Renewal of lease under the provisions of Section 5(2) of Act, 1976.

1. The first respondent in both the second appeal filed the suits in O.S.Nos.390 of 391 of 1994 on the file of the District Munsif Court, Thiruthuraipoondi against the appellant and the second respondent for recovery of possession and for damages for use and occupation of the suit properties. Under the registered lease deed dated 24.4.1947 the site was leased out to the then Burmah Shell Company to run their retail outlet. Similarly, with respect to another portion of the land a separate lease arrangement was entered into by the said company on 9.3.1951 by a registered document. According to the plaintiff/first respondent, the period of lease was fixed till 14.3.1977. The appellant/first defendant had become the successor-in-interest of the said Burmah Shell Company and had duly attorned to the plaintiff the said leases and they have been paying the rent. The plaintiff in the year 1991 requested the appellant to give vacant possession of the property. The appellant took a stand in the reply dated 8.3.1991 that it is having a right of renewal for similar period. But the said right was never acted upon. So a notice was caused through his Advocate on 21.3.1994 which was replied by the appellant on 26.4.1994 reiterating the abovesaid stand. So, the first respondent filed the abovesaid suits. The appellant filed the written statement stating that in view of Act 2 of 1976 the appellant is entitled for renewal for further period of 30 years from 15.5.1977 and so the suits are not maintainable. The trial court accepting the case of the appellant/first defendant dismissed the suits. Aggrieved, the plaintiff filed appeals in A.S.Nos.136 and 137 of 1997 on the file of the District Court, Nagapattinam. The lower appellate court found that the lease was not renewed and so the plaintiff is entitled for possession of the suit properties. Still aggrieved, the appellant/first defendant has filed the above second appeals.

2. The learned counsel appearing for the appellant has submitted that in view of Sec.11 of Act 2 of 1976 the lower appellate Court is not correct in saying that in view of Sec.107 of the Transfer of Property Act, unless the lease is renewed by way of registered document, the plaintiff/first respondent cannot claim any right in the suit properties. He has further submitted that though the appellant offered for renewal, the first respondent did not take any steps to renew the same, and in such circumstances if the stand taken by the plaintiff is accepted, the object of the said Act itself would be defeated. I am not able to accept the said submission. If there is a clause for renewal in the lease deed, it has to be taken as it gives the option for renewal, and it cannot be said that by exercising the option, it has to be construed that the lease was renewed. I seek support for this conclusion from the decision rendered by Ismail, J., as he then was, in R.Mehta v. Hindustan Photo Films Manufacturing Co. R.Mehta v. Hindustan Photo Films Manufacturing Co. R.Mehta v. Hindustan Photo Films Manufacturing Co., (1976)1 MLJ. 115. Admittedly, in this case, the renewal was not effected.

3. The learned counsel for the appellant has sought to rely on Sec.11 of the Act 2 of 1976 in support of is submission that Sec.107 of the Transfer of Property Act cannot be pressed into service. The provisions of the Act 2 of 1976 do not contemplate any deeming provision, regarding renewal as held by the courts after construing the scope of Sec.5 of the Act 2 of 1976. It is only an option given to the lessee. So, in the absence of any deeming provision regarding renewal, Sec.107 of the Transfer of Property Act cannot be construed as inconsistent to Sec.5 of the Act 2 of 1976.

4. While dealing with similar objection raised, Jagadeesan, J., in Bharat Petroleum Corporation Limited, Madras v. Ravi Bharat Petroleum Corporation Limited, Madras v. Ravi Bharat Petroleum Corporation Limited, Madras v. Ravi, (1997)1 MLJ. 287hasheld as follows:

“However, th