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Madras High Court
RAMAPRASADA RAO,RATNAVEL PANDIAN
Union of India - Appellant
Versus
Andhra Bank Ltd., Madras - Respondent
Decided On : 12/11/1975
LANDLORD AND TENANT - TENANCY - DETERMINATION - HOLDING OVER - LIABILITY FOR RENT OR DAMAGES - JURISDICTION OF COURT TO FIX FAIR AND EQUITABLE RENT - TRANSFER OF PROPERTY ACT, 1882, SS. 106, 116.
Fact of the Case:
9/4016 29th August 1963 The Executive Engineer, Madras Central Division, C. P. W. D., Madras Without prejudice Dear Sir, Re : Premises-rent With reference to your letter No. 3722-M, dated 27-8-1963, we have to state that the amount of Rs. 7,500 was received without prejudice to our legal adviser's letter No. 248/63 dated 24-3-1963, and kept in suspense account. If you require further lease, we are prepared to renew the lease for a further period of three years from 1-4-1963 on an enhanced rent of Rs. 2,400 per month at Rs. 40 per 100 sq. ft. The C. P. W. D. pays rent Rs. 45 to Rs. 50 per 100 sq. ft. to our next building 'Mysore Bank Building.' Due to high cost of maintenance and increase in local taxes, we were compelled to enhance the rent, as above. We are not in favour of continuing the lease at Rs. 1,500 p. m. any further. Please treat the matter as specially urgent and communicate your acceptance to us immediately. Yours faithfully Sd ... ... .. .. Manager.
Finding of the Court:
The learned City Civil Judge framed the following issues- 1. Whether the suit is maintainable, in view of the Arbitration clause in the lease deed ? 2. Whether the plaintiffs can appropriate rents at the alleged enhanced rate, when there has always been a specific appropriation by the defendants ? 3. Whether the alleged damage to electrical fittings and electrical installations is not due to normal wear and tear in use ? 4. Whether the alleged enhanced rent can be claimed by means of this suit ? 5. To what relief ? Additional Issue : 6. Whether there was any contract to pay rent at Rs. 2,400 per month ? He ultimately decreed the suit for Rupees 25,550 with proportionate costs and found that the alleged damages to the electrical fittings and installations have not been made out. He accepted that by reason of the continuance of the defendants in the premises and since they did not repudiate the demand for enhanced rent, the defendants should be deemed to have signified their consent for payment of such increased rent.
Issues: 1. Whether the suit is maintainable, in view of the Arbitration clause in the lease deed ? 2. Whether the plaintiffs can appropriate rents at the alleged enhanced rate, when there has always been a specific appropriation by the defendants ? 3. Whether the alleged damage to electrical fittings and electrical installations is not due to normal wear and tear in use ? 4. Whether the alleged enhanced rent can be claimed by means of this suit ? 5. To what relief ? Additional Issue : 6. Whether there was any contract to pay rent at Rs. 2,400 per month ?
Ratio Decidendi: 1. If a tenant at sufferance continues to occupy the premises after the determination of the lease, then he cannot unjustly enrich himself by claiming that he will pay only the quondam rent and not a reasonable rate of damages for use and occupation of the premises. 2. If he assents to pay the enhanced rent demanded at a time when the landlord determines the lease, then there is no difficulty at all. He will be considered as a tenant holding over on the basis of a new contract of lease as between himself and the landlord. 3. If the tenant, in spite of the warning, contumaciously remains in possession of the premises, the landlord secures a right to get a reasonable compensation from the tenant for such occupation, but it need not necessarily be the enhanced rate of rent claimed by him; but in no circumstances, it can exceed the enhanced rate demanded by him. 4. The Court should investigate and it has the jurisdiction to do so, and find in its discretion whether the enhanced rate claimed by the landlord, in such circumstances is penal or otherwise equitably justified. 5. The Court has the power and indeed the discretion to fix a fair and equitable rent in such situations.
Final Decision: The appeal is allowed in part, but there will be no order as to costs.
RAMAPRASADA RAO, J.:- The Union of India and the Executive Engineer, C. P. W. D., Madras, who were the defendants in O. S. No. 5383 of 1967, City Civil Court, Madras, are the appellants. The Andhra Bank Ltd., owned premises No. 6 Linghi Chetti St., Madras-1, which had three floors. The Executive Engineer, C. P. W. D., on behalf of the Union of India took on lease the second and the third floors of the above premises on 1-7-1955, on a monthly rent of Rs. 1,150 and on an increased rent of Rs. 1,500 with effect from 1-7-1959. Certain fittings and fixtures also formed part of the demise. The tenancy continued without any complexity till 30-6-1962 by which time, the period of the lease expired. The plaintiffs under Ex. B-2 made it known that on the expiry of the lease, they were not willing to renew the lease and also put on notice the defendants of the fact that they have not expressed their desire in writing for renewal of the lease as contemplated in the original agreement of lease. Under Ex. B-2, the plaintiffs also notified the defendants that they were in arrears of rent by then. Under Ex. B-3, dated 24-12-1962, the defendants expressed their desire to continue as tenants of the premises in question on the same terms and conditions for a further period of three years. On receipt of this, the plaintiffs through their lawyer and under Ex. A-1, determined the tenancy of the defendants, as there was no notice in accordance with the terms of the original lease from the defendants requesting for a renewal of the lease for a further term. The defendants were, therefore, called upon to quit and deliver vacant possession. This was followed by another letter Exhibit A-2, which ran as follows:
"9/4016 29th August 1963 The Executive Engineer, Madras Central Division, C. P. W. D., Madras Without prejudice Dear Sir, Re : Premises-rent
With reference to your letter No. 3722-M, dated 27-8-1963, we have to state that the amount of Rs. 7,500 was received without prejudice to our legal adviser's letter No. 248/63 dated 24-3-1963, and kept in suspense account. If you require further lease, we are prepared to renew the lease for a further period of three years from 1-4-1963 on an enhanced rent of Rs. 2,400 per month at Rs. 40 per 100 sq. ft. The C. P. W. D. pays rent Rs. 45 to Rs. 50 per 100 sq. ft. to our next building 'Mysore Bank Building.'
Due to high cost of maintenance and increase in local taxes, we were compelled to enhance the rent, as above. We are not in favour of continuing the lease at Rs. 1,500 p. m. any further. Please treat the matter as specially urgent and communicate your acceptance to us immediately.
Yours faithfully
Sd ... ... .. ..
Manager."
The plaintiffs made their position clear under Ex. A-2, that they were not willing to extend the period of the lease and accept the defendants as tenants, unless they were prepared to pay an enhanced rent of Rs. 2,400 per month. They set out the hypothesis under which they have estimated the rent at Rs. 2,400. After an attempt was made by the State Government to requisition the demised property for the use and occupation of the Union Government, which apparently, did not fructify as is seen from Ex. B-1, which is a letter from the Collector of Madras to the defendants, the result was that the defendants were continuing in possession of the property after the determination of the lease and after the landlords have made it clear that they sho
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