* IN THE HIGH COURT OF DELHI
+ RFA No.341/2007
INMACS LTD. ..... Appellant
Through: Mr. Vijay K.Jain, Advocate
versus
PREMA SINHA & ORS. ..... Respondents
Through: Mr. Sachin Datta, Advocate
RESERVED ON:
18.09.2008
DATE OF DECISION:
% 26.9.2008
CORAM:
Hon'ble Mr.Justice Pradeep Nandrajog
Hon'ble Mr.Justice J.R.Midha
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
: PRADEEP NANDRAJOG, J.
1. Vide a registered deed of lease dated 8.11.2001,
Ex.PW-1/4, flat No.503, 43 Nehru Place, New Delhi in the
building popularly known as Chiranjiv Tower was let out to the
appellant by late Mr.K.K.Sinha and his wife Smt. Prema Sinha.
On death of Mr.K.K.Sinha his children i.e. a daughter and two
sons, along with their mother stepped into his shoes. The
tenancy was for a period of 3 years with a covenant [clause III
RFA No.341/2007 page No.1 of 27
(1)] that if the lessee is desirous of having the lease renewed
for a further term of 3 years, the lessee shall give at least 3
months’ notice in writing before the expiration of the term of
the lease intimating his intention to have the lease extended
but the same would be at the increased rent by 10% of the
existing rent which was fixed at Rs.14,476/-.
2. The lease being for a period of 3 years came to an
end on 7.11.2004. Admittedly, no notice in writing as per the
requirement of clause III (1) was given by the appellant in
writing and admittedly no fresh lease deed was executed
between the parties, much less registered. But, the appellant
continued to tender Rs.14,476/- per month even after
7.11.2004 and the lessors continued to accept the same. 5
letters under which the last agreed rent i.e. Rs.14,476/- was
tendered are Ex.PW-1/D-1 to Ex.PW-1/D-5 written in the month
of January, February, March, April and May 2006. It is also the
admitted position between the parties that even for the prior
months the last paid rent was tendered in sum of Rs.14,476/-
and accepted by the lessors.
3. On 27.9.2005, vide Ex.PW-1/9, a legal notice was
issued by the lessors to the appellant stating as under:-
“Under the instructions from and on behalf of my
clientess Smt. Prema Sinha, W/o Shri K.K.Sinha,
R/o N-91, Greater Kailash, Part-I, New Delhi-RFA No.341/2007 page No.2 of 27
110048, I hereby serve you with the following
notice:-That vide Lease Deed dated 08.11.2001, my
clientess let out the premises as described below,
for an initial period of three years which expired
on 7th November 2004.That as per the terms of the lease deed dated
08.11.2001 you failed to give three month’s
notice of your intention to renew the lease deed
for further period of three years with the increase
in the rent @ 10%; but you continued to pay the
use and occupation charges @ Rs.14476/- per
month, hence you have become an unauthorized
occupant and liable to pay damages at the
prevalent market rent i.e. @ Rs.50,000/- per
month.Further you are also advised to clear all other
dues, if any to Municipal Authorities and for
maintenance to M/s Star Estates Management
Pvt. Ltd. and restore the demised premises to
their original condition as per the lease
agreement.By virtue of this notice I hereby call upon you to
deliver the vacant possession of the premises
described below to my clientess within one
month from the date of receipt of this notice and
also pay the damages @ Rs.50,000/- per month
from 08.11.2004 till you hand over the vacant
and peaceful possession of the premises in
question to my clientess.In case you fail to comply with this notice, my
client shall be constrained to initiate legal
proceedings against you in the court of law for
your prosecution in accordance with law at your
cost and risks that too without any further
reference;DESCRIPTION OF PROPERTY:
FLAT NO.503, FIFTH FLOOR,
CONTAINING ONE HALL & TOILETRFA No.341/2007 page No.3 of 27
MEASURING 517 SQ. FT.
CHIRANJIV TOWER,
43, NEHRU PLACE,
NEW DELHI.A copy of this notice is being retained in records
for necessary steps, in case of non-compliance
with this legal notice.”4. Another legal notice dated 29.3.2006, Ex.PW-1/16,
was issued by the lessors to the appellant which reads as
under:-
“Dear Sir,
Under the instructions from and on behalf of my
client’s viz (1) Smt. Prema Sinha, W/o Lat Sh.
K.K.Sinha, and (2) P.Pallav Sinha S/o Late Shri
K.K.Sinha, & (3) Padmanabh Sinha S/o Lat Sh.
K.K.Sinha, all residents of N-91, Greater Kailash-I,
New Delhi-110048 and (4) Neelanjana Singh W/o
Dr. Dinesh Singh and D/o Late Sh.K.K.Sinha, R/o
33, Deshbandhu Apartments, Kalkaji, New Delhi, I
hereby serve your with the following notice:-That vide registered Lease Deed dated
08.11.2001 property Flat No.503, Fifth Floor,
Chiranjiv Tower, 43, Nehru Place, New Delhi was
let out for an initial period of three years, by its
joint owners Mr. K.K.Sinha and his wife Smt.
Prema Sinha which expired on 07.11.2004.That after the death of Mr.K.K.Sinha, his legal
heirs namely his wife smt. Prema Sinha and his
sons viz. P.Pallav Sinha and Padmanabh Sinha
and his daughter Neelanjana Singh were attorn
by you (Lessee) sharing the rent of the abovesaid
property of Late Shri K.K.Sinha’s share in equal
proportion.That as per the terms of the lease deed dated
08.11.2001 you failed to give three month’sRFA No.341/2007 page No.4 of 27
notice of your intention to renew the lease deed
for further period of three years with the increase
in the rent @ 10%; but you continued to pay the
use and occupation charges @ Rs.14476/- per
month, hence you have become an unauthorized
occupant and liable to pay damages at the
prevalent market rent i.e. @ Rs.50,000/- per
month.Further you are also advised to clear all other
dues, if any to Municipal Authorities and for
maintenance to M/s Star Estates Management
Pvt. Ltd. and restore the demised premises to
their original condition as per the lease
agreement.That earlier also a Legal Notice dated 27.09.2005
was sent to you, but you abundant caution this
legal notice is again addressed to you.By virtue of this notice I hereby call upon you to
deliver the vacant possession of the premises
described below to my clientess within one
month from the date of receipt of this notice and
also pay the damages @ Rs.50,000/- per month
from 08.11.2004 till you hand over the vacant
and peaceful possession of the premises in
question to my clientess.In case you fail to comply with this notice, my
client shall be constrained to initiate legal
proceedings against you in the court of law for
your prosecution in accordance with law at your
cost and risks that too without any further
reference;DESCRIPTION OF PROPERTY:
FLAT NO.503, FIFTH FLOOR,
CONTAINING ONE HALL & TOILET
MEASURING 517 SQ. FT.
CHIRANJIV TOWER,
43, NEHRU PLACE,
NEW DELHI.
A copy of this notice is being retained in records
for necessary steps, in case of non-complianceRFA No.341/2007 page No.5 of 27
with this legal notice.”
5. On 30.5.2006, the lessors filed a suit seeking
ejectment of the appellant and mesne profits @ Rs.50,000/-
per month with effect from 8.11.2004. It was asserted in the
plaint that the tenancy expired by efflux of time on the mid-
night of 7.11.2004 and hence the possession of the appellant
in respect of the tenanted premises became unauthorized from
8.11.2004. Reference was made, in para 8 of the plaint, to
Ex.PW-1/9 and Ex.PW-1/16.
6. In the written statement, appellant stated that after
the expiry of the lease period, it approached the lessors and
requested that the appellant may be permitted to continue to
occupy the tenanted premises as a monthly tenant at the old
rate of rent which was agreed to by the lessors since the actual
rent had come down. It was pleaded that the appellant
became a tenant from month to month as per the said oral
agreement. Receipt of Ex.PW-1/9 and Ex.PW-1/16 was denied.
Qua the said documents an alternative plea was taken that
even otherwise the 2 notices are not valid as they do not
determine the tenancy.
7. The plea of the appellant pertaining to the oral
monthly tenancy is as pleaded in para 6 of the written
statement, relevant portion whereof reads as under:-
RFA No.341/2007 page No.6 of 27
“6. ….. It is submitted that after the expiry of the
lease period, the defendant approached the plaintiff
and requested that the possession of the premises in
dispute under the tenancy of the defendant may be
taken as period of lease expired. At that time the rent
in the locality had gone down and the premises in
dispute could not have fetched the rent on which it
was let out to the defendant. The plaintiff asked the
defendant to continue as a monthly tenant in the
premises in dispute at the old rent, therefore monthly
tenancy was arrived at between the plaintiff and the
defendant and on the request of the plaintiff, the
defendant continued to be a monthly tenant after the
expiry of 8.11.2004 as per the understanding and
contract between the plaintiff and the defendant after
8.11.2004.”
8. Needless to state on the rival versions of the parties
the only issue which arose for determination was whether the
tenancy of the appellant stood determined and if so, its effect.
It would be relevant to note that the relationship of the
landlord and tenant was not in dispute and it was also not in
dispute that when let out, the agreed rent was Rs.14,476/- per
month and hence the provisions of the Delhi Rent Control Act
1958 did not apply to the premises let out.
9. Holding that under the registered lease deed Ex.PW-
1/4 the tenancy expired on the mid-night of 7.11.2004 and
since the appellant did not prove having intimated by serving a
notice in writing to the lessors that it would like to continue
with the tenancy for a period of another 3 years and admittedly
no fresh rent deed was executed, much less registered, it has
RFA No.341/2007 page No.7 of 27
been held that the status of the appellant after 8.11.2004 was
that of an unauthorized occupant. It has been held that the
defence that Ex.PW-1/9 and Ex.PW-1/16 were not served upon
the appellant was false for the reason Ex.PW-1/10 and Ex.PW-
1/11 evidence that the notice Ex.PW-1/9 was sent by Regd.
A.D.Post at the tenanted premises and also at the registered
office of the appellant at Darya Ganj. The A.D.Cards, Ex.PW-
1/14 and Ex.PW-1/15 establish the receipt thereof by the
appellant. Similarly, it has been held that the notice dated
29.3.2006, Ex.PW-1/16 was sent to the appellant at its
registered office as also at the tenanted premises under postal
receipts Ex.PW-1/17 and Ex.PW-1/18 and that the A.D.Cards
Ex.PW-1/21 and Ex.PW-1/22 evidence receipt thereof by the
appellant at both addresses. So holding, a decree for
ejectment has been passed against the appellant directing that
possession of the tenanted flat be handed over to the lessors.
Holding that the lessors are entitled to mesne profits after
8.11.2004, but noting that no evidence was led by the lessors
of rents increasing in the locality the agreed rent i.e.
Rs.14,476/- per month has been awarded as mesne profits.
10. At the hearing held on 18.9.2008, Sh.Vijay K.Jain,
learned counsel for the appellant urged that Ex.PW-1/D-1 to
Ex.PW-1/D-5 show that the appellant tendered Rs.14,476/- per
RFA No.341/2007 page No.8 of 27
month as rent and each month the same was accepted as rent.
Thus, counsel urged that the plea of the appellant of being a
tenant from month to month stands established from said
document. Counsel further urged that the recital to Ex.PW-1/4,
the lease deed dated 8.11.2001, uses the expression that the
lease is ‘for the initial term of three years’. It was urged that
this shows that the lease was intended to be continued. Lastly,
counsel urged that Ex.PW-1/9 and Ex.PW-1/16 do not validly
terminate the tenancy as it has not been so stated in the said
documents. We may note that learned counsel for the
appellant did not dispute that his client had received Ex.PW-1/9
and Ex.PW-1/16.
11. From the narration of facts aforenoted it is apparent
that the facts are not in dispute and the questions being, one
which arise very often – rather are raised very often – whether
the status of the appellant was that of a tenant holding over
from month to month.
12. Section 105 of the Transfer of Property Act, 1882
defines a lease of an immovable property as a transfer of a
right to enjoy immovable property for a certain time, or in
perpetuity, in consideration of a price paid or promised, or of
money, a share of crops, service or any other thing of value,
to be rendered periodically or on specified occasions to the
RFA No.341/2007 page No.9 of 27
transferor by the transferee who accepts the transfer on such
terms. The transferor is called the lessor and the transferee is
called the lessee. The price is called the premium and the
money, share, service or other thing to be so rendered is called
the rent.
13. Section 106 of the Transfer of Property Act 1882
deals with the duration of leases and states that in the
absence of a contract, or local law or usage to the contrary, a
lease of immovable property for agricultural or manufacturing
purposes shall be deemed to be a lease from year to year,
terminable on the part of either lessor or lessee, by six month’s
notice and a lease of immovable property for any other
purpose shall be deemed to be lease from month to month,
terminable, on the part of either lessor or lessee by 15 days’
notice. Section 107 of the Transfer of Property Act, 1882
stipulates that a lease of immovable property from year to
year, or for any term exceeding 1 year can be made only by
and under a registered instrument. Law is clear. If a lease is
evidence by a contract, as in the instant case, the duration of
the lease would be as per the contract and at the expiry of the
lease period as per contract the lease expires by efflux of time.
Expiry of lease by efflux of time results in the determination of
the relationship between the lessor and the lessee and since
RFA No.341/2007 page No.10 of 27
the lease expires under the contract by efflux of time, no
notice of determination of the lease is required.
14. Once a lease expires, the mandate of clause q of
Section 108 of the Transfer of Property Act 1882 makes it the
bounden duty of the lessee to put the lessor into possession of
the leased premises.
15. To the extent aforenoted there is no problem in law,
but as in the present case, more often than not, rent is
tendered post expiry of the lease period by efflux of time and
accepted by the landlord. What happens?
16. Section 116 of the Transfer of Property Act 1882
reads as under:-
“116. Effect of holding over-If a lessee or
under-lessee of property remains in possession
thereof after the determination of the lease granted
to the lessee, and the lessor or his legal
representative accepts rent from the lessee or under-
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 section 106.”
17. On the strength of having paid the last agreed rent
the tenant is naturally expected to claim that his status is that
of a tenant holding over and till tenancy is determined by a
notice under Section 106 of the Transfer of Property Act 1882
the status continues.
RFA No.341/2007 page No.11 of 27
18. As noted above, mandate of clause q of Section 108
of the Transfer of Property Act 1882 is that on the expiry of the
lease the lessee is bound to hand over possession of the
leased premises to the lessor and therefore the lessor would
be entitled to maintain an action to compel the lessees to
abide by the mandate of clause q of Section 108 of the
Transfer of Property Act 1882.
19. A person who enters upon the property of another
without authority of law is a trespasser. It could be argued
that the very next moment after the period of lease stands
expired the act of entering upon property by the tenant is an
act of trespass. But law says no. A lessee who continues in
possession after expiry of the lease, without the consent of the
lessor or without any agreement between the parties or in
disagreement with the lessor, is treated in law as a tenant by
sufferance. But where the lessor consents to the continued
possession of lessee on the same terms and conditions as per
the original lease a tenancy by holding over comes into
operation.
20. The words “accepts rent or otherwise assents to his
continuing in possession” in Section 116 of the Transfer of
Property Act contemplates that from the side of the lessee
RFA No.341/2007 page No.12 of 27
there should be an offer to take a new lease and on the side of
the lessor there must be a definite consent to the continuation
of possession. In other words there must be a bilateral
contract.
21. Such a bilateral contract could be express or
implied. Thus mere continuance of possession after the expiry
or determination of the lease is not enough to entitle the
tenant to establish tenancy by holding over.
22. More often than not, the only evidence which
surfaces is the tender of rent and its acceptance by the
landlord. As observed in the decision reported as AIR 1951 SC
285, Eastern Investment Ltd. Vs. Commissioner of Income Tax
the acceptance of rent is only one form of the assent of the
lessor to the lessee remaining in possession of the property.
But, as observed in the decision reported as AIR 1949 FC 124,
Kai Khushroo Bezonjee Capadia Vs. Bai Jerbai Hirjibhoy Warden
& Anr., the acceptance must be of rent as such.
23. Since law requires a bilateral agreement between
the parties for the tenant continuing to holding over, offer and
acceptance of rent is at best an evidence raising a
presumption of assent but would not amount to a conclusive
proof of such assent. It could be rebutted by other evidence.
RFA No.341/2007 page No.13 of 27
24. In order that the acceptance of rent may amount to
assent of the lessor it has to be shown that the offer of rent
was made on the express ground that the lessee intended to
continue the lease and that the acceptance was with the full
knowledge of the nature of the offer. This is a question of fact
which has to be determined from the circumstances of each
case. Greater is the period of continued possession coupled
with receipt of rent, stronger would be the presumption in
favour of the lessee.
25. Where a tenant fails to establish a case of holding
over, his status would be, as noted above, that of a tenant at
sufferance. The difference in the status of a tenant holding
over and a tenant at sufferance was explained by the Supreme
Court in the decision reported as AIR 1996 SC 140, R.V. Bhupal
Prasad Vs. State of A.P. wherein their Lordships said:-
“8. Tenant at sufferance is one who comes into
possession of land by lawful title, but who holds it
by wrong after the termination of the term or
expiry of the lease by efflux of time. The tenant at
sufferance is, therefore, one who wrongfully
continues in possession after the extinction of a
lawful title. There is little difference between him
and a trespasser. In Mulla’s Transfer of Property
Act (7th Edn.) at page 633, the position of tenancy
at sufferance has been stated thus: A tenancy at
sufferance is merely a fiction to avoid continuance
in possession operating as a trespass. It has been
described as the least and lowest interest which
can subsist in reality. It, therefore, cannot beRFA No.341/2007 page No.14 of 27
created by contract and arises only by implication
of law when a person who has been in possession
under a lawful title continues in possession after
that title has been determined, without the consent
of the person entitled. A tenancy at sufferance
does not create the relationship of landlord and
tenant. At page 769, it is stated regarding the right
of a tenant holding over thus: The act of holding
over after the expiration of the term does not
necessarily create a tenancy of any kind. If the
lessee remaining in possession after the
determination of the term, the common law rule is
that he is a tenant on sufferance. The expression
“holding over” is used in the sense of retaining
possession. A distinction should be drawn between
a tenant continuing in possession after the
determination of the lease, without the consent of
the landlord and a tenant doing so with the land-
lord’s consent. The former is called a tenant by
sufferance in the language of English law and the
latter class of tenants is called a tenant holding
over or a tenant at will. The lessee holding over
with the consent of the lessor is in a better position
than a mere tenant at will. The tenancy on
sufferance is converted into a tenancy at will by the
assent of the landlord, but the relationship of the
landlord and tenant is not established until the rent
was paid and accepted. The assent of the landlord
to the continuance of the tenancy after the
determination of the tenancy would create a new
tenancy. The possession of a tenant who has
ceased to be a tenant is protected by law.
Although he may not have a right to continue in
possession after the termination of the tenancy, his
possession is juridical.
13. In view of the settled possession of law, the
possession of the appellant is as tenant at
sufferance and is liable to ejectment in due course
of law. But his possession is not legal nor lawful.
In other words, his possession of the theatre is
unlawful or litiguous possession. The appellant
may remain in possession until he is ejected in due
course in execution of the decree in the suit filed
by the respondent. His possession cannot beRFA No.341/2007 page No.15 of 27
considered to be settled possession. He is akin to a
trespasser, though initially he had lawful entry.”
26. Dealing with the issue whether accepting rent after
serving upon the tenant a notice to quote amounts to a waiver
under Section 113 of the Transfer of Property Act, in the
decision reported as 2006 (4) SCC 205, Sarup Singh Gupta Vs.
S. Jagdish, their Lordships of Supreme Court held:-
“6 … A mere perusal of Section 113 leaves no
room for doubt that in a given case, a notice given
under Section 111, Clause (h), may be treated as
having been waived, but the necessary condition is
that there must be some act on the part of the person
giving the notice evincing an intention to treat the
lease as subsisting. Of course, the express or implied
consent of the person to whom such notice is given
must also be established. The question as to whether
the person giving the notice has by his act shown an
intention to treat the lease as subsisting is essentially
a question of fact. In reaching a conclusion on this
aspect of the matter, the Court must consider all
relevant facts and circumstances, and the mere fact
that rent has been tendered and accepted, cannot be
determinative.
7 A somewhat similar situation arose in the case
reported in Shanti Prasad Devi vs Shankar Mahto
2005 (5) SCC 543. That was a case where the
landlord accepted rent even on expiry of the period of
lease. A submission was urged on behalf of the
tenant in that case that Section 116, Transfer of
Property Act was attracted and there was a deemed
renewal, of the lease. Negativing the contention, this
Court observed that mere acceptance of rent for the
subsequent months in which the lessee continued to
occupy the premise even, after the expiry of the
period of the lease, cannot be said to be a conduct
signifying his assent to the continuing of the lease
even after the expiry of the lease period. TheirRFA No.341/2007 page No.16 of 27
Lordships noticed the conditions incorporated in the
agreement itself, which provided for renewal of the
lease and held that those conditions having not been
fulfilled, the mere acceptance of rent after expiry of
period of lease did not signify assent to the
continuance of the lease.
8 In the instant case, as we have noticed earlier,
two notices to quit were given on 10th February, 1979
and 17th March, 1979. The suit was filed on 2-6-1979.
The tenant offered and the landlord accepted the rent
for the months of April, May and thereafter. The
question is whether this by itself constitute an act on
the part of the landlord showing an intention to treat
the lease as subsisting. In our view, mere acceptance
of rent did not by itself constituted an act of the
nature envisaged by Section 113, Transfer of Property
Act showing an intention to treat the lease as
subsisting. The fact remains that even after
accepting the rent tendered, the landlord did file a
suit for eviction, and even while prosecuting the suit
accepted rent which was being paid to him by the
tenant. It cannot, therefore, be said that by
accepting rent, he intended to waive the notice to
quit and to treat the lease as subsisting. We cannot
ignore the fact that in any event, even if rent was
neither tendered nor accepted, the landlord in the
event of success would be entitled to the payment of
the arrears of rent. To avoid any controversy, in the
event of termination of lease the practice followed by
courts is to permit the landlord to receive each month
by way of compensation for the use and occupation
of the premises, an amount equal to the monthly rent
payable by the tenant. It cannot, therefore, be said
that mere acceptance of rent amounts to waiver of
notice to quit unless there be any other evidence to
prove or establish that the landlord so intended. In
the instant case, we find no other fact or
circumstance to support the plea of waiver. On the
contrary the filing of and prosecution of the eviction
proceeding by the landlord suggests otherwise.”
27. In the report published as 2006 (1) SCC 228, C.
Albert Morris vs K. Chandrasekaran it was observed as under:-
RFA No.341/2007 page No.17 of 27
“26 … Much argument was advanced on the
receipt of the rent by the landlord after the
cancellation of the lease. The consensus of judicial
opinion in this country is that a mere continuance in
occupation of the demised premises after the expiry
of the lease, notwithstanding the receipt of an
amount by the quondam landlord would not create a
tenancy so as to confer on the erstwhile tenant the
status of tenant or a right to be in possession. …
32 … We are, therefore, of the opinion that
mere acceptance of rent by the landlord, the first
respondent herein, from the tenant in possession
after the lease has been determined either by efflux
of time or by notice to quit would not create a
tenancy so as to confer on the erstwhile tenant the
status of a tenant or a right to be in possession. We
answer this issue accordingly.”
28. Similar view has been expressed in the decisions
reported as 2005 (5) SCC 543 Shanti Prasad Devi Vs. Shankar
Mahto, 129 (2006) DLT 338 Central Bank of India Vs. Lalit
Kumar Bhargava, 118 (2005) DLT 52 Yashbir Sharma Vs. Mrs.
Sulakshna Lal, 104 (2003) DLT 158 Delhi Jal Board Vs.
Surendra P.Malik, 2002 (5) AD (Delhi) 7 FCI Vs. Kuljinder Pal
Singh Dhillon and 99 (2002) DLT 139 Sh.Prithvi Raj Bhalla Vs.
Industrial Cables (India) Ltd.
29. It would be interesting to note that in the decision
reported as (1973) 2 SCC 388, Bari Lal vs. Municipal
Corporation of Indore the tenant continued in possession for
nearly 5 years after expiry of the lease and yet was held to be
not holding over. Status held was of a tenant by sufferance.
RFA No.341/2007 page No.18 of 27
Meaning thereby that mere time duration of occupation post
tenancy coming to an end by efflux of time is not a very
determinative factor.
30. Since the respondents have neither filed a cross
appeal nor have they filed cross objections and since the so-
called mesne profits have been awarded at the agreed rent,
the issue whether the possession of the appellant became
unauthorized with effect from 8.11.2004 when tenancy came
to an end by efflux of time on the mid-night of 7.11.2004 need
not bother us if we find that the tenancy was validly
determined under either the notice dated 27.9.2005, Ex.PW-
1/9 or the notice dated 29.3.2006, Ex.PW-1/16.
31. But before that we may deal with the submissions
urged by learned counsel for the appellant as noted in para 10
above.
32. We fail to understand the argument that the recital
in the lease deed dated 8.11.2001 uses the expression that the
lease is ‘for the initial term of three years’ and hence on the
expiry of the lease period the appellant was entitled to
continue to occupy the tenanted premises as a tenant. It has
to be noted that vide clause III (1) of the lease deed Ex.PW-1/4
parties had agreed that at the option of the appellant it could
RFA No.341/2007 page No.19 of 27
continue to occupy the tenanted premises for a period of
further three years but on the condition that the appellant
evidenced such intention by serving a notice in writing upon
the lessor at least 3 months before the expiry of the term of
the lease. Learned counsel for the appellant could not identify
any such notice ever being served. The reference in the recital
that the tenancy was initially for a period of 3 years is clearly
relatable to clause III (1) of the lease deed which envisaged a
further lease for a period of 3 years but subject to the
conditions enumerated in said clause being satisfied.
33. Even otherwise said submission is not available to
the appellant inasmuch as, as noted in para 7 above, the case
pleaded by the appellant in the written statement was that
post 8.11.2004, by and under an oral agreement, the appellant
was allowed to continue to occupy the tenanted premises as a
tenant from month to month.
34. The submission of the learned counsel for the
appellant with respect to rent being tendered vide Ex.PW-1/D-1
to Ex.PW-1/D-5 for the months of January 2006 till the month of
May 2006 and its acceptance by the lessors would have a
meaning if there was evidence to show that the lessors
accepted the money offered as rent.
RFA No.341/2007 page No.20 of 27
35. Be that as it may, we need not go into this issue for
the reason we find that vide Ex.PW-1/9 as also vide Ex.PW-1/16
the tenancy was validly determined. Assuming that having
received the rent post service of Ex.PW-1/9 we note that post
service of the notice Ex.PW-1/16 on 29.3.2006 the suit for
ejectment was filed soon thereafter on 30.5.2006. Thus, the
lessors would succeed if Ex.PW-1/16 is held to be a valid notice
determining the tenancy.
36. We have noted hereinabove in para 4 the contents
of Ex.PW-1/16. After referring to the fact that the appellant did
not exercise the option to have the lease extended and no
fresh lease deed being executed between the parties the
appellant has been clearly called upon to deliver the vacant
possession of the tenanted premises within 1 month from the
date of the receipt of the notice.
37. Section 106 of the Transfer of Property Act 1882 as
originally enacted required the determination of the tenancy
with reference to the tenancy month by giving a notice of a
time duration specified in sub-Section 1 thereof depending
upon the purpose of the lease. Pertaining to a lease other than
for agricultural and manufacturing purposes the notice
determining the lease had to be served at least 15 days prior
RFA No.341/2007 page No.21 of 27
to the expiry of the tenancy month and had to state the
tenancy month. The language of Section 106 as originally
enacted was a source of fertile litigation and the legislature
amended said Section vide Act No.3 of 2003. Vide sub-Section
3 of the Section 106 of the Transfer of Property Act 1882 as
amended, a notice under sub-Section 1 shall not be deemed to
be invalid merely because the period mentioned therein falls
short of the period specified under that sub-Section, where a
suit or proceeding is filed after the expiry of the period
mentioned in that sub-Section.
38. In the instant case, the notice dated 29.3.2006,
Ex.PW-1/16 was received by the appellant as per A.D.Cards
Ex.PW-1/21 and Ex.PW-1/22 around 2nd April 2006 and the suit
in question, as noted above was filed on 30.5.2006.
39. The submission of learned counsel for the appellant
that there is no expressed use of the expression in the notice
that the tenancy stood determined is neither here nor there for
the reason as held in the decisions reported as 1999 (51) DRJ
245 (DB) Capital Boot House Vs. Intercraft Ltd. and 125 (2005)
DLT 161 (DB) Union Bank of India Vs. Sushila Goela & Ors. the
object of a notice is to inform the other party the intention of
the person issuing the notice i.e. that he wants the premises
RFA No.341/2007 page No.22 of 27
back. The object of the notice is to give sufficient time to the
tenant to vacate the tenanted premises. A notice under
Section 106 of the Transfer of Property Act has always been
liberally construed.
40. We may only add that there is no statutorily
prescribed proforma of a notice envisaged by Section 106 of
the Transfer of Property Act 1882. As long as the notice can be
reasonably understood by a person of ordinary prudence that
his tenancy has been determined and he is required to vacate
the tenanted premises at the end of the tenancy month, the
notice is fine.
41. Since we have held that the monthly tenancy
claimed by the appellant stood validly determined vide notice
dated 29.3.2006 Ex.PW-1/16 the obvious conclusion has to be
that the impugned judgment and decree ordering the
ejectment of the appellant is legal and valid.
42. That the learned Trial Judge has held the possession
of the appellant as unlawful with effect from 8.11.2004 is a
non-issue for the reason no consequences have flown from
said finding inasmuch as the so-called mesne profits awarded
by the learned Trial Judge against the appellant and in favour
of the lessors is the agreed rent i.e. Rs.14,476/- per month.
RFA No.341/2007 page No.23 of 27
43. A last residual issue needs to be decided.
44. Since appellant had prayed that pending decision of
the appeal the operation of the impugned judgment and
decree dated 29.1.2007 be stayed, vide order dated 24.1.2008
a condition was imposed that the appellant would pay use
charges @ Rs.28,000/- per month from 7.11.2004 till 31.1.2008
and thereafter with effect from the month of February 2008 @
Rs.40,000/- per month.
45. Vide order dated 7.2.2008 a local commissioner was
appointed to conduct and inquiry and submit a report as to
what would be the fair market rental of the flat. Vide report
dated 26.3.2001 the learned local commissioner has opined
that the flat would fetch a rental of Rs.75,960/- per month.
46. The order dated 24.1.2008 is an interim order and
hence cannot be treated as a final expression of this Court as
to what would be the fair market rental as on date of the order.
But, prima facie the direction in the order that with effect from
7.1.2004 the appellant shall pay use and occupation charges @
Rs.28,000/- per month cannot be sustained for the period
7.11.2004 till 29.1.2007 for the reason vide impugned
judgment and decree dated 29.1.2007 the mesne profits
determined till possession is delivered has been determined at
RFA No.341/2007 page No.24 of 27
Rs.14,476/- per month. It has to be noted that the respondents
i.e. the lessors have not filed any cross appeal or cross
objections challenging the impugned decree in so far it has
determined mesne profits @ Rs.14,476/- per month.
47. At best, a term requiring appellant to pay use
charges in harmony with the current rentals could be imposed
upon the appellant as a condition of stay, post the date of
judgment and decree i.e. 29.1.2007.
48. We note that in the decision reported as (2005) 1
SCC 705 Atmaram Properties (P) Ltd. Vs. Federal Motors (P)
Ltd., ratio whereof was followed in the decisions reported as
2005 (6) SCC 489 Anderson Wright Vs. Amarnath and the
decision reported as 2005 (11) SCC 547 Crompton Grieves Vs.
State of Maharashtra it was held that since the power to grant
a stay is equitable in nature, an applicant seeking stay may, in
equity, be put to suitable terms which would include a
direction that the stay is conditional upon paying a fair market
rental.
49. Determination of fair market rentals in Delhi till the
year 2000 A.D. was not much of a problem because reported
decisions show that with effect from the year 1980 the rentals
rose between 10% to 15% each year depending upon the
RFA No.341/2007 page No.25 of 27
locality in which a property was situated. But, post 2000 A.D.
the market started showing a sign of depression for about 2
years with the rentals falling very steeply till about the year
2005 and thereafter increasing in different proportion in
different localities. The instant case has an intrinsic evidence
of our observation hereinbefore recorded in the present para.
The tenancy at hand came to an end on 7.11.2004 and the suit
was filed on 30.5.2006. The lessors led evidence on 9.10.2006
but could not bring any evidence on record that fair rentals of
similar flats at Nehru Place Commercial Complex had
increased. Thus, there is intrinsic that probably till 9.10.2006
there was hardly any increase in the rentals in the area. The
report of the local commissioner is based on information
available on the website of M/s. Magicbricks.com and M/s.
99acres.com. Not much reliance can be placed on the
information downloaded from the website for the reason the
websites contain an invitation to offer and obviously a lessor
would like to receive the highest rent possible. It is settled law
that evidence of fair market rental has to be cogent and clear
with reference to actual lettings of similar situated properties.
50. We are of the opinion that under the circumstances
it would be advisable to leave the issue open as to what would
be the fair rental value of the flat post 29.1.2007, i.e. the date
RFA No.341/2007 page No.26 of 27
of the impugned judgment and decree for the reason we grant
liberty to the lessors to sue for damages for the period post
date of impugned judgment and decree till possession of the
flat is handed over for the reason said cause of action would in
any case be available to the landlords and they are still
entitled to file a suit for damages for the period beyond
29.1.2007 till date when possession of the flat is handed over.
51. We find no merit in the appeal.
52. The appeal is dismissed with cost against the
appellant and in favour of the respondents.
PRADEEP NANDRAJOG, J.
J.R.MIDHA, J.
September 26, 2008
mm
RFA No.341/2007 page No.27 of 27