Canara Bank vs Smt. Shanti Vaish
1998 Latest Caselaw 317 Del

JUDGMENT

M.S.A. Siddiqui, J.

1. This appeal is directed against the judgment and decree dated 27.2.1997 passed by the Additional District Judge, Delhi in Civil Suit No. 53/ 95 decreeing the respondents' suit for appellant's eviction from suit premises bearing No. C-1/A, Mehrauli Road, Green Park Ext., New Delhi and also for recovery of mesne profits

The backdrop of facts is this. By an indenture of lease dated 18.12.1990, the respondents leased to the appellant the suit premises for a term of five years commencing from 6.10.1989. Clause (2) of the lease deed (Ex. P.W.1/2) provided for a renewal of the lease and was in the following terms :

(2). "This lease shall be in force for a period of Five Years certain from 6.10.1989. The lessee shall, however, have the option continue the lease thereafter for a further period of Five Years upto 5.10.1989, provided the option is exercised by serving a registered notice in writing 6 months prior to the expiry of the lease period, on the same terms and conditions expect rent which will be enhanced by 35% as agreed hereto. The lessee shall be at liberty to vacate the 'said premises' any time during the period of occupation on giving three months' notice."

2. On 9th May, 1994, the appellant Bank sent to the respondents the notice (Ex. P.W.1/D-1) exercising its option for renewal of the lease for a period of 5 years from 6.10.1994 till 5.10.1999. On 23.7.1994, respondents sent a registered notice (Ex. P.W.1/3) to the appellant Bank terminating its tenancy w.e.f. 5.10.1994. Despite service of the notice to quit (Ex. P.W. 1/3), appellant did not vacate the suit premises. Thereafter, respondents filed the present suit for appellant's eviction from the suit premises.

3. The appellant/defendant contested the respondents/plaintiffs claim on various grounds. The defendant pleaded, inter alia, that it had exercised the option of renewal of lease by serving the notice dated 9.5.1994 upon the respondents as a result whereof the lease was renewed for a period of 5 years w.e.f. 6.10.1994 till 5.10.1999 and the respondents had also accepted rent from the defendant for periods subsequent to the said notice in accordance with the terms and conditions of the lease deed dated 18.12.1990. The defendant further pleaded that the respondents are not entitled to terminate the lease prior to the expiry of the period of 5 years for which the renewal was promised and agreed to by the respondents under the terms and conditions of the lease deed dated 28.12.1990 and as such the alleged termination of the lease by the respondents vide notice dated 23.7.1994 is illegal and of no consequence.

4. The learned Additional Distt. Judge upheld the respondents' claim that the lease had been validly determined by service of a quit notice under Section 106 of the Transfer of Property Act and accordingly decreed their suit.

5. Learned Counsel for the appellant canvassed the following contentions before us:

(i) the appellant having exercised the option of renewal within the time limited by Clause (2) of the lease deed dated 18.12.1990 is entitled to a renewal of lease and as such an action in ejectment is not maintainable.

(ii) the notice to quit dated 23.7.1994 is invalid and ineffective as it did not expire with the end of the tenancy month of the appellant.

(iii) the learned Additional Distt. Judge has erred, in awarding damages/ mesne profits @ Rs. 30,000/- per month by ignoring the terms and conditions of the lease deed dated 28.12.1990.

6. On a perusal of the impugned judgment, it appears that the learned Additional District Judge has confined his attention to the question whether any valid quit notice under Section 106 of the Transfer of Property Act had been served upon the appellant without entering into the controversy whether such a notice was necessary or not. The learned Additional District judge completely overlooked the fact that the lease was for a term of 5 years with a covenant for renewal for another 5 years i.e. a lease for a definite duration. It needs to be highlighted that the lease deed dated 28-12-1990 is a registered lease deed and the learned Additional District Judge has erroneously held that it is an unregistered document. The lease deed (Ex PW1/2) shows that the respondents, in consideration of the rent reserved, and the conditions contained therein, demised unto the appellant Bank the tenement of the suit premises for a term of 5 years w.e.f. 6.10.1989, with option on the part of the appellant for renewal and subject to its exercising the said option by serving a registered notice in writing6 months prior to the expiry of the lease period. Relevant clauses of the lease deed (Ex PW1/2) are as under :

(1) The lease for purpose of payment of rent and period of lease shall be deemed have commenced from 6.10.1989.

(2) "This lease shall be in force for a period of Five Years certain from 6.10.1989. The lessee shall, however, have the option continue the lease thereafter for a further period of Five Years upto 5.10.1989, provided the option is exercised by serving a registered notice in writing 6 months prior to the expiry of the lease period, on the same terms and conditions expect rent which will be enhanced by 35% as agreed hereto. The lessee shall be at liberty to vacate the 'said premises' any time during the period of occupation on giving three months notice."

7. Thus the lease deed (Ex. P.W.1/2) makes it clear that the lease was to expire on 5.10.1994 and the appellant was required to exercise the option for renewal of lease 6 months prior to the expiry of the lease period. Admittedly, on 9.5.1994, the appellant made a written request for the renewal. Learned Counsel for the respondents contended that the notice for renewal (Ex. PW 1/D-1) being made out of time was ineffective and that there was no ground for excusing the delay. In the instant case, the lease fixes a time within Which the option for renewal of lease is to be exercised. It is an admitted position that the appellant had not exercised the said option within the stipulated time. In our opinion, the stipulation as to time in Clause (2) of the lease deed (Ex. FW 1/2) should be regarded as of the essence of the contract. Thus, the appellant not having exercised the option of renewal within the time limited by the clause is not entitled to a renewal. In this connection, we may usefully excerpt the following observations of their Lordships of the (Supreme Court in Caltex (India) v. Bhagwan Devi, :

"In the present case, the lease fixes a time within which the application for renewal is to be made. The time so fixed is, of the essence of the bargain. The tenant looses his right unless he makes the application within the stipulated time. Equity will not relieve the tenant from the consequences of his own neglect which could well be avoided with reasonable diligence."

8. It is equally clear as provided by Section 111 of the Transfer of Property Act that the lease of immovable property determines by various modes therein prescribed. Now, if the lease of immovable property determines in any one of the modes prescribed under Section 111, the contract of lease comes to an end, and the landlord can exercise his right of re-entry. It has to be borne in mind that Section 111(a) of the Transfer of Property Act, which deals with determination of a lease by efflux of time has to be read with Section 116 of the Transfer of Property Act. But in the present case, there is no averment in the written statement that the appellant was a tenant holding over within the meaning of Section 111 of the Transfer of Property Act. There is nothing on the record to show that the defendant remained in possession of the suit premises after the determination of the lease by efflux of time and the plaintiffs had expressly or by necessary implication assented to its continued possession. There being no such plea of holding over the matter falls to be governed by Section 111(a) of the Transfer of Property Act. In the instant case, the contract of lease expired by efflux of time. There is no question of terminating the contract because the contract comes to an end once the lease determines in any one of the modes prescribed under Section 111 of the Transfer of Property Act. There is, therefore, no question of giving a notice to quit under Section 106 of the Transfer of Property Act (Pooran Chand v. Motilal, Sardari Lal Vishwa Nath v. Pritam Singh, Shanti Devi v. Amal Kumar, AIR 1981 SC 1550).

9. Learned Counsel for the appellant attempted to scuttle the merits of the case by attempting to take the stand that the respondents had not sought the appellant's eviction from the suit premises on the ground of determination of lease by efflux of time but their specific case is that the contract of tenancy had been terminated by the notice to quit under Section `of the Transfer of Property Act and as such the ejectment suit is not maintainable. We are not impressed by the said submission of the learned Counsel for the appellant. In Shanti Devi v. Amal Kumar (supra), it was held that the parties cannot by their pleadings alter the intrinsic character of the tease or bring about a change of the rights and obligations flowing therefrom. In the instant case, the lease was a lease for a definite term and, therefore, expired by efflux of time under Section 111(a) of the Transfer of Property Act. That being so, the service of notice under Section 106 of the Transfer of Property Act was not necessary. On 5.10.1994, the relationship of landlord and tenant ceased, and the defendant became trespasser. Therefore, both on principle and authority the contention of the learned Counsel for the appellant cannot be accepted.

10. Lastly, it was contended that the learned Additional District Judge has committed a grave error in awarding mesne profits @ Rs. 30,000/- per month which is contrary to the terms and conditions of the lease deed (Ex. PW 1/2). The plaintiffs/respondents have claimed mesne profits @ Rs. 40,000/- per month. Admittedly, the suit premises were let out at Rs. 15,000/- per month Plaintiffs' witness Smt. Indra Vaish (PW2) deposed that at the time of institution of the suit, market rate of rent of the suit premises was Rs. 40,000/- per month the appellant/ defendant has not adduced any evidence to rebut the said statement of Smt Indra, Vaish (PW 2). Learned Additional District judge, relying on the said unrebutted statement of Smt. Indra Vaish (PW2), has awarded mesne profits @ Rs. 30,000/- per month. There is nothing on the record to show or suggest that award of mesne profits @ Rs. 30,000/- is either excessive or unreasonble. Consequence, we are not inclined to take a different view on this point.

11. Learned Additional District Judge has also awarded mesne profits @ Rs. 30,000/- p.m. amounting to Rs. 1,20,000/- for periods prior to the date of filing of the suit. Learned Counsel for the respondents has fairly conceded that respondents are not entitled to mesne profits @ Rs. 30,000/- per month for the said period. In our opinion, the plaintiffs are entitled to recover arrears of rent for the said period @ Rs. 15,000/- per month in accordance with the terms and conditions of the lease deed (Ex. PW1/2). The judgment of the learned Additional District Judge must, therefore, is modified so as to direct the appellant to pay to the respondents Rs. 60,000/- instead of Rs. 1,20,000/-, as arrears of rent for the aforesaid period.

12. For the foregoing reasons, the appeal is partly allowed and the impugned judgment and decree are modified to the extent indicated above. Rest of the appeal is dismissed.

No order as to costs.