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1983 Supreme(All) 335

IN THE HIGH COURT OF ALLAHABAD
K. C. Agrawal, A. N. Verma and V. K. Khanna, JJ.
BURMA SHELL OIL STORAGE AND DISTRIBUTING CO.OF INDIA LTD. - Appellant
Versus
STATE OF UTTAR PRADESH - Respondents
Second Appeal 363 Of 1971
Decided On : 11/10/1983

Advocates Appeared:
SWAMI DAYAL

The contract regarding the period of notice required under Section 106 of the Transfer of Property Act could be either in the original lease or may be arrived at between the parties after the determination of the original lease.

Headnote:

TRANSFER OF PROPERTY ACT, 1882 - SECTION 116 - RENEWAL OF LEASE - CONTRACT TO THE CONTRARY - PERIOD OF NOTICE - CAN BE IN ORIGINAL LEASE OR SUBSEQUENT TO ITS TERMINATION.

Fact of the Case:

The question referred to the Full Bench was whether, for the purposes of Section 116 of the Transfer of Property Act, it was necessary that there should be a contract subsequent to the termination of the original lease regarding the period of notice required under Section 106, T. P. Act.

Finding of the Court:

The Full Bench held that it is not necessary that there may be a contract subsequent to the termination of the original lease regarding the period of notice required under Section 106 of the Transfer of Property Act. The contract could be either in the original lease or may be arrived at between the parties after the determination of the original lease.

Issues: Whether, for the purposes of Section 116 of the Transfer of Property Act, it was necessary that there should be a contract subsequent to the termination of the original lease regarding the period of notice required under Section 106, T. P. Act.

Ratio Decidendi: The court held that the words "in the absence of a contract to the contrary" in Section 116 of the Transfer of Property Act mean that the contract could be either in the original lease or may be arrived at between the parties after the determination of the original lease. The court also held that the terms and conditions of the new lease would be the same as the original lease except that it would be a lease from year to year or from month to month according to the nature of the tenancy, the other conditions remaining the same.

Final Decision: The Full Bench answered the question referred to it in the affirmative, holding that it is not necessary that there may be a contract subsequent to the termination of the original lease regarding the period of notice required under Section 106 of the Transfer of Property Act. The contract could be either in the original lease or may be arrived at between the parties after the determination of the original lease.

V. K. KHANNA, J.

( 1 ) THE following question of law has been referred for the opinion of the Full Bench:-" whether, for the purposes of Section 116 of Transfer of Property Act, it was necessary that there should be a contract subsequent to the termination of the original lease regarding the period of notice required under Section 106, T. P. Act. "

( 2 ) ACCORDING to the learned single Judge there was a clear conflict of opinion expressed in two division Bench decisions of this Court reported in Radha Ballabh v. Bahore Ram Chand, (AIR 1955 All 679) and Zahoor Ahmad Abdul Sattar v. State of U. P. , (AIR 1065 All 326 ). The learned single Judge in the referring order has held that the earlier Division Bench (Radha ballabh supra), has held that "the contract to the contrary" mentioned in Section 116 of Transfer of property Act may be the one contained in the original lease and it was not necessary that such a contract must necessarily be arrived at after the old lease comes to an end while the latter division Bench in the case of Zahoor Ah-mad Abdul Sattar (supra) has held that such a contract to the contrary must necessarily be arrived at or after the holding over by the contractual tenant commences. The period of notice also was held to be dependent on the "purpose" of the lease.

( 3 ) AS far as our High Court is concerned, the following cases have dealt with the question referred to this Full Bench:- (1) Badal v. Ram Bharose, (AIR 1938 All 649); (2) Suiti Devi v. Banarsidas Bhagwan-das, (AIR 1949 All 703); (3) Radha Ballabh v. Bahore Ram Chand, (AIR 1955 All 679); (4) Zahoor Ahmad Abdul Sattar v. State of U. P. , (AIR 1965 All 326); and (5) Shiv Nath v. Shri Ram Bharosey Lal, (AIR 1969 All 333) (FB ).

( 4 ) IN the case of Badal (supra) a learned single Judge of this Court held that it was settled law that when the lessee holds over after the expiry of the term fixed by the lease, the relations between the parties are governed by the same terms as are embodied in the original lease.

( 5 ) IN the case of Suiti Devi, (AIR 1949 All 703) (supra) a Division Bench of this Court while construing the provisions of Sections 116 and 106 of the Transfer of Property Act and after reviewing the earlier authorities of this Court held:-" with the greatest respect we find it difficult to follow the reasoning of the decision in Dasarathi kumar v. Sarat Chandra Ghose, AIR 1934 Cal 135 : (149 1c 722 ). Under Section 116 in the absence of an agreement to the contrary, if a tenant remains in possession of the property leased to him after the determination of the period of the lease, and the lessor accepts the rent from him, the tenancy is renewed from year to year or from month to month according to the purpose for which the property is leased as specified in Section 106. Referring to that Section we find that a lease for agricultural or manufacturing purposes is deemed to be a lease from year to year terminable by six months notice expiring with the end of a year of the tenancy. This is, however, subject to any contract which the parties may enter into the contrary. In the case before us the contract was that if the property leased was sold either by a private sale or in pursuance of a decree that might be passed in the mortgage suit instituted by the Bank, the lease could be determined by the lessor with three months notice to_ the lessee. In view of such a contract as regards the notice required for determination of the lease, it cannot be successfully contended that the notices issued by Mr. Captain were not good and valid notices as required by the law. . . . . . . . . . . . " from the aforesaid decision it would thus be clear that the Division Bench clearly held that the contract regarding the period of notice could also be earlier to termination of the lease and for the period of notice the original contract was looked into.

( 6 ) IN the case of Radha Ballabh, (AIR 1956 All 679) (supra) a Division Bench of this Court clearly held. " renewal o







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