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2012 Supreme(Mad) 1819

High Court of Judicature at Madras
T. MATHIVANAN, J.
The Indian Oil Corporation Ltd., rep. by its Chief Divisional Manager
Versus
Indian Institute of Engineering Technology, rep. by its secretary & Another
A.S.No.669 of 2009
Decided on : 10-04-2012

Advocates appeared:
For the Appellant:S.V. Jayaraman, Senior Counsel for M/s. Anand, Abdul, Vinod & Associates, Advocates.
For the Respondents:S. Parthasarathy, Senior Counsel for N. Damodaran, Advocate.

Headnote:

LEASE RENEWAL - Land Lease Agreement - Section 105 of Transfer of Property Act, 1882 - Rule against perpetuity - The court analyzed the lease agreement, renewal clause, and communications between the parties to determine the validity of the lease renewal. It held that the mere renewal clause does not create a fresh lease and found the defendant's possession of the property after the lease period to be wrongful, leading to the eviction of the defendant. The judgment and decree of the trial court were confirmed.

Fact of the Case:

The plaintiffs filed a suit seeking possession of a leased property and damages for use and occupation against the defendant, who claimed automatic renewal of the lease after the expiry of the original lease period.

Finding of the Court:

The court found that the lease renewal clause did not create a fresh lease and the defendant's possession after the lease period was wrongful, leading to eviction.

Issues: Validity of lease renewal, determination of tenancy, possession of the defendant, and damages for use and occupation.

Ratio Decidendi: The court held that the mere renewal clause does not create a fresh lease and found the defendant's possession of the property after the lease period to be wrongful, leading to eviction.

Final Decision: The appeal was dismissed, and the judgment and decree of the trial court were confirmed. The defendant was granted two months to deliver possession of the property.

Judgment :

1. Challenge is made in this appeal to the Judgment and Decree dated 17.07.2008 and made in O.S.No.5000 of 2007, on the file of the learned VI Additional Judge, City Civil Court, Chennai.

2. The defendant in the suit is the appellant herein, whereas the plaintiffs are the respondents.

3. For easy reference, the original legal character of the parties to the suit may not be changed and be it as it is in the suit.

4. The facts, which are absolutely necessary for the disposal of the appeal are as under:

4.1. The suit is filed by the plaintiffs against the defendant seeking the following remedies:

i. to quite and deliver vacant possession of the piece, part and parcel of the plot of land to an extent of 8995 sq.ft., situated in Survey No.327/1, Arcot Road, Kodambakkam, Chennai-24, after removing the installations, fixtures, fittings, super structure and buildings thereon; ii. to pay a sum of Rs.4,80,000/-being the past damages payable for the use and occupation of the suit property, together with the interest at the rate of 18% per annum for the said sum of Rs.4,80,000/- from the date of the plaint till the date of realisation;

iii. to pay future damages at the rate of Rs.22,000/-per month from 01.07.2007 till the date of delivery of possession of the suit property; and

iv. to pay costs of the suit.

4.2 The first plaintiff is a society registered under the Societies Registration Act. It was formed with an object of establishing educational institution. The second plaintiff institution was formed by the first plaintiff for the said purpose.

4.3. The suit property measuring an extent of 8995 sq.ft., is situated in Survey No.327/1 (part), Arcot Road, Kodambakkam. It forms part and parcel of larger extent of land owned by the first plaintiff. The defendant is the Indian Oil Corporation Limited, a Government of India undertaking. The had approached the plaintiffs for leasing out the suit property for the purpose of erecting petrol/high speed diesel oil pumps and also selling petroleum products on monthly rental basis. Since the plaintiffs had also agreed to let out the suit property to the defendant, a lease agreement (Ex.A2) was entered into between the plaintiffs and the defendant on 18.07.1972 and the same was also duly registered.

4.4. The tenancy is according to English calendar month as per the clauses contained in the lease agreement dated 18.07.1972. The defendant was allowed to occupy the suit property for a period of twenty years commencing from 01.06.1972. The monthly rent is payable at the rate of Rs.700 for the first five years, Rs.950/-for the next five years and Rs.1,200/- for the next ten years payable on or before fifth day of succeeding month.

4.5. The defendant has been running the petrol bunk through its dealer, Vega Service Station. The lease period as agreed between the parties had expired as early as on 31.05.1992. Hence, the second plaintiff through their letter dated 25.02.1992 (Ex.A4) had expressed their inability to renew the lease for further period and therefore asked the defendant to surrender vacant possession of the suit property. Since the defendant had refused to do so, the plaintiffs had sent notices through their counsel dated 23.03.1993 (Ex.A7) and 29.01.1998 (Ex.A9) demanding to quite and deliver vacant possession of the suit property.

4.6. Even for these two notices, the defendant had not responded. The defendant is not entitled to remain in possession of the suit property after the expiry of the lease period and that too after the termination of the lease by the plaintiffs mutaully. The defendant’s possession of the suit property after the expiry of the lease period is illegal and in any event they are trespassers with effect from 31.05.2002 in the eyes of law.

4.7. The defendant by wrongly interpreting the clauses contained in the lease deed dated 18.07.1972 has claimed automatic renewal of lease after 31.05.1992 and has failed to deliver vacant possession of the suit property.











































































































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