Maharashtra Food Industries And ... vs Kamalabai Manikrao Wath And Ors.
2002 Latest Caselaw 1031 Bom

JUDGMENT

D.D. Sinha, J.

1. Heard Mr. Gordey, learned counsel for the applicants and Mr. Bhangde, learned counsel for the respondents 1 to 3 -landlord.

Rule made returnable forthwith by consent of the parties.

2. Mr. Gordey, learned counsel for the applicants, contended that the applicants are the tenants of respondents 1 to 3. The applicant No. 1 is a Partnership Firm running a manufacturing unit, and manufactures bakery items in the tenanted premises. The respondents 1 to 3 filed an application for termination of tenancy of the applicant No. 1 before the Rent Controller, Amravati, seeking

permission under Clause 13(3) (iii) and 13(3) (vi) of the C.P. and Berar Letting of Premises and Rent Control Order, 1949. Both the parties adduced evidence before the Rent Controller and permission was granted to the respondents 1 to 3 to terminate the tenancy of applicant No. 1 vide order, dated 8-10-1987.

3. Mr. Gordey, learned counsel, further contended that the applicant No. 1 preferred an appeal against the order of Rent Controller, which was registered as Revenue Appeal No. 71 (2) /1987-88, and was dismissed vide order, dated 28-4-1988, passed by the Resident Deputy Collector, Amravati.

4. The applicants thereafter preferred Writ Petition No. 2625 of 1988 before this court against the orders passed by the Revenue Appellate Authority and the Rent Controller, Amravati. This court partly allowed the said petition filed by the applicants and permission granted by the Rent Controller under Clause 13(3) (vi) of the Rent Control Order was set aside.

5. The applicants have preferred Letters Patent Appeal bearing No. 118 of 1993 against the order passed by the learned Single Judge in the above Writ Petition and this court has admitted the Letters Patent Appeal for final hearing. Thus, the permission granted by the Rent Controller has not attained finality as on the date of filing of the present Revision Application.

6. Mr. Gordey, learned counsel, contended that in pursuance of the permission granted by the Rent Controller on 8-10-1987, the respondents 1 to 3 filed an eviction suit against the applicants and the respondents 4 to 6, which was registered as Small Cause Suit No. 389 of 1987. The respondents 1 to 3 issued fifteen days notice of termination of tenancy on 29-10-1987, which was to take effect by November, 1987 on the premise that the tenancy was monthly tenancy.

7. Mr. Gordey, learned counsel, submits that the applicants upon service of notice of eviction suit filed their Written Statement and contended therein that the premises were taken by the applicants for manufacturing process and hence the notice terminating tenancy of the applicants was an invalid notice, as the same was not in compliance with the provisions of Section 106 of the Transfer of Property Act. It is contended that the defence of the applicants before the trial Court was that the quit notice was not a valid notice and hence the tenancy of the applicants was not terminated in accordance with law and as the permission granted by the Rent Controller in favour of the respondents 1 to 3 was yet to attain finality, the suit was liable to be dismissed.

8. It is submitted by Mr. Gordey that both the parties to the suit led evidence in support of their respective claims. The applicants placed various documents on record to show that the tenanted premises were used for manufacturing purpose and tenancy could be terminated only by issuing a notice of six months as required under Section 106 of the Transfer of Property Act. The trial Court did not consider the voluminous documentary evidence filed by the applicants on record to show that the premises were being used for manufacturing purposes and not for business purposes. It is also contended that the trial Court wrongly interpreted and construed the purport of the document (Exh. 170) and decreed the suit filed by the landlords-respondents 1 to 3.

9. Mr. Gordey further argued that the applicants being aggrieved by the judgment and decree passed by the trial Court preferred an appeal before the Additional District Judge, Amravati, which was registered as Regular Civil

Appeal No. 288 of 1994. However, the Lower Appellate Court dismissed the appeal preferred by the applicants on 6-2-2001. Being aggrieved by the same, the applicants have filed the present Revision Application.

10. The learned counsel for the applicants mainly challenged the orders passed by the lower courts on the ground that the respondents 1 to 3 issued 15 days' notice of termination of tenancy on 29-10-1987, which was to take effect by the end of November, 1987 on the totally wrong premise that the tenancy was a monthly tenancy. It is contended that while considering the purport of Section 106 of the Transfer of Property Act, the relevant consideration in deciding the nature of tenancy is the object for which the tenancy is created. It is contended that in determining the nature of tenancy, whether monthly or yearly, the purpose for which the tenancy is created is a relevant consideration. It is submitted that the manner of payment of rent does not demonstrate the nature of tenancy, i.e., monthly or yearly. It is the object alone which would determine the nature of tenancy whether monthly or yearly. It is further contended that duration of tenancy is another relevant consideration to determine whether the tenancy was, monthly or yearly. It is submitted that on the backdrop of the above referred legal position, the controversy in issue needs to be considered. It is stated that in the instant case, the respondents 1 to 3 initially entered into an Agreement of Lease for a period of three years, which was extended by another seven years, with Bharat Food Industries. It is contended that by virtue of Tripartite Agreement of Lease, dated 9-8-1968, the said lease was transferred in favour of the applicants on the same terms and conditions which were agreed and entered into in the original Agreement of Lease between the respondents 1 to 3 and Bharat Food Industries. It is contended that the period of lease, which remained, was four years when the same is transferred in favour of the applicants by Tripartite Agreement of Lease on the same terms and conditions. It is, therefore, contended that the period of lease undoubtedly was more than one year and the same is for business purpose, since the manufacturing process is a part and parcel of the concept of business and hence this would be a lease of immovable property for manufacturing purpose and, therefore, shall be deemed to be a lease for year to year and hence notice of six months as contemplated under Section 106 of the Transfer of Property Act was required to be given by the respondents 1 to 3 landlords. In the instant case, undoubtedly, the notice given is of 15 days by the landlords and, therefore, the same is totally invalid and not sustainable in law. Consequently the suit instituted on such notice and the Judgments rendered on such invalid notice are bad in law and for the same reason the appellate order also is invalid. It is, therefore, contended that the entire approach of the trial Court, as well as lower appellate court in holding that the lease was from month to month is totally misconceived and unsustainable in law. Mr. Gordey, learned counsel for the applicants, in order to substantiate his contention, placed reliance on the Judgment of the Apex Court in Ram Kumar Das v. Jagdish Chandra Deo, Dhabal Deb and Anr., .

11. Mr. Gordey, learned counsel, contended that the trial Court as well as lower appellate court gave undue weightage to the irrelevant consideration that the applicants did not raise these grounds before the Rent Control Authorities, and the permission, which is granted by the Rent Controller, was confirmed by

the learned Single Judge of this court. It is contended that as far as the proceedings before the Rent Controller are concerned, it is for the landlords to prove their case in respect of the Clauses in the Rent Control Order, on the basis of which the landlord is seeking permission to terminate the tenancy. The tenant is not required to specifically raise any objection in respect of the notice, since the same is issued after the termination of the proceedings under the Rent Control Order one way or the other. Mr. Gordey, therefore contended that the findings recorded by the trial Court, as well as lower appellate court placing reliance on this aspect are misconceived and cannot be accepted, which renders the impugned judgments unsustainable in law.

12. Mr. Bhangde, learned counsel for the respondents, on the other hand, supported the impugned orders passed by the courts below and contended that the evidence adduced by the parties particularly that of Mr. Darshanlal Navlani, the sole witness of the applicants, would show that he has admitted in his evidence that he used to pay rent monthly. The tenancy month commences from first day of each English Calendar month and expires on the last day of respective months. It is further contended that this witness has categorically admitted that the yearly rent was not agreed. Mr. Bhangde further contended that Mr. Darshanlal Nalvani has further admitted that Bharat Food Industries was the monthly tenant of the plaintiffs and the suit premises have been taken from the plaintiffs on the same terms and conditions on which the suit premises were given to Bharat Food Industries. Mr. Bhangde further contended that in para 13 of the tripartite agreement entered into by the parties, there is a specific mention that Party No. 1, i.e., Maharashtra Food Industries, shall pay the rent of Rs. 300-00 per month, clear off all deductions in every month in advance on or before 7th of every month. It is contended that the specific terms and conditions of the agreement coupled with the evidence on record, particularly that of the witness of the applicant-Firm, go to show that the tenancy was from month to month and, therefore, the notice, which was issued under Section 106 of the Transfer of Property Act by the respondents 1 to 3 - landlords giving fifteen days time, was valid and sustainable in law. It is contended that the trial Court as well as lower appellate court rightly considered this aspect on the basis of the evidence adduced by the parties - vis-a-vis the provisions of Section 106 of the Transfer of Property Act and, therefore, the impugned judgments and orders are sustainable in law.

13. I have given my anxious thought to the various contentions canvassed by the respective counsel and perused the Judgments of the Apex Court referred by the parties as well as provisions of Section 106 of the Transfer of Property Act.

On the backdrop of the above referred circumstances, following undisputed facts emerge:--

14. The respondents 1 to 3 are the landlords of the premises in question. They have entered into an Agreement of Lease of an immovable property, in respect of the premises in question with Bharat Food Industries initially for a period of three years, which was extended by seven more years. At the later point of time, a tripartite Agreement of Lease was entered into between the applicant No. 1 and Bharat Food Industries as well as respondents-landlords and the

premises were transferred to the applicants on lease on the same terms and conditions which were applicable to Bharat Food Industries. It is, therefore, not in dispute that the terms on which the premises were leased out to Bharat Food Industries, were the same terms on which the landlords agreed to accept the present applicants as tenants in the suit premises. It is also not in dispute that Bharat Food Industries had taken the premises for running a bakery and the landlords were knowing that the premises were taken by the tenants on lease for manufacturing process. The same lease with all the terms and conditions attached to it was transferred in favour of the applicants and the respondents 1 to 3 -landlords agreed to accept the applicant No. 1 as a tenant in the suit premises. It is also not in dispute that the period of lease at the relevant time was more than one year. It is also not in dispute that the applicants were required to pay amount of Rs. 300-00 per month to the respondents 1 to 3 - landlords. Similarly, Mr. Darshan Navlani, who was the sole witness examined by the applicants, has admitted that he used to pay rent every month to the landlord on behalf of the applicants and admitted that the tenancy commences from first day of each English Calendar month and expires on the last day of respective month and he used to pay monthly rent on behalf of the applicants. This witness has also admitted that Bharat Food Industries was a monthly tenant of the respondents-landlords and the premises, in question, were taken on lease by the applicants on the same terms and conditions on which the suit premises were given to Bharat Food Industries. It was also admitted by this witness that the rent was not agreed to be paid yearly. The notice, dated 29-10-1987, issued by the respondent 1 to 3-landlords for termination of tenancy was of fifteen days.

15. In the light of above referred undisputed facts, it would be appropriate at this stage to consider the purport of provisions of Section 106 of the Transfer of Property Act, which reads thus:--

"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 months' notice expiring with the end of a year of the tenancy; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice expiring with the end of a month of tenancy."

The plain reading of the first half of the provision, which related to lease of immovable property for agricultural or manufacturing purpose, would show that in absence of a specific contract in this regard between the parties, such lease shall be deemed to be a lease from year to year, terminable by six months' notice. The scheme of this part of the provision would come into effect only if there is no contract between the lessor and the lessee in respect of movable property for agricultural or manufacturing purpose. The contingency contemplated in this part of the provision takes effect only in absence of a contract for this purpose and not otherwise. The intent of the provision is apparent that in absence of such contract and if the lease pertains to immovable property, which is for manufacturing purposes, deeming fiction is created and by virtue of such deeming fiction, such lease will be deemed to be a lease from year to year basis, and not otherwise. In

order to get the protection of the deeming provision, the requisite contingency is absence of contract.

16. In other words, what is intended by this provision of Section 106 is that the contract of lease, shall prevail as against the contingency contemplated in this part of Section 106 of the Transfer of Property Act, i.e., because the intention of the parties who have entered into the contract shall always be the governing factor in determining the purpose of lease and the nature of lease, whether monthly or yearly, rather than leaving this aspect to be determined on the basis of duration of the lease only. The contract even otherwise always demonstrates the valid offer and acceptance by the parties and spells out the intention of the parties to the contract which, in my opinion, is the predominant factor which implies the intention of the parties. It is, no doubt, true that the purpose for which the tenancy is created has a bearing in determining the nature of lease. However, that would be available only in absence of the contract. It will be difficult to hold that merely because the duration is more than one year and the lease is created for manufacturing purpose, one can jump to the conclusion that the same is from year to year without considering the other stipulations in such agreement. Under the scheme of Section 106 of Transfer of Property Act, such interpretation is permissible only in absence of the contract.

17. In the instant case, the contract between the parties is not disputed. It is also not disputed that the applicant No. 1 was to pay the amount of Rs. 300-00 per month to the respondent-landlord. Apart from this, there is a corroborative piece of oral evidence adduced by witness of the applicants, i.e., Mr. Darshan Navlani, who has reaffirmed the fact that the tenancy month commences from first day of each English Calendar month and expires on the last day of the respective month. He used to pay rent monthly and yearly rent was not agreed to be paid by the applicants. The above referred stipulation in the agreement as well as admission given by the applicants' witness in the evidence in no uncertain terms demonstrate that the intention of the parties, i.e., respondents-landlords and the applicants was to create monthly tenancy though the period of lease is more than one year. However, the tenancy was from month to month.

18. On the backdrop of these aspects, if the analogy contemplated by first part of Section 106 of the Transfer of Property Act is applied in the instant case, I have no hesitation to hold that this part of Section 106 which relates to lease of immovable property for manufacturing purposes is not attracted at all. The contention advanced by Mr. Gordey, learned counsel for the applicants, in this regard is misconceived and devoid of substance.

19. The Supreme Court in case of Ram Kumar Das v. Jagdish Chandra Deo, Dhabal Deb and Anr., was faced with the situation where it was conceded that the tenancy was not for manufacturing or agriculture purpose and the object was to enable the lessee to build structure upon the land and in these circumstances, it would be regarded as tenancy from month to month unless there was a contract to the contrary. Mr. Setalvad, who appeared on behalf of the defendant-appellant, placed reliance upon the fact that the rent paid was an annual rent and from this fact it can fairly be inferred that

the agreement between the parties was certainly not to create monthly tenancy. In view of the above referred facts, the Supreme Court in Para 15 observed thus:--

"(15) But one serious objection to this view seems to be that this would amount to making a new contract for the parties. The parties here certainly did not intend to create a lease for one year. The lease was intended to be for a period exceeding one year, but as the intention was not expressed in the proper legal form, it could not be given effect to. It is one thing to say that in the absence of a valid agreement, the rights of the parties would be regulated by law in the same manner as if no agreement existed at all; it is quite another thing to substitute a new agreement for the parties which is palpably contradicted by the admitted facts of the case."

20. The facts involved in the present case are entirely different. It is not disputed that the stipulations in the Agreement of lease entered into between the parties are explicitly clear and convey that the applicants-tenants agreed to pay monthly rent of Rs. 300-00, clear off all deductions in every month in advance on or before 7th April coupled with the evidence adduced by Mr. Darshan Navlani, witness for applicants referred to hereinabove would in unequivocal terms demonstrate that the tenancy month commences from first day of each English Calendar month and expires on the last day of respective months and he used to pay monthly rent on behalf of the applicants to the respondents. He has also admitted that it was not agreed to pay yearly rent. In view of these altogether different facts, the ratio laid down by the Apex Court in the above referred Judgment does not support the case of the applicants.

21. It needs to be noted that there is no prohibition in law, factual or otherwise, for creation of lease for a period more than one year and by agreement of parties the rent may be payable every month. Such document of contract of lease is perfectly sustainable in law. As stated hereinabove, the intention of the parties to the lease, whether to treat such lease to be a lease for year to year or month to month is required to be ascertained from the stipulation in such Agreement of Lease. The contingency, which is contemplated in the first half of the portion of provisions of Section 106 of the Transfer of Property Act operates or comes into effect only in absence of a contract written or oral and not otherwise. When there is a document of lease, all the aspects such as duration of lease, nature of lease, i.e., monthly or yearly, would be regulated totally by the stipulations in such document of lease, which demonstrates intention of the parties to the lease and in such situation, provisions of first part of Section 106 of the Transfer of Property Act cannot be said to be applicable. It is, no doubt, true that the duration of lease can be determined in reference to the object or the purpose for which the tenancy or lease is created, however, only in absence of a contract, or a document of lease in order to attract the first half of the provisions of Section 106 of the Transfer of Property Act.

22. In the instant case, there is a concurrent finding of fact that the tenancy is monthly and by notice, dated 29-10-1987, the tenancy of the applicants has been terminated from 30th November, 1987. The said notice has provided more than fifteen days' time expiring with the end of the tenancy month and, therefore,

the quit notice, dated 29-10-1987, validly terminates the tenancy of the applicants and the applicants have no other option, but to vacate the tenanted premises. In view of the facts and circumstances enumerated hereinabove, the findings recorded by the courts below are just and proper and are also sustainable in law.

23. The contention canvassed by Mr. Gordey, learned counsel for the applicants, that the impugned Judgments are not sustainable in law, since the reliance is placed partly on the aspect that the applicants did not raise the ground in respect of validity of notice under Section 106 either before the Rent Control Authority, or before the High Court in those proceedings in Writ Petition No. 2625 of 1988 is not correct. It may be observed that though the courts below tried to take some support from this aspect of the matter, however, the findings given by the courts below are mainly on the basis of evidence adduced by the parties in the court and the undisputed recitals in Exh. 170. In my considered view, the impugned judgments and the finding recorded thereunder are independently sustainable in law and merely because the courts below tried to extract some support in this regard, that does not, in my opinion, render either the impugned judgments invalid, nor the finding recorded therein by the courts below unsustainable in law. The contention canvassed by Mr. Gordey, learned counsel for the applicants, in this regard, therefore, is rejected.

24. The contention canvassed by the learned counsel for the applicants that the proceedings under the Rent Control Order have not reached finality since the Letters Patent Appeal is pending against the Judgment of the learned Single Judge and, therefore, the notice issued by the respondents-landlords under Section 106 of the Transfer of Property Act as well as initiation of suit on such notice is bad in law, is also misconceived and devoid of substance. It must be borne in mind that pendency of proceedings does not, by itself, operate as stay of the impugned order unless the court in which such proceedings are pending by way of appeal, revision or otherwise grants a specific order of stay. In the instant case, it is not in dispute that though the Letters Patent Appeal is pending before the Division Bench of this court, there is no order of interim stay granted by the Division Bench staying effect and operation of the order passed by the learned Single Judge. In that view of the matter, the subsequent steps taken by the respondents-landlords in issuing the notice under Section 106 of the Transfer of Property Act and filing of suit cannot be said to be invalid in law.

25. In the instant case, Mr. Gordey, learned counsel appearing for the applicants, neither canvassed before me the validity of the agreement vis-a-vis Section 107 of the Act and, therefore, this court was not required to adjudicate upon this aspect of the matter in the present proceedings.

For the reasons stated hereinabove, no case is made out for interference. Revision is dismissed. Rule discharged.