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Judgment
Baxi, J.—This second appeal arises out of a suit filed by the Respondent in the Court of the Diwani Nyayadish Rajkot State claiming
damages for breach of a condition contained in a rent note under which the Appellants'' father had agreed to allow the Respondent to construct a
staircase in the shop in his possession and to allow her to construct a storey.
The Respondent owns two adjoining shops one of which was in the possession of the Appellants'' father as her tenant since 1941 A.D. The
shops have a common terrace and the Respondent intended to build a storey with a view to letting it out. The parties therefore entered into a fresh
agreement of lease which is contained in a rent note Ex. 6, executed by the Appellants'' father in. favour of the Respondent. The rent note, which is
dated 20-10-1942, purports to create a lease for two years from Kartak Sud 1 St. 1999 (9-11-1942). By Clause 5 of this note the Appellants''
father agreed to allow the Respondent to build a storey on the terrace and to construct a staircase in his shop. The Respondent then called upon
him to give her facilities for constructing the storey and to allow her to put a staircase according to agreement but he raised various objections
against the proposed construction, gave no facilities to her nor did he allow her to put a staircase. The Respondent''s contention was that the
Defendant thereby committed a breach of the condition and claimed damages at the rate of Rs. 75/- per month, which was the rent he expected to
realise by letting the storey. The Defendant died soon after the institution of the suit and the present Appellants were brought on record as his legal
representatives. They filed a written statement by which they denied having executed the rent note and contended that as the rent note created a
lease for two years, it was compulsorily registrable under the Registration law in force in the Rajkot State and was therefore inadmissible in
evidence. They did not admit that there was any agreement under which they were bound to allow the Respondent to construct a staircase; they
further contended that Clause 5 of the rent note was without consideration, uncertain and otherwise legally incapable of enforcement. Lastly they
denied that the Respondent had suffered any damage. They challenged the bona fides of the suit contending that the Respondent''s demand was a
device to increase rent but this part of the Appellants'' defence is not material to the present appeal.
The learned Civil Judge, who disposed of the suit, held that the rent note was admissible in evidence and Clause 5 thereof was a valid and
enforceable clause. He held that the original Defendant committed a breach of the condition contained in this clause, that the Respondent had
proved damages and allowed her damages at the rate of Rs. 45/- per month for 16 months commencing from Vaishakh Sud 1 St. 2001 (12-5-
1945) till the date of the suit. The Appellants preferred an appeal against his decree to the Court of the District Judge, Central Saurashtra Division,
while the Respondent filed cross objections. The appeal and the cross objections were transferred for disposal to the Court of the Assistant Judge,
Gondal Division, who dismissed them both. The Appellants have preferred this second appeal against the appellate decree of the Assistant Judge
while the Respondent has filed cross objections.
Mr. M.U. Shah, who appeared on behalf of the Appellants urged that there was no evidence that the Respondent suffered any damage and
consequently no damages should have been awarded to her. When however, the Respondent''s learned Advocate Mr. G.B. Joshi pointed out
from record evidence of witnesses to prove the damage, he conceded that there was evidence of damage but contended that the witnesses were
not reliable. This contention must be overruled. The question whether the Respondent suffered damage or not by reason of the breach of Clause 5
of the rent note is a question of fact and the decision of the Courts below on it is binding on the High Court in second appeal and the Appellants
cannot be allowed to re-open the question on the ground that the evidence on which that finding is based is unreliable.
It was further contended on behalf of the Appellants that the Courts below adopted a wrong measure in assessing damages. According to Mr.
Shah the proper measure was the difference between the standard rent of the whole building including the storey after it was constructed and the
standard rent of the shops below and if this standard is adopted, it will be found that the Respondent did not suffer any damage. This contention
was not advanced in the Courts below nor even in the memo of appeal to this Court and cannot be allowed to be taken during arguments. But
apart from that the true measure of damages in such cases appears to me to be the actual loss of rent which the Respondent, would have realised
by letting the storey after it was built and as the Courts below have adopted that standard their decision cannot be interfered with.
It was next contended that Clause 5 of the rent note was without consideration and could not be enforced. This argument must be repelled. The
several undertakings which, the Appellants'' father gave by the rent note collectively form one consideration for the Respondent assenting to his
continuing in possession and enjoyment of the shop and every clause of the rent note is, therefore, supported by consideration and no clause can
be singled out and repudiated on the ground that it is without consideration.
The only important question of law up on which the decision in this appeal really turns is the question whether in view of the fact that the rent
note purports to create a lease for two years it can be looked into to ascertain the conditions of the lease created thereby. Mr. G.B. Joshi, the
Respondent''s learned Advocate urged that it was admissible to show, the nature of the original Defendant''s i.e. the Appellants'' father''s
possession and the conditions under which he held such possession and cited the following decisions in support of his contention viz., - Maha
Mangal Rai and Others Vs. Kishun Kandu ); - ''Kartar Singh v. Mt. Mehr Nishan AIR 1934 Lah 885 (B); - Vishvanath Haibatrao Deshpande Vs.
Ranganath Dhondo Deshpande, and - ''Mt. Basi Devi v. Muslim Bank of India AIR 1943 Pesh 70 (D). I do not dispute the proposition that the
unregistered rent note may be used to prove the nature and character of the Appellants'' father''s possession. But none of the decisions supports
the view that an unregistered lease could be used to prove the conditions under which such possession is held. If this is permitted it amounts to
allowing the parties to prove the transaction of the lease itself, viz., the letting of the shop and the terms on which such letting took place, which
would directly contravene the provisions of Section 49, Registration Act. Mr. Joshi, however, argued that Clause 5 of the rent note created a
personal obligation on the Appellants'' father to allow the Respondent to do certain things and imposed a personal liability to pay damages in case
of breach of that obligation. The clause, therefore, did not affect any Immovable property and there was nothing in the Registration Act which
debarred the Court from looking at Clause 5 for determining the question whether he had incurred that liability. This argument does not appeal to
me and must be repelled. Clause 5 is as much an integral part of the rent note as every other clause and cannot be dissociated from any other
clause of the lease and therefore, unless the entire rent note is admitted in evidence, it is not possible to look into this clause alone.
It was next argued, and the Courts below have accepted the argument, that the lease created by the rent note was determined by efflux of time,
viz., on the expiration of two years and after the expiration of that period the Appellant held over and a renewed lease came into existence on the
same terms as those contained in the rent note except as to duration. The new lease which was thus created by implication of law was a lease from
month to month and did not require to be registered and in order to ascertain the conditions of the renewed lease the terms of the rent note could
be looked into. According to this argument though, the rent note was ineffectual as a present demise it could be used for the collateral purpose of
ascertaining the conditions of the new lease which came into existence by holding, over after the expiration of the period reserved by it.
Now the doctrine of holding over is embodied in Section 116, T.P. Act which reads as under:
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.
The first essential condition for the application of this doctrine is that there must be a valid previous lease., which has been determined. This
condition is wanting in this case. The unregistered rent note did not create, a valid lease and it is not permissible to look into it for the purpose of
ascertaining its duration, see - ''Moti Sagar v. Dhanna Mal AIR 1922 Lah 329 (E); ''Mt. Nasiban v. Mohammed Sayed AIR 1936 Nag 174 (F)
and - AIR 1949 263 (Nagpur) . The rent note is, therefore, not admissible to prove that there was any lease for a fixed term which was
determined by efflux of time and no new lease can be regarded as having come into existence after the expiration of the period reserved by it by
the application of the doctrine of holding over. In my opinion the rent note is only useful to the Respondent to show the nature of the Appellants''
continued possession of the shop but it is not'' only ineffectual to prove the conditions of the lease which it actually purports to create but it is
equally ineffectual to prove the conditions under which the Appellants'' father continues in possession after the expiration of the term purported to
be reserved by it. The Respondent is thus prevented from relying on Clause 5 of the rent note in support of her claim for damages.
Mr. Joshi, however, pointed out that the Appellants had admitted in para 2 of the written statement that .the, rent note was for a period of two
years and the term of the rent note regarding its duration having thus been admitted in their pleading it becomes unnecessary for the Respondent to
prove it by the production of the rent note and on this admission alone it must be held that the previous lease was for two years and had been
determined by efflux of time. In my view this is not a correct reading of the Appellants'' written statement. Paragraph 2, which contains the alleged
admission, has to be read with para 1 by which the Appellants do not admit execution of the rent note. Thus no term of the rent note is admitted by
them and para 2 merely contains an alternative plea that the rent note was inadmissible in evidence on the ground of want of registration. If in
answer to a document upon which the Plaintiff relies the Defendant does not admit execution and in the alternative pleads illegality of the document,
it cannot be said that he has admitted the document or its terms. I cannot read in para 2 any admission as to the duration of the lease created by
the rent note and the Respondent''s argument based on the alleged admission cannot be accepted.
It was also argued that the Appellants'' father admitted in his notice that the tenancy was created for two years. This admission is, however, no
more than secondary evidence of the contents of the rent note and cannot be looked into to ascertain its terms.
The learned Advocate for the Respondent cited - Assam Bengal Ry. Co., Ltd. Vs. Hari Mohun Pal and Others, ), which decides that where
the terms of a previous unregistered lease are incorporated in a fresh lease, the unregistered lease can be looked into for the collateral purpose of
ascertaining the terms of the fresh lease. This decision presupposes the creation of a fresh lease but in this case there is no fresh lease which came
into existence by holding over as the Respondent cannot prove a valid previous lease which has been determined by efflux of time. Thus she cannot
prove that the Appellant has been holding over.
There can thus be no holding over by the Appellants and the creation of a new lease by implication of law and consequently the question of
ascertaining the terms of the new lease does not arise. The Courts below therefore erred in admitting the unregistered rent note in evidence on the
ground that the Appellants'' father was holding over and in holding that the Respondent had proved the condition contained in Clause 5, The suit is
based on the alleged breach of this condition and must therefore fail.
In the result the appeal is allowed and the Respondent''s suit is ordered to be dismissed with costs throughout.
The Respondent has filed cross-objections claiming that the Courts below should have awarded damages at the rate of Rs. 75/- per month as
claimed by her in her plaint. The cross-objections also fail and are ordered to be dismissed.