notice in writing expiring at any time during the currency of this agreement. On 30.3.1974, as per Ex.A-3, the plaintiff apprised the defendant that the renewal lease shall be on the same terms and like conditions as in the original lease excepting renewal option clause. The plaintiff in the said letter also indicated that mutual negotiations over the terms of renewal cannot be ruled out. It must be noted here that after Ex.A before Ex.A-3, the Esso (Acquisition of Undertakings in India) Act 4 of 1974 came on 13.3.1974. On 15.4.1974, as per Ex.A-4 the successor to Esso Standard Eastern namely, Esso Standard Refining Company of India Limited, addressed a letter to the in the following terms:”

We write with reference to our Reg. Ack. due letter 5150/MV of February 15, 1974 reply dated 30.3.74. Inasmuch as you are not in favour of including a 3 months clause for determining the agreement please treat our request as withdrawn. We forwarding to you our draft lease embodying the same terms and covenants as contained our earlier registered lease. As per clause 3(d) of the lease, we have also exercised option for renewal of the lease for a further period of ten years commencing July 1,1974 rental of Rs.910 p.m. on the same terms and conditions contained in the earlier for lease. ”On 4.6.1974, as per Ex.A-5, the said company forwarded a draft lease in duplicate plaintiff. On 20.6.1974, as per Ex.A-6, the plaintiff replied to Esso Standard Company of India Limited that without the payment of advance there can be no question renewal of the lease. On 5.7.1974, as per Ex.A-7, the plaintiff by addressing a letter Esso Standard Refining Company of India Limited declined to accept a cheque purporting be the rent for the month of July, 1974 and pointed out that the draft renewal been rejected by the plaintiff since it violated the condition precedent for the exercise option for renewal with regard to the payment of advance and the plaintiff wanted of possession of the property. With effect from 12.7.1974, consequent on the LUBE (India) Limited with Esso Standard Refining Company of India Limited, the name amalgamated Corporation stood changed to Hindustan Petroleum Corporation Limited, the defendant in the suit. On 15.7.1974, as per Ex.A Standard Refining Company of India Limited, wrote to the plainti