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1976 Supreme(Online)(AP) 1

ANDHRA PRADESH HIGH COURT
Ramachandra Rao, J
Metal Press Works Ltd. Calcutta v. Guntur Merchants Cotton Press Co. Ltd
S. A. No. 338/71



Advocates:
For the Appellants/Petitioners: Mr. N. Bapiraju
For the Respondents: Mr. T. Ramachandra Rao

A valid notice to quit under Section 106 of the Transfer of Property Act is mandatory to terminate a tenancy, regardless of original lease terms dispensing with such notice.

Headnote:(A) Transfer of Property Act - Sections 106, 111(h), 113 and 116 - Lease dispute - Original lease required tenant to vacate without notice, but after lease expiry, tenant continued in possession without valid quit notice - Court ruled valid notice is necessary to terminate tenancy even if original lease dispensed with notice - Failed to establish waiver of notice by tenant despite delay in raising objection. (Paras 1-45)

(B) The requirement for valid notice to quit is inherent and cannot be waived unless explicitly agreed by both parties, regardless of the terms in original lease for notice. (Paras 27-30)

Facts of the case:
The lessee initially entered lease of premises including machinery for two years at specified rent, and continued to occupy post-expiration leading to disputes and subsequent legal proceedings over notice to vacate and rent enhancements. (Paras 1-4)

Findings of Court:
Valid quit notice under §106 was found necessary, and invalid notice deemed ineffective; parties must adhere to statutory requirements despite original lease terms. (Paras 2, 4, 9)

Issues: The court evaluated the necessity of notice under §106 amidst the original lease terms and whether tenant waived this right. (Paras 7-8)

Ratio Decidendi: The court clarified valid notice is required to sever tenancy relationship, regardless of original lease stipulations to vacate without notice post-term. (Paras 27-30)

Result: Appeal allowed; tenant not evicted due to invalid notice.

Table of Content
1. lease terms and initial agreements (Para 1)
2. trial court's findings on notice validity (Para 2 , 3 , 4)
3. arguments on notice requirement (Para 5 , 6)
4. questions for appellate review (Para 7 , 8)
5. analysis of tenancy by holding over under s.116 (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 24 , 25 , 26)
6. impact of original lease terms on holding over (Para 27 , 28 , 29 , 30 , 31)
7. legal implications of notice to quit and waiver (Para 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44)
8. final determination and outcome of appeal (Para 45)

1. The defendant - appellant took on lease the suit premises along with machinery, plant etc., belonging to the plaintiff - respondent originally for a period of two years under a registered agreement dated May 27, 1937 with an option to continue as tenant for a further period of two years. The annual rent stipulated was Rs. 1150/- and the lease was for manufacturing and industrial purposes. Another registered lease agreement under Ex. A - 2 dated June 20, 1941 was executed on a rent of Rs. 1,450/- per year for a period of two years commencing from 14-7-1941 with a similar option for the appellant to continue the tenancy. The appellant - lessee exercised the option to continue the tenancy and continued to be in possession of the property after the expiry of the stipulated period. The claim for enhancement of rent on the ground that the lessor provided extra accommodation and further amenities was resisted by the lessee who took the stand that no improvement was made or extra accommodation provided entitling the lessor to any enhancement of rent. Hence, disputes arose between the parties since 1963 resulting in the institution of S. C. Suit No. 340/63 on the file of the Subordinate Judge's Court, Guntur and O. S. No. 119/66 on the file of the District Munsif's Court, Guntur by the lessor for recovery of arrears of rent and other amounts said to be due and payable by the lessee, and O. S. No. 487/66 by the lessee for an injunction restraining the lessor from interfering with his possession. Thereupon, the lessor issued a registered notice Ex. A - 1 dated 1-10-1966 calling upon the appellant - lessee to vacate the premises within 15 days time. No reply to Ex. A - 1 was sent by the lessee. In the circumstances O. S. No. 107/67 on the file of the Additional District Munsif's Court, Guntur for recovery of possession of the suit premises with all the buildings, machinery plant etc. and subsequent rent or damages was instituted on 4-2-1967 by the lessor against the lessee. The original written statement contesting the suit claim on several grounds was filed by the lessee on November 15, 1967. The following issues were settled:
1. Whether the plaintiff is not entitled to possession of lease premises in view of the determination of the lease by the plaintiff - landlord ?
2. To what damages towards use and occupation of the suit property is the plaintiff entitled ?
3. To what relief ?
The plaintiff - company examined its clerk, one Srirama Murthy as P. W. 1 and filed Ex. A - 1, certified copy of registered notice issued by the plaintiff to the defendant, and Ex. A - 2 dated 20-6-1941, registered lease bond in support of its claim. The defendant examined its factory manager, one Bhattacharji as D. W. 1 who speaks to the dilapidated condition of the factory building and filed Ex. B - 1 dated 23-7-1968, inspection order issued by Inspector of Factories, Guntur. He deposes that the
defendant issued a notice to the plaintiff for repairing the factory building and the plaintiff carried out some minor repairs thereafter and that the defendant effected several improvements like latrines, bath rooms and the extension of the main thatched shed with its own funds and it did not agree for any enhancement of rent as pleaded by the plaintiff. He filed Exhibits B - 2 and B - 3 registered notices. After completion of the recording of evidence the suit was posted













































































































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