2018 Supreme(Mad) 4473

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SUBBIAH, C. SARAVANAN, JJ.
M. Shankaran - Appellant
Versus
M. Krishnan - Respondent
Appeal Suit No. 720 of 2002
Decided On : 13-12-2018

Headnote:

Transfer of Property Act,1882 - Sections 17,19,106(3),106(4), 107, 108 111 and 111(h) - Registration Act - Section 49 - Suit for possession of leasehold premises - Termination of lease - Suit for a direction directing defendant to pay sum of lakhs with interest at rate of per annum from date of plaint till realization - According to plaintiff he is a businessman running a leading chain of sweet shops in Coimbatore under name and style of Sweets - According to plaintiff defendant is owner of building bearing Door Raja Street Coimbatore - It is his contention that during year he approached defendant to let out suit property for lease for running a sweet stall - Defendant wrote a letter to plaintiff expressly agreeing to offer property owned by him for lease - In said letter defendant demanded a sum of lakhs as advance apart from monthly lease rent of as a condition precedent for granting lease - Plaintiff also accepted such offer and made payments by means of cheques on various dates from onwards and last payment was made by a cheque bearing Cheque drawn on State Bank of India for - In effect plaintiff made a total payment of lakhs by means of six cheques which are morefully tabulated in Para of plaint - After making such payment plaintiff was put in possession of leasehold premises - Plaintiff and defendant also entered into a Memorandum of Understanding in which various payments made by plaintiff on various dates were incorporated - According to plaintiff tenancy is one at will which is morefully set out in clause of Memorandum of Understanding entered into with defendant which reads as follows - Second party shall have right to assign and/or sublease property - However lease will be terminated at end of ten years subject to clause under which lease can be extended on mutually agreed terms - However Second Party shall have right to terminate lease at any time by giving months notice in writing - Above all defendant had also written letters to plaintiff in which he has acknowledged receipt of sum of lakhs paid towards lease advance - According to plaintiff as per Clause of Memorandum of Understanding plaintiff was granted right to terminate lease at any time he wished - In other words lease is terminable at will and wish of parties to Memorandum of Understanding - Accordingly by invoking terms indicated in Clause of Memorandum of Understanding plaintiff terminated lease by writing a letter giving three months notice as stipulated in clause of Memorandum of Understanding - As per notice lease came to an end even - Even though plaintiff was ready and willing to handover possession of lease hold premises to defendant on same day defendant chose to refuse termination on untenable grounds - According to plaintiff defendant refused termination of lease on ground that latter part of Clause alone is unilateral in nature and it is not binding on him - Further defendant entered into a Memorandum of Understanding which stipulates certain conditions however defendant having signed same is not entitled to contend that Clause alone is not binding on him - Defendant on receipt of notice sent a reply stating that clause of Memorandum of Understanding is unilateral and it will not bind him and consequently termination of lease is not valid - Hence Plaintiff sent a reply through his counsel calling upon defendant to refund advance paid by him - Though plaintiff terminated lease in accordance with terms and conditions which are precedent for such lease defendant is unjustly holding advance amount of with a dishonest intention to cheat him - Hence plaintiff filed suit for refund of lakhs from defendant - Whether plaintiff can be compelled to continue lease for a period of ten years when it was pleaded by defendant that contract between him and plaintiff is an oral contract? Whether termination of lease by plaintiff is valid in eye of law? Whether non-registration of Memorandum of Understanding will have a bearing on plaintiff in claiming refund of advance lease amount from defendant? - Held, Lease is for a period of years commencing from September - However it can be extended for further period on mutually agreed terms and conditions - Second party shall have right to assign and/or sublease property - However lease will be terminated at end of ten years subject to clause under which lease can be extended on mutually agreed terms - However Second Party shall have right to terminate lease at any time by giving months notice in writing - Lease deed relied on by plaintiff was intended to be operative for a period of five years - It is an unregistered instrument - Hence such an instrument cannot create a lease on account of three-pronged statutory inhibitions - First interdict is contained in first paragraph of Section 107 of Transfer of Property Act resultant position is insurmountable that so far as instrument of lease is there is no scope for holding that appellant is a lessee by virtue of said instrument - Court is disabled from using instrument as evidence and hence it goes out of consideration in this case - For same proposition reliance could be made to decision relied on by counsel for plaintiff in case of reported in wherein it was as follows - It is also a well-settled position of law that in absence of a registered instrument Courts are not precluded from determining factum of tenancy from other evidence on record as well as conduct of parties - It is evident from above decisions that it is well settled proposition of law that even in absence of an agreement between lessor or lessee law recognises that such a lease between parties is from month to month and such lease can be determined by giving days notice in advance as per Section 106 of Transfer of Property Act - In such view of matter Court are of view that contract is determinable at instance of plaintiff/tenant however plaintiff was made to enforce contract due to attitude of defendant in refusing to take delivery of vacant possession of leasehold premises when offered by plaintiff - In such a situation argument advanced on behalf of defendant that plaintiff merely expressed his intention to quit but did not actually deliver possession cannot be countenanced - Accordingly by taking recourse to unregistered Memorandum of Understanding plaintiff cannot be compelled to remain in possession of leasehold premises for a term beyond plaintiffs necessity- Accordingly Court answer question in favour of plaintiff and against defendant - Point During subsistence of lease after remaining in possession of leasehold premises for about three years plaintiff sent a letter expressing his intention to quit and deliver vacant possession of lease hold premises on or before by giving three months notice - On receipt of notice defendant sent a letter refusing to take delivery of vacant possession of lease hold premises thereby indirectly made plaintiff to remain in occupation of leasehold premises - In this context it is useful to refer to Section 106, 107, 108 and 111 of Transfer of Property Act which reads as follows Duration of Certain leases in absence of written contract or local usage In absence of a contract or local law or usage to contrary lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year terminable on part of either lessor or lessee by six months notice and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month terminable on part of either less or lessee by fifteen days notice - It is also a well-settled position of law that in absence of a registered instrument Courts are not precluded from determining factum of tenancy from other evidence on record as well as conduct of parties - Appeal dismissed