M/S M.T.Z. Industries Ltd. & Anr. vs Mr. K.C. Khosla (Deceased) ...
2010 Latest Caselaw 3116 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                    Judgment Reserved on: 02.7.2010
                    Judgment Delivered on: 06.7.2010

+                         RSA No.93-94/2006


1.M/S M.T.Z. INDUSTRIES LTD.
2.MR.RAGHUSUDON                          ...........Appellants
               Through: Mr.A.K.Singla, Sr. Adv. with
                        Mr.J.K.Sharma, Advocate.

                    Versus


MR. K.C. KHOSLA (DECEASED)
Through LRs.
                                                  ..........Respondent
                    Through:     Mr.Abhijat with Ms. Princy Ponnan,
                                 Advocate.

CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

      1. Whether the Reporters of local papers may be allowed to
         see the judgment?

      2. To be referred to the Reporter or not?                    Yes

      3. Whether the judgment should be reported in the Digest?
                                                           Yes

INDERMEET KAUR, J.

1. These are two second appeals filed by the appellants under

Section 100 of the Code of Civil Procedure 1908. On 01.3.2007 the

following substantial question of law was formulated by this court

which reads as under:-

Whether the tenancy of the petitioner was validly terminated

by efflux of time or by the notice under Section 106 of the TP

Act?

2. Briefly stated the factual matrix of the case is as follows:-

(i) Sh. K.C. Khosla had filed a suit for possession and mesne

profits against defendant MTZ Industries Ltd. having its

registered office at Bombay. Plaintiff had expired during the

pendency of the suit. His legal heirs were brought on

record.

(ii) Vide registered lease deed dated 29.8.1989 (Ex.P-2) the

plaintiff had leased out property bearing No.-5/31,

Safdarjung Development Area to the defendant at a monthly

rental of Rs.4500/-. The lease was for a period of three years

commencing from July 1989 to June 1992.

(iii) In terms of the renewal clause contained in lease deed the

lessee had exercised his rights to renew the lease which

stood renewed up to 30.6.1995.

(iv) Legal notice dated 12.5.1995 (Ex.P-5) was served upon the

defendant by the plaintiff directing him to handover peaceful

possession of the suit property on or before 30.6.1995 failing

which he would be liable to pay mesne profit/damages @

Rs.2000/- per day.

(v) Defendant did not accede to this request and continued to

retain the possession of the suit property.

(vi) Present suit was accordingly filed.

3. Trial court vide judgment dated 31.5.2004 decreed the suit of

the plaintiff. Decree of possession and mesne profit was passed in

his favour with a further direction to hold an enquiry under Order

20 Rule 12 CPC to determine the future mesne profits/damages

payable by the defendant to the plaintiff.

4. The first appellate court vide its judgment dated 14.11.2005

endorsed the finding of the trial court. The appellate court had

relied upon the mandate of Section 106 of Transfer of Property Act

(hereinafter referred to as the T.P.Act) holding that vide Ex.P-5 the

tenancy of the defendant had been validly and legally terminated

by the plaintiff. The further finding of the trial court that the

tenancy had come to an end by efflux of time was also endorsed.

On both counts the plaintiff was entitled to a decree of possession.

5. Before this court counsel for the appellants has urged that

the orders of both the courts suffer from grave infirmity and a vital

question of law has arisen before this court in as much as the

tenancy of the plaintiff could have been terminated either by efflux

of time or in the alternate by serving a valid legal notice under

Section 106 of the T.P.Act and which submissions have not been

appreciated by both the fact finding courts below in the correct

perspective. It is submitted that admittedly a registered lease deed

had been entered into between the parties which is Ex.P-2 and the

term of the lease was for a period of three years commencing from

July 1989 to the end of June 1992. Thereafter admittedly no

written document was executed between the parties. The

appellant had thus become a tenant on a month to month basis.

The question of the lease having expired by efflux of time could not

and did not arise. Appellant continued to remain in legal and

lawful possession of the suit property as a monthly tenant.

Attention has been drawn to para no.2 and 3 of the notice Ex.P-5.

This notice Ex. P-5 was not a valid notice under Section 106 of the

T.P.Act and had in fact fulfilled the requirements of a notice to quit

under Section 111(h) of T.P.Act. It is submitted that the provisions

of Section 53(A) of the said Act are attracted and where as in this

case the appellant/tenant had in part performance of the contract

retained the possession of the property and had thereafter in

furtherance of the contract being paying rent regularly to the

landlord, the question of the eviction of the appellant in these

circumstances could not and did not arise; he is adequately

protected by the aforenoted statutory provision.

6. Arguments have been rebutted by the learned counsel for the

respondent. It is submitted that in either eventuality i.e. whether

the lease has been determined by efflux of time or whether the

lease had expired by termination of the tenancy under Section 106

of the T.P.Act, the appellant/tenant has become an unlawful

occupant and is liable to be evicted. The appellant is blowing hot

and cold at the same time. In one breath his submission is that the

tenancy expired in terms of the registered lease deed in June 1992

but was again renewed with the consent of the parties and

remained in operation till 30.6.1995 and in these circumstances

where the tenancy expires by efflux of time a notice to quit was not

necessary. In the next breath the appellant has submitted that the

appellant had become a tenant on a month to month basis after

June 1992 as no written document had been admittedly executed

between the parties thereafter. The appellant having thus become

a tenant on a month to month basis, he could only be evicted by a

valid legal notice complying with the requirements of Section 106

of the T.P.Act which Ex.P-5 has not adhered to. Counsel for the

respondent has submitted that these contrary and conflicting

submissions of the appellant has taken him nowhere; at the cost of

repetition in either eventuality; whether lease stood determined by

efflux of time or whether the appellant being a month to month

tenant, his lease stood determined by the valid legal notice Ex.P-5

which had fulfilled the twin requirements of this statutory provision

as has been endorsed by both the court below, he is liable to be

evicted. It is submitted that the respondent/landlord has after

30.6.1995 not accepted any rent from the appellant and the rent

cheques issued by him have not been encashed. Attention has

been drawn to para no.3 of the plaint filed before the Civil Judge as

also corresponding para in the written statement and the defence

set up by the defendant. It is submitted that the plaintiff has

categorically averred that the lease had stood determined by efflux

of time on 30.6.1995 but by way of abundant precaution a notice

had also been served upon the tenant asking him to vacate the suit

property. The defendant in the corresponding para of the written

statement has nowhere challenged the veracity of the said legal

notice; his only defence being that it was one Raghusudon who was

a tenant in the suit property; no defect or illegality has been

pointed out in Ex.P-5. Attention has also been drawn to the

grounds taken in the first appeal filed before learned District Judge

as also the grounds of appeal and the substantial question of law

formulated in the present appeal. It is submitted that the

argument of the appellant resorting to the provisions Section 53A

of the T.P.Act has been taken up in this appeal for the first time at

the time of oral arguments and does not find mention in any earlier

proceeding. Even otherwise no such protection is available to the

defendant. The provisions of Section 53A serves as a protection

to a tenant only for the purpose of holding that he cannot be

ranked as a trespasser and cannot be thrown out without due

process of law. No further advantage can accrue to such a tenant

who is at best even as per his own showing only a tenant at

sufferance.

7. Counsel for the respondent has placed reliance upon

98(2002) DLT 720 Rajiv Saluja Vs. M/s Bhartia Industries Limited

& Anr. wherein in similar circumstances where the tenancy stood

terminated by efflux of time but by way of abundant precaution the

plaintiff had also served a notice of termination under Section 106

of the T.P.Act which had admittedly resulted in the suit of the

plaintiff being decreed in his favour. Reliance has also been placed

on AIR 1972 SC 819 Bhawanji Lakhamshi & Ors. Vs. Himatlal

Jamnadas Dani & Ors. wherein a distinction has been drawn by the

Apex Court between the continuance in possession of a tenant after

the determination of the term with the consent of the landlord and

a tenant doing so without his consent; the former being described

as a tenant at sufferance and the latter a tenant holding over or a

tenant at will. It is submitted that the appellant/tenant has become

a tenant holding over/a tenant at will as the landlord had not

consented to his continuance in the suit property after the lease

period had expired. This is evident from the fact that the rent

cheques tendered by the tenant had not been encashed by the

landlord.

8. Reliance has also been placed upon 88(2000) DLT 186 Singer

India Ltd. Vs. Amita Gupta. In this case the provisions of Section

53A of T.P.Act had been expounded by the court in the context of

the determination of a lease where a similar defence as in the

instant case had been set up by the tenant seeking the protective

shield of the said statutory provision. In this case the parties had

entered into a registered lease deed dated 1.9.1985 for a period of

three years. In terms of the lease agreement after the expiry of

every three years by enhancing the rent by 15% appellant had a

right to renew the lease for another three years. In accordance

with the contract between the parties the lease between the

parties was further renewed by paying the enhanced rent of 15%

and in this way the period of tenancy stood extended up to

31.8.1994. On 17.8.1994 appellant requested the respondent to

renew the lease for another period of three years commencing

from 1.9.1994 and this enhanced rent continued to be paid by

tenant to the landlord who accepted the same. It was submitted

that by virtue of Section 53A of T.P.Act due to this part

performance of the contract, the term of tenancy of the tenancy

had got extended by another three years i.e. upto 31.8.1997. In

these circumstances the question which arose for determination by

the court was whether the notice dated 9.12.1994 under Section

106 of the T.P.Act served by the landlord upon the tenant was a

valid legal notice or the tenant had become a tenant in perpetuity

and was entitled to the protective shield of Section 53A of the

T.P.Act. In that case the tenant had also relied upon the provisions

of Section 49 of the Registration Act to support his submission that

a document even if is unregistered can be looked into for a

collateral purpose.

9. This submission was considered by the Division Bench of this

Court who repelled the same. The ratio of the aforenoted judgment

squarely applies to the instant case. The protection sought by the

tenant under Section 53A of the T.P.Act is only to the extent that

he can justify his possession i.e he is not a trespasser; this salutary

provision will not enable the tenant to press into service the terms

of a document which is unregistered though required by law to be

registered. This would be illegal in terms of the harmonious

construction to be accorded to the provisions of Section 53A and

107 of the T.P.Act.

10. Applying the ratio of the aforenoted judgment, it is thus clear

that after June 1992 i.e. from 1.7.1992 the appellant had become a

tenant on a month to month basis as the subsequent renewal from

July 1992 up to 30th June 1995 was not by way of a registered

instrument and in violation and hit by Section 107 of the T.P. Act as

also Section 49 of the Indian Registration Act. The appellant after

1.7.1992 had become a tenant on a month to month basis.

11. It is a well settled proportion of law that absence of a

registered lease the tenancy at best can be regarded as from

month to month. The appellant having become a tenant on a

month to month basis after 1.7.1992, the only manner in which he

could be evicted from the suit property was by serving upon him a

valid legal notice under Section 106 of the T.P.Act. Ex.P-5 dated

12.5.1995 has, thus, to be construed in this background; does it

fulfill the twin requirements of a valid legal notice as required

under Section 106 of the Transfer of Property Act? Does Ex.P5

give a minimum 15 days time to the tenant to vacate the lease hold

premises and did the period expire with the end of the tenancy

month?

12. Ex.P-5 has been scrutinized. Para nos.2 and 3 of the said

document interalia reads as follows:-

"2.That a duly registered lease deed dated 29.8.1989 was executed in this regard. The lease was renewed for further period of three years from 1st July, 1992 to 30th June, 1995. The said period of three years is expiring on the 30 June, 1995 and as such you are liable to vacate the premises with the expiry of 30th June, 1995.

3.That although the lease period would expire with the efflux of time on the 30th June, 1995, I by means of this notice by way of abundant caution terminate your tenancy with the expiry of 30th June, 1995. In case you consider the last day of your tenancy month to be different, than your lease shall stand terminated with the expiry of the said last day of the tenancy month which shall fall one month hence after the receipt of this notice.

You are called upon to vacate the premises accordingly."

13. The intention of the landlord to determine the lease is clear

and unambiguous from a plain reading of this document. It clearly

states that the tenancy of the tenant is terminated with the expiry

of 30.6.1995 and in case the last day of the tenancy month is to be

treated differently the lease shall stand terminated with the expiry

of the said last day of the tenancy month which shall be within one

month after the receipt of this notice. A clear period of 15 days to

vacate the property has been categorically stated in Ex.P-5. This

notice had been addressed by the advocate of the landlord to the

tenant company at both its addresses i.e. at Bombay and New

Delhi. As already aforenoted there is no challenge by the defendant

in his written statement to the legal requirements of such a notice;

no defect or lacuna has been pointed out. The only plea taken by

the defendant was that the notice was served upon Raghusudon

and not upon the company. This has been negatived by both the

fact finding courts below and has been amply proved by the

evidence. The registered A.D. Card received back raises the

presumption of service of the notice upon the defendant. Non-

service of such notice has also not been pleaded before this court.

14. In AIR 1977 SC 1120 Bhagabandas Agarwalla Vs.

Bhagwandas Kanu & Ors. It has been held by Supreme Court that

a notice to quit ought not to be construed in a hypertechnical

manner nor must its interpretation be affected by pedagogic

pendantism or over refined subtlety but in a common sense way.

No particular form is necessary for a notice under Section 106 of

the T.P.Act. The notice must, on its plain reading, bring out the

intention of the lessor to terminate the lease and this intention

must be unambiguous. This is amply borne out from a reading of

para no.2 and 3 of Ex.P-5. The rebuttal arguments of the learned

counsel for the appellant that ordinary rules of construction should

be applied in interpreting an instrument is an undisputed

proposition; by applying this ordinary rule of construction to the

document Ex.P-5 the intention of the lessor to terminate the

tenancy of the lessee on the expiry of the period on 30.6.1995

giving him a clear 15 day period to vacate the property is clear,

categorical and apparent on the face of the instrument.

15. In 47(1992) DLT 317 (DB) State Bank of India Vs. Ashok

Kumar Gupta & Anr. , a judgment relied upon by learned counsel

for the appellant on the construction of Ex.P-5 the court had

observed that the notice under Section 106 of the T.P.Act must be

read in the context of the each particular case having regard to the

situation of the parties to whom it was addressed. The oft quoted

observation of the Judicial Committee in AIR 1918 P.C. 102 Harihar

Banerji Vs. Ramsashi Roy case is noteworthy in this context;

"..... that notices to quit, though not strictly accurate or consistent in the statements embodied in them, may still be good and effective in law; that the test of their sufficiency is not what they would men to stranger ignorant of all the facts and circumstances touching the holding to which they purport to refer, but what they would mean to tenants, presumably conversant with all these facts and circumstances; and, further that they are to be construed, not with a desire to find faults in them which would render them defective, but to be construed ut res magis valeat quam pereat."

16. In the context of the aforenoted facts of the present case

as also the provisions of law, this court is left with little choice

but to uphold the finding of both the courts below. The

appellant has become a tenant on a month to month basis after

30.6.1992; his tenancy was validly and legally terminated by

the notice Ex.P-5 dated 12.5.1995 under Section 106 of the

Transfer of Property Act.

17. The substantial question of law is answered accordingly.

Appeals are without any merit. They are dismissed.

INDERMEET KAUR, J.

JULY 06, 2010 nandan