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Judgment
Dr. Vineet Kothari, J.—1. The present first appeal under Section 96 CPC, 1908, has been filed by the appellant/plaintiff, Navratan Singh Rajpurohit, against the respondent/defendant Indian Oil Corporation Ltd., Udaipur, (for brevity, hereinafter referred to as ''IOCL'') being aggrieved by the rejection of his suit for eviction and possession of the suit property, a plot of land, ad-measuring 0.1600 hectare of Aaraji No. 1011 and 1012 in Village Fanda Dakan, Tehsil: Girwa, District: Udaipur, situated near State Highway, on which the defendant-IOCL had set-up a petrol pump.
The plaintiff/appellant purchased the said plot of land in a court auction for Rs. 30,91,000/- on 14.01.2008, which auction of the suit land was held against the judgment debtor and defaulter one Sh. Bhanwarlal, against whom decree in Civil Suit No. 35/2005-(Kanhaiyalal Vs. Bhanwarlal) was passed by the learned A.D.J. No. 2, Udaipur. In the Execution proceedings in Case No. 2/2007, the said court auction was held by the concerned executing court. After the purchase of the said plot of land, the appellant/plaintiff has filed the present Suit No. 143/2011 (631/2008) Navratan Singh Rajpurohit Vs. IOCL, which came to be partly decreed by learned trial court of A.D.J. (FT) No. 3, Udaipur only to the extent of payment of monthly lease charges i.e. Rs. 2392/- from 14.01.2008 to him but the eviction was refused by the learned court below. The reasons assigned by the learned court below are quoted herein below for ready reference:-
Being aggrieved by the same, the appellant/plaintiff has filed the present first appeal in this Court on 29.09.2011 and the same was finally heard by this Court today.
Mr. Salil Trivedi and Mr. Sajjan Singh, learned counsel appearing on behalf of appellant/plaintiff vehemently submitted that the learned court below has erred in refusing the eviction decree, since admittedly after the purchase of the said plot of land by the plaintiff in court auction for a sum of Rs. 30,91,000/-, which sale was confirmed in his favour on 14.01.2008, the plaintiff had determined and terminated the lease executed by erstwhile lessor Sh. Bhanwarlal and thereafter the lessor/plaintiff Navratan Singh Rajpurohit was entitled to seek the possession of the suit land. According to Exhibit-6 notice served by the plaintiff, the vacant possession of the suit land was to be handed over to him on or before 28.10.2008. Learned counsel for the appellant also submitted that the appellant/plaintiff was not bound to renew or extend the lease in favour of defendant IOCL in terms of lease executed by the erstwhile owner/lessor Sh. Bhanwarlal, and the said original lease (Exhibit-2A) dated 28.02.1997 for a period of 15 years, had expired in 2011 and, therefore, the lessee IOCL is bound to hand over the vacant possession of the suit land to the plaintiff. The said period of lease from 01.03.1996 expired on 01.03.2011 and the plaintiff was also entitled to the mesne profits for the use and occupation of the suit land from the date of his purchase, whereas the defendant IOCL has failed to pay any such lease charges or arrears thereof to the plaintiff/appellant. They relied upon several judgments in support of their contention, some of which will be discussed hereinafter.
On the other hand, Mr. Om Mehta, learned counsel for the respondent/defendant IOCL vehemently submitted that as per Clause (n) of the Lease-deed (Ex. 2A), the extension or renewal of the period of further fifteen years was automatic, therefore, the present appellant/plaintiff was equally bound by the said terms of the lease-deed upon his purchase of the suit land in court auction against the judgment debtor, Sh. Bhanwarlal, the original lessor since during the execution proceedings in which such court auction took place against said Sh. Bhanwarlal, the factum of IOCL being a lessee in the suit land was very well placed before the learned Executing Court and the appellant/plaintiff had also admitted this fact in the execution proceedings and, therefore, the lease was bound to be renewed for the next period of fifteen years in terms of Clause (n) of the lease-deed and which next period of fifteen years was to expire only in the year 2026, whereas the present suit for eviction was filed by the appellant prematurely in the year 2008 itself and the lease could not have been terminated or determined by the plaintiff in the year 2008 by serving the notice (Exhibit-6). Thus, the refusal of the eviction decree by the learned court below was perfectly justified and the present appeal of the plaintiff/appellant deserves to be dismissed.
Mr. Om Mehta, learned counsel for the respondent/defendant also submitted that the monthly lease charge are being remitted by the defendant IOCL but the plaintiff has deliberately refused to accept such payment of the lease charges as fixed under the lease-deed and as fixed by the learned court below in the impugned judgment and decree and, therefore, the defendant-IOCL, a reputed oil company, cannot be said to have defaulted in the payment of monthly lease charges. He also relied upon various judgments, which will be discussed hereinafter to the extent found relevant.
I have heard the learned counsel for the parties at length and perused the evidence on record and the impugned judgment and decree and the judgments cited at bar.
The crux of the matter lies in the construction of Clause (n) of the lease-deed (Ex.2A) executed on 28.02.1997 between Sh. Bhanwarlal Bhand and IOCL. the said lease-deed was made effective from 01.03.1996 and was to have a life of fifteen years in the first instance with the following Clause (n). The relevant clauses of the lease-deed which are germane to the present controversy, are quoted herein below for ready reference:-
"Clause (a):- If the rent hereby reserved or any part thereof shall be in arrears for a period of three months after becoming payable and after being demanded or if the lessee shall have committed breach of any of the covenants and conditions herein contained and on the part of the lessee to be observed and performed then in that event it shall be lawful for the lessor at any time thereafter to re-enter upon the said premises or any part thereof in the name of the whole and to take action to re-posses and enjoy as in all their former estate and interest provided always and is agreed and declared that the power of re-entry hereinabove contained shall not be exercised unless and until the lessor shall have first given to the lessee three months'' notice in writing pointing out the breach in respect of which the right of re-entry is exercised and the lessee shall have failed to remedy the breach within a reasonable period of not less than three months thereafter.
xxx
Clause (l): Notwithstanding anything herein contained to the contrary the lessee shall be entitled to determine these presents by one months'' previous notice in writing to the lessors and in the event of the Lease being determined as aforesaid these presents shall come to an end and the Lessor shall not be entitled to claim any compensation whatsoever from the Lessee for such earlier determination and the Lessee shall be entitled to remove and take away all the buildings, structures, fixtures, fittings and items as provided herein at the expiration or sooner determination of the term hereby granted or within six months thereof without any objection on the part of the Lessor or any of them or any person or persons claiming by through or under any of him.
xxx
Clause (n):- PROVIDED ALWAYS AND IT IS AGREED AND DECLARED that at the expiration of the said term of 15 years this lease will be automatically and without any further act of the parties hereto be renewed for further term of 15 years from the expiration of last mentioned term unless the lessee give to the lessor one calendar month''s previous notice of their intention not to take any renewed lease. The renewed lease will be for a rental of Rs. 2981/- per month with further increase @ 15% (i.e. Rs. 3428/- per month) at the commencement of sixth year of the renewal period and with a further increase of 15% (i.e. Rs. 3942/- per month) at the commencement of the 11th year of the renewal period and on the same covenants, conditions and agreements including the present covenant for renewal. Further, before 28.03.2016, the lessor will also do all the needful for renewing the original lease dated 29/3/96 which he has entered with Tehsildar, Girwa, Dist. Udaipur.
Provided further...
(a). The Lessor and each of them shall not sell, transfer, assign, mortgage, encumber or otherwise dispose of wholly or in part their right, title and interest in the demised premises or do any act, deed or thing or enter into any agreement for such purpose during the currency of the term of lease hereby granted and any renewal or renewals thereof and for a period of three months thereafter and until the Lessee shall have failed and neglected or declined or refused to exercise the option to purchase the Lessor''s interest in the demised premises and in the reversion thereof pursuant to sub-clause (b) hereinafter contained.
Provided However, that if the Lessor intend to dispose of his right, title and interest in the demised premises and in the said reversion during the currency of the term of the lease or any renewal or renewals thereof the Lessor shall first by a notice in writing given to the Lessee require the Lessee to exercise the option to purchase the same in the manner hereinafter provided and if the Lease shall fail or refuse to exercise the said option within a period of three months from the service of such notice upon them, then only and thereafter the Lessor shall be entitled to dispose of their said right, title and interest to any person at any price, subject nevertheless to the terms and conditions and provisions of this lease and so as not to affect the Lessee right to exercise the option of renewal of the term of the lease pursuant to the covenant for renewal herein before contained.
(b). The Lessee shall have the right and option at any time during the currency of the term of the lease hereby granted or any renewal thereof by a notice in writing to require the Lessor to sell transfer and assign into the Lessee the right, title and interest of the lessor in the demised premises and thereupon the Lessor shall sell transfer and assign the demised premises to the Lessee or its nominee or nominees within three months next after the receipt of such notice at or for the price which shall be computed as follows i.e. to say the price shall comprise firstly of a sum equivalent to such capital money as the Lessor may have paid as consideration for the acquisition of the site as indicated in their books of accounts and records, and secondly a sum equivalent to an amount as the Lessor may have expended in the erection and installation on the site of the said building, superstructures etc. and the same shall be reduced by an amount equivalent to the depreciation at such rates as may have been applicable (whether allowed or not) under the applicable statutes in force during the relative periods.
The costs of the sale, transfer and assignment excluding only professional legal cots incurred by Lessor shall be born by the Lessee and in the event of the Lessors title to the demised premises being found defective, the Lessor shall take all such steps as the Lessee may reasonably require to cure such defects provided however that and if such defects can not be cured, the Lessee shall have a right to rescind the option and contract for sale transfer and assignment without liability to pay any costs and damages. The amounts to be computed under this sub-clause by reference to moneys paid or expended by the Lessor shall be computed upon the basis only of such expenditure as the Lessor can reasonably prove to have been incurred by them by means of documentary evidence. The option and rights granted by this clause to the Lessee for purchase transfer and assignment of the demised premises may be specifically enforced by the Lessee. In the event of the Lessee exercising its option to purchase the demised premises as aforesaid, the Lessor will deduce a good and marketable title thereto free from encumbrances and reasonable doubts and this lease shall determine upon the execution and registration of the sale deed or other conveyance of title to the Lessee. If the Lessee does not exercise their option to purchase the demised premises as aforesaid any sale by the Lessor to a third party shall be made subject to all the terms and provisions to this lease, including such option."
Plaintiff, Navratan Singh Rajpurohit, served a notice (Exhibit-6) dated 26.08.2008 on the defendant, IOCL seeking to terminate the lease and asking the defendant to hand over the vacant possession of the suit land on or before 28.10.2008. The averments to the relevant extract made in the said notice (Exhibit-6) dated 26.08.2008 are also quoted herein below for ready reference:-
The said notice was responded by the defendant, IOCL vide their reply (Exhbiit-10) by one Sh. Bhanu Bhatnagar, Advocate, Udaipur in which it was stated on behalf of IOCL that the plaintiff may contact IOCL for fresh lease-deed to be executed on the same terms as were available with earlier lessor Sh. Bhanwarlal so that monthly lease charges may be paid to him instead of Sh. Bhanwarlal. However, no such fresh lease-deed was ever executed by and between the present plaintiff/appellant and the defendant-IOCL. The relevant extract of the reply is also quoted herein below for ready reference:-
Section 111 of the Transfer of Property Act, 1882, which deals with determination of lease, stipulates that a lease of immovable property may determine (a) by efflux of time limited thereby, (b) where such time is limited conditionally on the happening of some event-by the happening of such event Clause (c) to Clause (g)....(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other.
Section 109 of the Transfer of Property Act which deals with right of the lessors/transferee is also quoted herein below for ready reference:-
"Section 109- Rights of lessor''s transferee.--If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only of such transfer cease to be subject to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat the transferee as the person liable to him:
Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee. The lessor, the transferee and the lessee may determine what proportion of the premium or rent reserved by the lease is payable in respect of the part so transferred, and, in case they disagree, such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased."
This Court is of the opinion that the appellant/plaintiff is entitled to the decree of eviction and possession and the present first appeal of the plaintiff, Navratan Singh Rajpurohit, deserves to be allowed and to this extent the decree under appeal deserves to be set aside. The reasons are as follows.
Firstly, this Court is of the view that Clause (n) of the Lease-Deed (Ex.2A) executed in between erstwhile lessor, Sh. Bhanwarlal and the IOCL, does not bind the present appellant/plaintiff as such. He was not having any privity of contract in the said lease-deed and he (plaintiff) being the auction purchaser held against the original lessor, Sh. Bhanwarlal, who became the judgment debtor in another suit filed against him and on account of non-satisfaction of that decree, to which the present had no connection, the court auction was held of his immovable property and that property was purchased by the plaintiff free from all encumbrances in the said court auction. Mere presence of the lessee, IOCL in the suit land, does not bind the auction purchaser (plaintiff/appellant herein) with the terms of the lease-deed executed by Sh. Bhanwarlal in the capacity of lessor in favour of IOCL. Section 109 of the Transfer of Property Act, therefore, would not apply in the present case, as it is not a case of transfer of property by the lessor but by the court in a court auction, held in execution proceedings against the original lessor, Sh. Bhanwarlal.
Although the present appellant/plaintiff, Navratan Singh Rajpurohit, who became the owner of the suit land upon court auction would become the lessor qua the defendant IOCL, the lessee by the fact of the lessee being in possession and occupation of the suit land, but in absence of a fresh lease-deed executed by him in favour of defendant IOCL, the terms of previous lease-deed of Bhanwarlal cannot be bind him. There is no term in the Ex.6 lease-deed by Sh. Bhanwarlal, binding the transferee (Navratan Singh Rajpurohit) in the court auction, nor is there any court decree to that effect. Merely raising an objection by the defendant IOCL at the time of execution of the decree against previous lessor, Sh. Bhanwarlal, does not make such terms of lease-deed binding upon the appellant/plaintiff even if he admitted the fact of existence of lessee IOCL being in the possession of the suit land.
Hon''ble the Supreme Court in the case of Shanti Prasad Devi & Anr. Vs. Shankar Mahto & Ors. reported in , AIR 2005 SC 2905 held that where the lessor had neither expressly nor impliedly agreed for renewal of lease, the renewal as provided in the original contract was required to be obtained by following a specified procedure i.e. on mutually agreed terms, and the same would not bind such lessor and mere acceptance of rent by the lessor for the period the lessee had over stayed on the leased premises, would not amount to any assent on the part of lessor for continuation of the lease even after expiry of lease period. The said judgment of the Hon''ble Apex Court is on all fours with the facts of the present case. The relevant extract of the judgment from Headnote are quoted herein below for ready reference:-
"The lessor in the instant case, had neither expressly nor impliedly agreed for renewal of lease. The renewal as provided in the original contract was required to be obtained by following a specified procedure i.e. on mutually agreed terms or in the alternative through the mediation of Mukhias and Panchas. The said renewal clause in the contract prescribing a particular period and mode of renewal which was "an agreement to the contrary" within the meaning of S.116. In the face of specific clauses in contract for seeking renewal there could be no implied renewal by "holding over" on mere acceptance of the rent offered by the lessee. Further the option of renewal was exercised by lessee not in accordance with the terms of renewal clause that is before the expiry of lease. It was exercised after expiry of lease and the lessee continued to remain in use and occupation of the leased premises. The rent offered was accepted by the lessor for the period the lessee overstayed on the leased premises. The lessee, in the above circumstances, could not claim that he was "holding over" as a lessee within the meaning of S.116. On expiry of the period of lease, mere acceptance of rent for the subsequent months in which the lessee continued to occupy the leased premises cannot be said to be a conduct signifying "assent" to the continuance of the lessee even after expiry of lease period. The order of ejectment passed against him would not be liable to be interfered with."
In another case, in Vithalbhai Pvt. Ltd. Vs. Union of India reported in , AIR 2005 SC 1891, relied upon by learned counsel for the plaintiff/appellant in the present case also, the Hon''ble Supreme Court held that filing of suit prematurely does not raise a jurisdictional question and even if the plaintiff ought to have waited a little more, before entering portals of the Court, the Court can still grant relief to the plaintiff if no manifest injustice or prejudice is caused to the party proceeded against. This case meets the argument of the learned counsel for the defendant IOCL that even if the lease period in the first instance was to expire in the year 2011, but the present suit was filed by the plaintiff in the year 2008, soon after the purchase of the suit land in the court auction held in the year 2008. The relevant extract of the said judgment is also quoted herein below for ready reference:-
"No amount of waiver or consent can confer jurisdiction on a Court which it inherently lacks or where none exists. The filing of a suit when there is cause of action though premature does not raise a jurisdictional question. The claim may be well merited and the Court does not have jurisdiction to hear the suit and grant the relief prayed for but for the fact that the plaintiff should have waited a little more before entering the portals of the Court. In such a case of the suit being premature on the date of its institution the Court may still grant relief to the plaintiff if no manifest injustice or prejudice is caused to the party proceeded against. Where the right to sue has not matured on the date of the institution of the suit an objection in that regard must be promptly taken by the defendant. The Court may reject the plaint if it does not disclose the cause of action. It may dismiss the suit with liberty to the plaintiff to file a fresh suit on its maturity. The plaintiff may himself withdraw the suit at that stage and such withdrawal would not come in the way of the plaintiff in filing the suit on its maturity. In either case, the plaintiff would not be prejudiced. on the other hand, if the defendant by his inaction amounting to acquiescence or waiver allows the suit to proceed ahead then he cannot be permitted to belatedly urge such a plea as that would cause hardship, may be irreparable prejudice, to the plaintiff because of lapse of time. If the suit proceeds ahead and at a much later stage the Court is called upon to decide the plea as to non-maintainability of the suit on account of its being premature, then the Court shall not necessarily dismiss the suit. However, the Court shall not exercise its discretion in favour of decreeing a premature suit in the following cases: (i) When there is a mandatory bar created by a statute which disables the plaintiff from filing the suit on or before a particular date or the occurrence of a particular event; (ii) When the institution of the suit before the lapse of a particular time or occurrence of a particular event would have the effect of defeating a public policy or public purpose; (iii) if such premature institution renders the presentation itself patently void an the validity is incurable such as when it goes to the root of the Court''s jurisdiction; (iv) Where the lis is not confined to parties alone and affects and involves persons other than those arrayed as parties; (v) Where leave of the Court or some authority is mandatorily required to be obtained before the institution and was not so obtained."
The learned Single Judge of this Court in the case of Yakoob Ali Vs. Arjun Lal reported in 1991 (1) RLW 146 also held that even in case of fixed term lease, such a lease can be terminated by serving a notice by the lessor on the lessee for ejectment and such lease may come to an end even before expiry of period of lease itself. Para 5 of the said judgment is quoted herein below for ready reference:-
"5. If the rent note is taken into consideration, all its terms and conditions have to be considered. According to the contention of the learned counsel for the defendant-appellant, the duration of lease was one year from July 3, 1985 to July 2, 1986 and the suit was filed in March 1986. In view of the provisions of Section 107, Transfer of Property Act its registration was not necessary. It was not for a term exceeding one year or reserving a yearly rent. It also provides that the tenancy may be terminated by oral notice of a week. The provisions of Section 106, Transfer of Property Act are subject to the contract to the contrary. As per the terms of the contract of tenancy in between the parties, defendant''s tenancy could be terminated by oral notice of one week. Admittedly, the plaintiff has served a written notice giving more than 15 days time to him. There is no force in the contention of the learned counsel for the defendant-appellant that the tenancy was for fixed term of one year and could not be terminated during this period by serving a notice. The question of termination of tenancy arises only during its subsistence. After the expiry of the period of lease, the tenancy comes to an end and no notice to determine it is required. Section 111, Transfer of Property At makes this position quite clear. By serving a notice of ejectment, the tenancy of the defendant came to an end and before the expiry of period of lease of one year which is itself disputed by the plaintiff. As such it cannot be said that the suit for ejectment was premature."
In the present case also, the plaintiff (auction purchaser) had terminated the lease vide Notice (Ex.6) dated 26.08.2008 soon after the purchase and that he was entitled to do so, could not be challenged by the defendant IOCL, as the auction purchaser was not bound by the terms of the lease-deed executed by the erstwhile lessor, Sh. Bhanwarlal in favour of defendant - IOCL. In the instant case, the original lease-deed itself also stood expired on 01.03.2011 after expiry of fifteen years of its period and in view of admitted position that no fresh lease-deed was ever executed by the plaintiff, Navratan Singh Rajpurohit, in favour of defendant - IOCL, after 2011, though IOCL invited him to execute fresh lease deed vide their reply to the quit notice (Ex.6), quoted above, the lessee/defendant IOCL could not be treated as having any valid possession as lessee in the suit premises after 2011. The claim of the defendant, IOCL hinging on the aforesaid Clause (n) of automatic renewal on expiration of lease period, does not bind the present appellant/plaintiff, as already noted above. The lease in any case was also determined or terminated by him in the year 2008 itself, therefore, both in view of Clause (a) and Clause (h) of Section 111 of the Transfer of Property Act, the IOCL cannot be said to have any valid lease-hold rights in its favour after 2008 or at least after 2011.
Explaining the difference between renewal of lease and extension of lease, a learned Single Judge of Calcutta High Court in the case of Ansuman Mullick Vs. Mallika Investment Co. (P) Ltd. & Ors. reported in , AIR 2004 Calcutta 316 held that while extension does not create a fresh or new lease, renewal does, and therefore, the condition of Section 107 should be complied with in the case of renewal of lease. in the said case, where the original lease was only for a period of 10 years and the renewal was made for a period of 60 years, whereas the original lease-deed did not provide for any extension of lease period, Court held that such extension of time could not be held to be automatic by a unilateral exercise of option of renewal as is sought to be contended before this Court in the present case also. The relevant extract of the judgment is quoted herein below for ready reference:-
"Renewal of lease and extension of lease are two distinctly separate concepts. While extension does not create a fresh or new lease, renewal does. If it is a renewal and hence a fresh lease, it must be created according to provisions in S. 107. Whether the option clause contained in a lease provides for renewal or extension is to be ascertained primarily from its terms and conditions. If there is uncertainty or ambiguity, the other covenants of the lease would be read to find out the intention of the parties. Oral evidence led by the parties at the trial would help to resolve the issue. But at the interim stage the court has to find out the answer only from the lease and other undisputed pieces of admissible evidence.
In the instant case the suit property consisted of a 5 storied building occupied by tenants and situated in a prime locality. The owner of the building executed a lease deed thereof for 10 years in favour of a private limited company @ Rs. 1000/- p.m. The lessee i.e. the private limited company was to take possession of the property through attornment of tenancies by the tenants thereof. After the death of the owner, the plaintiffs became owners of the suit property. A Director of the lessee company gave a notice to the executor of the estate of the deceased owner for renewal of the lease for a further period of 60 years in terms of clause in the lease deed. In reply the executor informed the lessee that the lease is renewed for a further term of 60 years on the same terms and conditions. The plaintiffs, filed a suit claiming that the lease in respect of the suit property was not lawfully renewed by the executor in favour of the said lessee, the defendants, and they are not entitled to collect the rent from the tenants. The plaintiffs prayed that the receiver be appointed during pendency of the suit.
Held, in the entire lease nothing was mentioned about extension of the term of the lease beyond the period of ten years. The terms and conditions of a clause on basis of which the lessee claimed that it is entitled to an automatic extension of lease for a further period of sixty years, only spoke about the lessee''s entitlement to a renewal on same terms and conditions. The requirement of execution and registration of a fresh lease was not expressly dispensed with, nor it could have been legally dispensed with. From the facts it is apparent that the parties never intended the lease to be one for seventy years. Prima facie, the renewal clause did not give any right to the lessee company to enjoy automatic extension of the term of the lease by unilateral exercise of the option for renewal. The renewal required execution and registration of a fresh lease. Thus prima facie the lease was never renewed in accordance with law."
In the case of present defendant - IOCL itself, the Bombay High Court in the case of Indian Oil Corporation Ltd. Vs. Smt. Alka Agarwal reported in , AIR 2007 Bombay 113 held that the tenancy would automatically stand determined on the expiry of lease period stipulated in the lease-deed and the lessee would be a tenant holding over and in such cases order for eviction was proper. The relevant extract of the said judgment is quoted herein below for ready reference:-
"In the present case after expiry of the first 20 years period, though a notice for execution of lease deed for further period, was given by the lessee they chose to remain silent till they were served with the notice by the lessor terminating the lease. They did not call upon the lessor to execute the lease deed for further period of 10 years. Admittedly, there is no registered instrument executed between the parties after expiry of 20 years. It is clear from the very language of Section 107 of the Act a lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. In the absence of registered instrument, it must be a monthly lease. In view of the clear provisions of Section 107, in the absence of registered instrument it must be held that it was holding over and not continuation of old tenancy for further period of 10 years. That would be harmonious construction of Section 107 read with Section 116 in the facts of the present case. The tenancy after the first period of 20 years was automatically determined on the expiry of 20 years period which was stipulated in the lease deed. Thereafter the petitioner-lessee continued to hold the property and the lessor accepted the rent The lease was, therefore, renewed from month to month. Eviction of lessee after termination of lease, proper."
Hon''ble the Supreme Court in the case of Burmah Shell Oil Distributing (now known as Bharat Petroleum Corporation Ltd.) Vs. Khaja Midhat Noor & Ors. reported in , AIR 1988 SC 1470 also held that where lease was not for agricultural purpose and the sub-lessee continued to be in possession after expiry of lease period and the rent paid by sub-lessee was accepted by the lessor, the termination of lease by one month notice on lessee alone is valid and separate notice to sub-lessee is not necessary. The relevant extract of the said judgment is quoted herein below for ready reference:-
"A lease deed was executed with the permission to sub-lease the same. The lease was not for agricultural purposes and it was for a term of 10 years. The lease period expired on 16.1.1968. After this period the sub-lessee continued to pay the rent which was being accepted continuously from month to month by the lessor. A notice was issued by the lessor to the lessee terminating the lease and for giving vacant possession of the land by 15.1.1973 and also removal of building etc. by 16.1.1973. The notice stated that the lessee was to surrender the leasehold land on expiry of 15.1.1973. No notice was given separately to the sublessee terminating the lease. A suit for ejectment was filed. The lessee did not contest the suit but the sublessee contested the suit on the ground that the lease was not validly terminated.
Held, that there was a valid notice of termination of the lease of the lessee. In any event the lessee did not dispute and accepted that there was a valid termination of the lease hold property. 1988 BBCJ (HC) 59, Affirmed."
The Delhi High Court in the case of Bandhu Machinery P. Ltd. Vs. Om Prakash Sikka & Ors. reported in , AIR 2009 Delhi 33 held that objection as to sufficiency of quit notice under Section 106 of the T.P. Act cannot be entertained where the lease expires by efflux of time and in which case no statutory notice is required. The relevant Para 11 of the said judgment is quoted herein below for ready reference:-
"11. We are also of the opinion that the appellant himself having admitted the period of currency of rent deed in question in his written statement, the period of tenancy had come to an end by efflux of time on the 30th April, 2004. The Supreme Court in the case of Poonam Chand v. Moti Lal, reported as , AIR 1964, Supreme Court, 461, has held that if the term of the term of tenancy expires by efflux of time no question of statutory notice would arise."
A learned Single Judge of Madras High Court in the case of Bharat Petroleum Corporation Ltd. Vs. V. Ashvinraj reported in , 1997 (1) All India Rent Control Journal 408 also held that unless the option of renewal is validly exercised, there would be no automatic renewal of the lease. The relevant paras 10 and 10-B of the said judgment are quoted herein below for ready reference:-
"10. Now, coming to the main question whether there would be automatic renewal of the lease, once the abovesaid option for renewal is validly exercised, even though the defendant has not taken any steps to get the lease deed executed and registered duly and even though such a lease deed has not come into being at all. In this regard, both the trial Court and the appellate Court have held that there would not be any such automatic renewal and for coming to the conclusion the trial Court has relied on Section 5 (2) and the lower appellate Court has also relied on the decision in Hindustan Petroleum Corporation Ltd. v. Vummidi Kannan, (DB). But the contention of learned counsel for the appellant is that in view of Section 5 (2) of the Act, the appellant would get automatic renewal of the lease pursuant to its exercise of the option to get renewal, under Ex. B-1. He also submits that (supra) would not apply to the present facts since that case only dealt with the exercise of option for renewal of the lease, pursuant to the relevant clause contained in the contract between the parties and not pursuant to statutory provision like Section 5(2) of the Act as in the present case.
10B. In my view, the abovesaid, reasoning would reply to the present case also, even though in the present case, the exercise, of the option for the renewal is not based on the contract between the parties, but on the above said statutory provision, viz., Section 5(2) of the Act. It has been noted already that Section 5(2) only says that the lease shall if so desired by the Central Government, be renewed on the same terms and conditions..... "In other words, it does not say that the lease shall stand renewed or shall automatically get renewed, but it only says, "shall be renewed". So, unless the other formalities required under Section 107 of the Transfer of Property Act are complied with and a lease deed as such is executed and registered duly, the defendant lessee would not secure leasehold interest in the property in question after the expiry of the prior lease on 31-3-1983. Admittedly, the defendant has not taken any further steps after the abovesaid exercise of option under Ex. B-1. Even though the plaintiff, under Ex. A-6, expressed his unwillingness to give a renewal of the lease, the defendant could have worked out remedies open to it under law, for compelling the plaintiff to execute and register a proper lease deed pursuant to the option exercised and pursuant to Section 5(2) of the abovesaid Act. The defendant, having not taken any such steps so far, cannot at this distance of time, contend that the possession suit initiated by the plaintiff should fail. At least when the suit notice Ex. A-1 dated 8-4-1983 terminating the lease and demanding possession was received by the defendant on 12-4-1983 (as borne out by Ex. A-2), the defendant should have taken necessary steps for working out remedies open to it in the light of Section 5(2) of the Act and the fact that it has exercised its option for renewal. But, nothing has been done by the defendant so far. In such a situation, the plaintiff is bound to succeed."
Now let the cases relied upon by Mr. Om Mehta, learned counsel for the respondent/defendant- IOCL be dealt here.
In the case of Rawat Hardeo Singh Vs. State of Rajasthan reported in , AIR 1981 Rajasthan 280, a learned Single Judge of this Court held that if there is contract to the contrary and a different period of notice is contemplated of Section 106 of the T.P. Act relating to giving of fifteen days expiring with the end of the month of tenancy have no application. This case is not applicable and does not support the case in hand as the Clause (n) of the lease-deed, reproduced above, does not require any fixed period notice in the present case.
In the case of Laxmidas Bapudas Darbar & Anr. Vs. Smt. Rudravva & Ors. reported in , 2001 AIR SCW 3452, heavily relied upon the learned counsel for the defendant IOCL, the Hon''ble Apex Court held under the provisions of Karnataka Rent Control Act, 1961, in the case of fixed term contractual lease that the eviction during the subsistence of the lease is permissible only on the ground/grounds provided under the Rent Act. The non-obstante clause in Section 21 of the Rent Act was held to be not having obliterating effect on the contract of tenancy in totality. The relevant portion of the said judgment from Para 18 is quoted herein below for ready reference:-
"18. The effect of the non-obstante clause contained under Section 21 of the Karnataka Rent Act on the fixed term contractual lease may be explained as follows:-
(i) On expiry of period of the fixed term lease, the tenant would be liable for eviction only on the grounds as enumerated in Clauses (a) to (p) to sub-section (1) of Section 21 of the Act.
(ii) Any ground contained in the agreement of lease other than or in addition to the grounds enumerated in Clauses (a) to (p) of sub-section (1) of Section 21 of the Act shall remain inoperative.
(iii) Proceedings for eviction of a tenant under a fixed term contractual lease can be initiated during subsistence or currency of the lease only on a ground as may be enumerated in Clauses (a) to (p) of sub-section (1) of Section 21 of the Act and it is also provided as one of the grounds for forfeiture of the lease rights in the lease deed, not otherwise.
(iv) The period of fixed term lease is ensured and remains protected except in the case indicated in preceding paragraph."
This case is also of little help to the defendant, IOCL in the present case, inasmuch as this Court has come to the conclusion that there is no automatic renewal after expiry of initial period of fifteen years in the present case and the plaintiff, Navratan Singh Rajpurohit, is not bound by the terms of the lease executed by erstwhile lessor, Sh. Bhanwarlal.
In the case of Modern Hotel, Gudur, represented by M.N. Narayanan Vs. K. Radhkrishnaiah & Ors. reported in , (1989) 2 SCC 686, (Para 11) relied upon by learned counsel for the respondent, IOCL is also for no avail in the present case. Para 11 of the said judgment is also quoted herein below for ready reference:-
"11. The second contention advanced before us is equally weighty. The lease being for a terms of 30 years is to expire in Sept. 1999. As we have already said, the lease did not stipulate a forfeiture clause and in the absence of a forfeiture clause in the lease leading to terminating by forfeiture, the contractual tenancy was subsisting under the provisions of the Transfer of Property Act and there could not be any eviction from such a tenancy."
In the present case, however, the plaintiff has terminated the lease under Clause (h) of Section 111 of the T.P. Act after purchase of the suit property in court auction by him in the year 2008 and since he was not bound by the terms of the lease-deed executed by erstwhile lessor, Sh. Bhanwarlal, this judgment is of no help in the present case.
To the similar effect is the judgment of Madras High Court in the case of P. Ramaswami Naidu Vs. Venkataramanjulu Naidu & Anr. reported in , AIR 1914 Madras 301 and the same is also of no help to the defendant/respondent in the present case.
The Full Bench of Karnataka High Court in the case of Sri Ramakrishna Theatres Ltd. Vs. General Investment and Commercial Corporation Ltd. & Ors. reported in AIR 1993 Karnataka 90, has held as under:-
"Where the tenant obtained a land on term lease along with a building thereon and other appurtenant land and buildings, the landlord would not be entitled to seek eviction of a tenant before the expiry of the period of lease when there is no provision for the forfeiture of lease in the lease deed.
If the landlord is permitted to evict the tenant even before the expiry of the lease period by resorting to the provisions of the Act the resultant mischief will be irreparable. Many of the commercial and industrial premises are obtained by the entrepreneurs on term lease and huge investments are made on buildings and machineries on the assurance that such a tenant is secured in possession of the leasehold during the lease period. If, however, a landlord can evict such a tenant within a few months after the grant of the lease or even before the expiry of the lease period under Section 21 of the Act the exercise of the tenant in developing the land for commercial or industrial purposes will be rendered futile. For example, under Section 21(1)(h) if the leased premises is a land only, the landlord is entitled to seek eviction if such land is reasonably and bona fide required by him for the erection of a new building which a local authority or other competent authority has approved or permitted him to build thereon. If a landlord makes out a case that he requires the land leased by him for the erection of a new building and that such a requirement is reasonable and bona fide, an unconditional order of eviction will have to be made under clause (h) of Section 21(1). If so, the entire investment of the tenant will have to be sacrificed and it will not be of any consolation to him that probably he may dismantle and remove the structures and machineries put up by him. A law cannot be interpreted in such a way as to cause such a mischief and hardship. Such an interpretation of the law would not advance any public interest. The object of the Act is not to confer such a wide and large right on the landlord as to enable him to recover possession of the leased premises at a time when he possessed no such right under general law.
The overriding effect of the clause in sub-section (1) of S. 21 of the Act is limited to the subject referred to immediately by the words following. In other words, even if any other law or contract provides for recovery of possession the same shall be of no effect and the eviction can be made only on the grounds stated in clauses (a) to (p) of the proviso. This indicates that the landlord should have a right to recover possession and that right cannot be held to vest in him during the period of the term lease unless there is something in the lease deed which provides for the determination of the lease; in such a situation, even after the determination of the lease in the manner stated in the term lease, the recovery of possession will have to be made only by recourse to Section 21(1)."
The said case is also distinguishable from the facts of the present case as neither any such non-obstante clause as obtaining in Section 21 of the Karnataka Rent Act is available in the present case, nor the eviction decree has been granted prior to termination of the lease period though this Court has held that lease could be determined or terminated by the purchaser even prior to expiration of fifteen years'' period in the year 2011. However, since the decree in the present case has been refused by the court below and is being granted by this Court, now after many years after lapse of year 2011, this judgment is of no help to the lessee/defendant IOCL.
The other judgments relied upon by Mr. Om Mehta, learned counsel for the respondent/defendant are almost to the same effect as discussed above and, therefore, detailed analysis of all other judgments is also not found relevant here, except the judgment of State of U.P. & Ors. Vs. Lalji Tandon (D) reported in , AIR 2004 SC 32 in which, in Para 13, the Court explained the difference between the extension of lease and renewal of lease. Para 13 of the said judgment is also quoted herein below for ready reference:-
"In India, a lease may be in perpetuity. Neither the Transfer of Property Act nor the general law abhors a lease in perpetuity. (Mulla on the Transfer of Property Act, Ninth Edition, 1999 p. 1011). Where a convenant for renewal exists, its exercise is, and the consent of the lessor is unnecessary. (Barker v. Merckel (1960) 1 All ER 668, also Mulla, ibid, p. 1204). Where the principal lease executed between the parties containing a covenant for renewal, is renewed in accordance with the said covenant, whether the renewed lease shall also contain similar clause for renewal depends on the facts and circumstances of each case regard being had to the intention of the parties as displayed in the original covenant for renewal and the surrounding circumstances. There is a difference between an extension of lease in accordance with the covenant in that regard contained in the principal lease and renewal of lease, again in accordance with the covenant for renewal contained in the original lease. In the case of extension it is not necessary to have a fresh deed of lease executed; as the extension of lease for the term agreed upon shall be a necessary consequence of the clause for extension. However, option for renewal consistently with the covenant for renewal has to be exercised consistently with the terms thereof and, if exercised, a fresh deed of lease shall have to be executed between the parties. Failing the execution of a fresh deed of lease, another lease for a fixed term shall not come into existence though the principal lease in spite of the expiry of the term thereof may continue by holding over for year by year or month by month, as the case may be."
In the present case, this Court has already held that there was no renewal in terms of Clause (n) of the lease-deed by the purchaser of the leasehold rights in the court auction and the terms of previous lease-deed do not bind him, therefore, the contention of the learned counsel for the respondent/defendant IOCL that it was merely a case of extension of lease period as per Clause (n) of the lease-deed cannot be accepted. Clause (n) nowhere uses the words "extension of period" but employs the word "renewal" more than once in the said clause, therefore, the said judgment is also distinguishable. The other clauses of the lease-deed, re-produced above, giving pre-emptive right to the lessee, IOCL, to pre-peremptorily extend such period of renewal even against the transferee and also to peremptorily purchase the leased premises, did not apply in the present case since the sale in question of the suit property was not by the original lessor, namely, Sh. Bhanwarlal, but by the court in a court auction held against said Sh. Bhanwarlal upon the said judgment debtor defaulting in satisfying of decree against him. Since, the lease-deed itself has been held by this Court to be not applicable and binding the present plaintiff/appellant, Navratan Singh Rajpurohit and, therefore, all these clauses are of little help to the defendant, IOCL in the present case against the appellant/plaintiff, not they were ever invoked by the lessee IOCL in the present case. Therefore, an assumed applicability thereof cannot be of any help to the defendant- IOCL. The plaintiff purchaser was never put to notice of all these terms, nor he ever accepted the same. Unless and until a fresh lease-deed with same terms was executed between these parties also after the court auction, these terms of the lease-deed cannot be enforced against the present plaintiff purchaser, Navratan Singh Rajpurohit.
Thus, on an over all analysis of the facts and the legal position in the present case, the present first appeal filed by the appellant/plaintiff, Navratan Singh Rajpurohit, deserves to be allowed and eviction decree in favour of plaintiff deserves to be granted.
Ordered accordingly. The first appeal of the plaintiff is allowed. No costs.
In the circumstances, it is directed that the respondent/defendant/tenant- IOCL shall hand over the peaceful and vacant possession of the suit property in question to the appellant-Navratan Singh Rajpurohit, on or before 31.03.2017 and shall pay mesne profit @ Rs. 15,000/- per month commencing from the month of March, 2016 and will further continue to pay the mesne profit each month by 15th day of the next succeeding month or in advance to the appellant-landlord-plaintiff also and in case there is any default in payment of mesne profit, the period for eviction shall stand reduced and the decree of eviction would become executable forthwith. The defendant-tenant, IOCL shall also clear all the arrears of rent and mesne profits and pay the same to the plaintiff-appellant within three months from today, otherwise the same will bear interest @9% per annum. The defendant/tenant shall also not sub-let, assign or part with the possession of the suit premises or any part thereof in favour of any one else and would not create any third party interest in the same during the aforesaid period and if it is so done, the same would be treated as void. The defendant-tenant shall furnish a written undertaking incorporating the aforesaid conditions in the trial court within three months and one copy thereof along with affidavit, in this Court. It is made clear that if the peaceful and vacant possession of the suit premises is not handed over to the appellant-plaintiff within the stipulated time period i.e. on or before 31.03.2017 or mesne profits are not paid as directed above, besides the expeditious execution of the decree in normal course, the appellant-plaintiff shall also be entitled to invoke the contempt jurisdiction of this Court. No costs. A copy of this judgment be sent to the learned Court below and the parties concerned forthwith. Decree be made accordingly.