1964 Supreme(All) 182

Allahbad High Court
N.U.BEG,G.D.SAHGAL
Zahoor Ahmad Abdul Sattar - Appellant
Versus
State of U. P. - Respondent
Decided On : 10/23/1964

Headnote:

LANDLORD AND TENANT - LEASE - RENEWAL - HOLDING OVER - TERMS AND CONDITIONS OF RENEWED LEASE - INTERPRETATION OF SECTION 116 OF THE TRANSFER OF PROPERTY ACT, 1882 - ENHANCEMENT OF RENT - NOTICE TO QUIT - SPECIAL COSTS.

Fact of the Case:

The defendant-appellant erected a paddy husking mill in a piece of land situated in Chandan Chowki, Sonaripor Range in the North Kheri Forest Division. The land was originally taken for a sum of Rs. 100/- as rent for one year from the 1st of March, 1947. A subsequent lease for the same sum of Rs. 100/- was executed on the 10th of June, 1948 for one year beginning the 10th on March, 1948. Thereafter, the defendant continued to remain in possession of the land, and the terms were eventually settled. The Government directed that the normal procedure of inviting tenders be followed, and the highest bid offered was to be referred to the Government for sanction in case any concession was proposed. The Government also pointed out that the terms granted to the lessees were much too favourable and should be revised. The Chief Conservator was asked to submit proposals for changes in these terms as may be fair to both parties. The Divisional Forest Officer wrote a letter to the Conservator of Forests that the lease of the defendant-appellant would expire on the 18th of March, 1950 and in view of the recommendation of the Regional Food Controller, he was of opinion that the leases of all the three existing mills in Binding that of Zahoor Ahmad, the appellant, be renewed on payment of Rs. 1,000/- each for the period ending July 15, 1950. The Government agreed to grant the leases to the proprietors of the existing rice mills including the defendant for the year ending the 10th of July, 1950 on a rental of Rs. 1,000/-per annum each. Thus the lease that was originally started on the 1st of March, 1947 continued up till the 15th of July, 1950. For the first two years the rent was Rs. 100/-, per annum while for the third year which was extended unto the 15th of July, 1950 it was agreed to at Rs. 1,000/-. The present suit relates to the period after the 15th of July, 1950.

Finding of the Court:

The court held that the defendant was granted a lease from the 1st of March, 1947 at an annual rental of Rs. 100/-. The lease was renewed the next year also but from the 19th of March. After the termination of the lease for the year 1948-49 in March 1949, the defendant continued to be in possession of the land and he agreed to abide by the terms to be fixed by the Government and under those terms he was required to pay Rs. 1,000/- as rent for the occupation of the land till the 15th of July, 1950. Thereafter also he continued to be in occupation with the consent of the Government but this time the defendant does not seem to have given any undertaking that he would be prepared to pay whatever rent the Government might think it fit to charge from him. The Government was anxious to charge as much as it could. A telegram was sent to him demanding a sum of Rs. 5,251/- but this matter does not seem to have been pursued. Ultimately it demanded Rs. 3,000/- for the renewal of the lease but in case the defendant did not agree, it asked the defendant only to pay Rs. 1,800/- but vacate the premises after the expiry of six months. To this also the defendant does not seem to have agreed but the occupation of the land continued with the consent of the Government. The court also held that the defendant was throughout agreeable to pay any reasonable amount as rent. Rs. 3,000/- a year, therefore, cannot be said to be the amount to which the defendant might have been a consenting party.

Issues: 1. Whether the defendant was a tenant by holding over after the termination of the lease on the 15th of July, 1950? 2. Whether the plaintiff was entitled to a decree for Rs. 11,000/- for the years 1950-51, 1951-52 and 1952-53? 3. Whether the plaintiff was entitled to any special costs?

Ratio Decidendi: 1. Section 116 of the Transfer of Property Act, 1882 provides that if a lessee remains in possession of the leased property after the determination of the lease granted to the lessee, and the lessor accepts rent from the lessee or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Sec. 106. 2. In this case, the lessee, the defendant, remained in possession of the leased property after the determination of the lease on the 15th of July, 1950. The lessor, the Government of U.P. did not accept rent from him but from the conduct of the former, it must be deemed otherwise to have assented to his continuing in possession in the circumstances there being no agreement to the contrary, the lease being for industrial purposes must be deemed to have been renewed from year to year as specified in Sec. 116 of the Transfer of Property Act. There was thus a renewal of the lease from the 16th of July, 1950 and one of the terms of the lease was that it was a lease from year to year and in terms of Sec. 106 of the Transfer of Property Act, it was a lease terminable by six months' notice expiring with the end of a year of the tenancy. 3. The renewed lease would be on the same terms 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 appeal is, accordingly, allowed only to this extent that in place of a decree for a sum of Rs. 11,000/- with costs and a sum of Rs. 1,000/- as special costs in favour of respondent No. 1 against the appellant, it shall be substituted by a decree for a sum of Rs. 3,000/- only with proportionate costs. The appellant shall be allowed costs against the respondent in the trial Court as also in this Court proportionate to his success. Respondent No. 1 shall also be allowed costs against the appellant in this Court proportionate to the failure of the appeal.