Core Fiscal Services Pvt. Ltd. And ... vs S. Sakunthala
2007 Latest Caselaw 1798 Del

JUDGMENT

A.K. Sikri, J.

1. The suit of the plaintiff/respondent for possession and damages filed against the defendants/appellants is decreed, insofar as relief of possession is concerned, under Order XII Rule 6 of the Code of Civil Procedure, 1908. Said judgment and decree dated 31.8.2004 has been challenged by the appellants through this appeal.

2. The respondent is the owner of flat No. 67, Khan Market, New Delhi. She leased out this flat (hereinafter referred to as the 'suit property') to the appellants herein for a period of three years, vide lease deed dated 22.12.1999. This three years period was, thus, to expire on 21.12.2002. When this expiry date was approaching, the respondent wrote letter dated 17.12.2002 to the appellants manifesting her intention, namely, she was not interested to extend the lease and, therefore, she wanted vacant possession of the suit property on 22.12.2002.

The appellants, however, did not concede to this demand and continued to occupy the suit premises. The respondent issued notice dated 12.11.2003, followed by another notice dated 2.12.2003, calling up the appellants to vacate the property. As the appellants did not vacate the suit property and refused to handover the possession to the respondent, she filed the suit in the trial court in which the aforesaid decree has been passed.

3. Appellant No. 1 is the company to whom the premises were leased out. The appellant Nos. 2 and 3 are the directors and in that capacity they were imp leaded as the defendants. The appellant Nos. 1 and 2 admitted in the written statement that the premises were taken at a monthly rent of Rs. 21,000/- with effect from 22.12.1999 for an initial period of three years. They also admitted receipt of notices dated 12.11.2003 and 2.12.2003, though they disputed the contention raised therein. Their case was that these notices were of no consequence and were deficient being in contravention of Clause 3(d) of the lease deed dated 22.12.1999. Thus, there was no proper notice terminating the lease. They also took the plea that they had exercised the option of extending the lease period for a further period of three years vide letter dated 1.12.2003 and, therefore, the respondent had no right to file the suit for possession.

4. After coming to know of this position taken by the appellant in the written statement, the respondent filed an application under Order XII Rule 6 read with Section 151 of the CPC praying for decree of possession on the premise that all essential facts, on the basis of which she could get the decree, were admitted by the appellants. The appellants opposed this application, but unsuccessfully. The learned trial court concluded that the existence of relationship of Lesser and lessee was established. The ADJ also opined that there was proper determination of tenancy by the respondent. Insofar as relationship between the parties, being Lesser and lessee is concerned, the learned ADJ found that the appellants had admitted that the respondent regularly received the agreed rent from the appellants during the subsistence of the agreement dated 22.12.1999 and even thereafter month by month up to November 2003. Though the appellants had denied, as being unaware about the ownership of the respondent in respect of the suit property, the learned ADJ mentioned that the appellant No. 1 in its letter dated 10.10.2000 addressed to the Assistant Secretary (Tax), NDMC Property Tax Department, had accepted that the suit property was taken on rent from its owner Smt. Sakunthala (i.e. the respondent). Insofar as determination of tenancy is concerned, the learned ADJ noted that the appellants had admitted having received the notice dated 12.11.2003 and 2.12.2003. The only contention was that these were in contravention of Clause 3(d) of the lease deed dated 22.12.1999. He adverted to the said clause, which related to the extension of lease, but found that since no fresh lease deed had been executed, there was no extension of lease.

5. These are the reasons, taking support whereof, the learned ADJ passed the decree for recovery of possession of the suit property and insofar as other relief of damages/mesne profits is concerned, he opined that the said issue can be decided after both the parties are allowed to lead evidence.

6. The appellants impugn the said judgment and decree dated 31.8.2004 in this appeal primarily on the ground that there were no categorical and unconditional 'admissions' in the pleadings or otherwise on the part of the appellants which could have entitled the respondent to obtain such decree at this stage and without recording evidence. According to the appellants, the learned trial court failed to consider or appreciate that in the written statement such factual pleas were raised which, if permitted to be proved, would dis-entitle any relief to the respondent and these contentions are ignored by the learned trial court. Leraned Counsel for the appellants argued that the following aspects, specifically raised in the written statement, are not taken care of:

(i) The plaintiff regularly received agreed rent beyond the initial term of 3 years, i.e. up to November 2003, while the initial term expired on 22.12.1999.

(ii) The defendant exercised the option of renewal beyond 22.12.2003 by letter dated 1.12.2003.

(iii) Under the lease deed the same could be terminated only by giving 3 months' notice and neither of the notice set up by the plaintiff gave the said mandatory 3 months' notice.

(iv) Though notice dated 12.11.2003 was received by the defendant, the same was superseded by another notice dated 2.12.2003.

(v) The plaintiff acquiesced in the extension of lease.

7. After hearing the counsel for both sides and on perusal of records, we are unable to agree with the aforesaid submission of leraned Counsel for the appellants. There is hardly any ground or plea raised by the appellants, which needed trial, or had any legal basis. Admitted facts are that lease deed dated 22.12.1999 was entered into between the respondent and the appellants. This lease with the respondent would itself indicate that the respondent is the landlady and there was a relationship of Lesser and lessee. The lease in question was covered by the terms stipulated in the lease as per which rent was Rs. 21,000/- p.m. Therefore, the tenancy was not protected under the Delhi Rent Control Act, 1958. Period of lease was three years, which expired on 21.12.2002. Admittedly, there was no fresh lease deed executed between the parties. In the light of these admitted facts, we proceed to discuss the aforesaid arguments raised by the appellants.

8. No doubt, even after the expiry of the lease on 21.12.2002, the respondent received rent up to November 2003. However, at the same time, no fresh lease deed was executed and registered. Merely because the appellants exercised the option of renewal of lease beyond 22.12.2003 vide letter dated 1.12.2003, would not give them the right to have the renewal of tenancy in the absence of a registered document. This legal position is no longer in doubt and has been reiterated time and again by judicial pronouncements. A Division Bench of this Court in Aggarwal and Modi Enterprises (Cinema Project) Pvt. Ltd. v. New Delhi Municipal Council 2005 VII AD (Delhi) 812, had occasion to take note of certain judgments on this subject. Our task is made easier by reproducing the said discussion, which would be equally applicable in the instant case, which reads as under:

31. All this leads to the conclusion that there was no agreement/contract between the parties giving any right to the appellants to seek `renewal' of lease. Legal support for this can be found in the judgments of following cases:

(i) Mrs.(Dr.) P.S. Bedi v. Project and Equipment Corporation of India Ltd.

(ii) Hitkarini Sabha v. Jabalpur Corporation

(iii) Syed Jaleel Zane v. P.Venkata Murlidhar

(iv) State of UP v. Lalji Tandon

(v) Naveen Chand v. Nagarjuna Travels and Hotels Pvt. Ltd.

32. It is not necessary to quote from all these judgments and our purpose would be served by pointing out that Lalji Tandon (supra) contains erudite exposition of statement of law on the subject. For the sake of brevity, instead of quoting from this and other judgments noted above, we may cull out the following principles:

(a) In India, a lease may be in perpetuity and the law, either the Transfer of Property Act or the general law abhors a lease in perpetuity. If there is a covenant for renewal in the lease agreement, lessee can exercise his right unilaterally for extension of lease, for which consent of Lesser is not necessary.

(b) 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.

(c) There is difference between an extension of lease in accordance with the covenant in that regard contained in the principal lease and renewal of lease. In the case of extension it is not necessary to have a fresh deed of lease executed. 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.

(d) Failing the execution of fresh deed of lease, another lease for a fixed terms 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.

(e) If the language in the lease deed is ambiguous, the court would opt for an interpretation negating the plea of the perpetual lease. Where there is a clause for renewal subject to the same terms and conditions, it would be construed as giving a right to renewal for the same period as the period of the original lease, but not a right to second or third renewal and so on unless, of course, the language is clear and unambiguous. While ascertaining the intention of the parties in this behalf, lease deed has to be read as a whole.

9. Thus, in the absence of any fresh lease deed executed between the parties and registered, the tenancy cannot be said to be renewed. It came to an end by efflux of time. However, after the tenancy period came to an end, since rent was accepted by the respondent for the period thereafter, it could be treated only as month to month tenancy determinable by 15 days notice under Section 106 of the Transfer of Property Act, 1882 (for short, 'the Act'). It is not correct to say that for termination of the tenancy three months' notice, as stipulated in the agreement/lease, was required to be given. Reason is simple. Lease had already come to an end by efflux of time. Beyond 22.12.2002, it was not determined by the terms contained in the said lease, but by virtue of Section 116 of the Act, as indicated above. In such a case, there is no question of acquiescence in extension of lease even if the rent was accepted. Furthermore, even if notice dated 2.12.2003 was given after 12.11.2003, nothing would turn on the same as the suit was filed on 22.12.2003.

10. It was also the contention of the appellants that notices dated 12.11.2003 and 2.12.2003 did not specify the provisions of Section 106 of the Act for the reasons that they did not terminate the month to month tenancy. This is clearly erroneous. In the notice dated 12.11.2003, the respondent had also pointed out unauthorised construction, alterations and modifications made by the appellants in the suit property. After mentioning all these, in the last para it was stated that the appellants should vacate the said premises and handover vacant possession thereof to the respondent forthwith and in any case not later than 15 days of the receipt of the said letter. The submission is that no such words are used in either of the said two notices terminating the tenancy. However, that would not invalidate the notices in view of the provisions of Section 106 of the Act, as amended, which read as under:

106. Duration of certain leases in absence of written contract or local usage.

(1) In the absence of a contract or local law or usage to the contrary, a lease of property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either Lesser or lessee, by six months' notice; 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 Lesser or lessee, b fifteen days' notice.

(2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in Sub-section (1) shall commence from the date of receipt of notice.

(3) A notice under Sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that Sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in t at Sub-section.

(4) Every notice under Sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.

11. This section clearly stipulates 15 days notice. This amendment, which has brought sea-change in the provisions of Section 106 of the Act drops the requirement of notice period ending with the tenancy month completely. What is to be seen is that the intention expressed in the said notice was clear and unequivocal, namely, calling upon the appellants to restore the premises, i.e. it was a quit notice with intention to evict the appellants. In Bhagabandas Agarwalla v. Bhagwandas Kanu and Ors. , the Apex Court has held that intention of notice to quit is to be seen and the contents thereof are not to be strictly construed. This principle has been followed repeatedly by the courts in umpteen number of cases. In fact, when the tenancy had come to an end by efflux of time, even such a notice of termination was not required.

12. In Shanti Prasad Devi and Anr. v. Shankar Mahto and Ors. , the Supreme Court had so held, as is clear from the following observations:

19. The Lesser in the present case had neither expressly nor impliedly agreed for renewal. 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. In the instant case, there is a renewal clause in the contract prescribing a particular period and mode of renewal which was an agreement to the contrary within the meaning of Section 116 of the Transfer of Property Act. In the face of specific Clauses (7) and (9) for seeking renewal there could be no implied renewal by holding over on mere acceptance of the rent offered by the lessee. In the instant case, option of renewal was exercised 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 Lesser 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 Section 116 of the Transfer of Property Act.

13. This dictum is followed by this Court also in number of cases. Suffice it would be to refer to UCO Bank v. Amar Nath Jindal 1998 (72) DLT 73. It may also be noticed that plea that by these notices tenancy was not terminated properly was not even raised in the trial court. The contention there was in terms of Clause 3(d) of the lease agreement that lease should be extended by another period of three years and, therefore, there was no reason to serve these notices. Finding that such a plea is devoid of merit, different objection is taken at appellate stage to invalidate the notices. In any case, even the objection is without substance.

14. In Parwati Bai v. Radhika , the Supreme Court held that when the receipt of notice has been admitted by the defendant and no objection as to its validity has been raised, then the objection would be deemed to have been waived. Further, such a plea is to be raised at the earlier possible stage and it cannot be permitted to be raised in the appeal.

15. The conclusion of the learned trial court, on the basis of which decree of possession is passed, is thus without any flaw. We, therefore, dismiss this appeal with costs.