M.U. Isaac, J. -
(1.) THIS is a defendant's appeal under Section 5 of the Kerala High Court Act, 1959 from the judgment of our learned brother, Raghavan J., in S.A. No. 1242 of 1965; and it arises out of a suit for eviction of the defendant from a shop building held by him under a lease deed Ext. D -1 dated 28 -9 -1961, and also for arrears of rent and future rent. Ext. D -1 was executed by the defendant in favour of the first plaintiff; and the rights of the first plaintiff subsequently devolved on the third plaintiff. The lease was for a period of one year on monthly rent of Rs. 17.50, payable before the 30th of every month. The defendant also paid a premium or advance of Rs. 200/ - in consideration of the lease. The period of the lease expired on 28 -9 -1962; but the defendant remained in possession of the shop building after the expiry of the said period, and paid rent as provided in Ext. D -1, till the end of September 1963. Thereafter he defaulted payment of rent. The defendant was, therefore, called upon several times to surrender the building and pay the arrears of rent; but he did not do so in spite of notices sent to him. Ext. D -4 dated 4 -2 -1964 and Ext. D -3 dated 5 -5 -1964 are two notices issued to the defendant on behalf of the landlord. Both Exts. D -4 and D -3 required the defendant to surrender the building within 15 days of the date of the said notices. The defendant did not comply with the demand; and therefore this suit was instituted. The defendant contended among other things that the suit was not maintainable, as the tenancy of the building had not been validly terminated. This contention was apparently based on the provisions contained in Section 106 and 116 of the Transfer of Property Act, 1882. Section 106, the first part of which alone is relevant, reads as follows: -
106. 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 leave 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 the tenancy.
Section 116 deals with the effect of holding over of the property after the determination of the lease; and it reads: -
116. If a lease or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106.
(2.) THE defendant contended that, as he was holding over the property after the expiry of the period of one year for which the lease was given, and as the landlord had admittedly received rent thereafter for another one year, the lease had been renewed by virtue of Section 116 of the Act, and that it would not be determined except by a notice as required by Section 106 of the Act. There is no dispute that neither Ext. D -3 nor Ext. D -4 would satisfy the requirements of Section 106. But the plaintiffs contended that Ext. D -1 contained a contract to the effect that an yearly or monthly tenancy as provided in Section 116 would not be created after the expiry of the original period of the lease, and that a notice as required by Section 106 was not necessary to determine the lease. The plaintiffs relied on the following provision in Ext. D -1 : -
The trial court accepted the plaintiff's contention, and decreed the suit. This contention was also accepted by the Subordinate Judge, before whom the defendant filed an appeal. He, therefore filed Second Appeal in this Court. The learned Single Judge held that the above provision did not amount to a contract dispensing with the requirements of a notice as provided in Section 106; but he also held that Section 116 did not apply to a lease, which was for a fixed period, and that in such a case the question of determination of lease by a notice as required by Section 106 did not arise. In the result, he confirmed the decree, though for entirely different reasons. The defendant, therefore, filed the present appeal.
Our learned brother relied on a decision of the Supreme Court in Puran Chanda v. Motilal : A.I.R. 1964 S.C. 461 in support of his view that Sections 106 and 116 of the Transfer of Property Act did not apply in the case of a lessee remaining in possession of the property after the expiry of the period of the lease and paying rent to the landlord. It may, however, be mentioned that an opposite view was expressed by the learned Judge in Moothorakutty v. Ayissa Bi & Others : 1963 K.L.J. 556. In that case he said : -
Ext. A was of the year 1941 with a term of six years which expired in 1947. Thereafter till the filing of the suit in 1949, the tenant was holding over; and to such a tenancy, Section 116 of the Transfer of Property Act must apply.
It does not appear that this decision was brought to the notice of the learned Judge. The learned counsel for the plaintiffs contended that in the light of the above decision of the Supreme Court, the decision of this Court in Moothorakutty's case was wrong. This contention requires a careful examination. The case before the Supreme Court arose out of a suit for eviction of a tenant of a building. The lease was for a period of one year commencing on 1st August 1952, on a monthly rent of Rs. 70/ -. On 27 -6 -1954, the landlord issued notice to the tenant calling upon him to vacate the building by mid -night of 31st July 1954 - 1st August 1954. On 2 -8 -1954, the landlord instituted the suit for eviction. One of the contentions in the suit - and this was urged before the Supreme Court also - was that the notice was not valid in determining the tenancy, as it was short by 24 hours. In dealing with the above contention, the Supreme Court said: -
It is not necessary in this appeal to express our opinion on the validity of the contention for we are satisfied that the term of the tenancy had expired by efflux of time; and, therefore, no question of statutory notice would arise.
It is the above passage that has been quoted by our learned brother in support of his decision under appeal. There is no finding in the Supreme Court case that, after the expiry of the period of one year for which the lease was created, the tenant was holding over, and a tenancy under Section 116 of the Transfer of property Act had been created. We cannot assume that it was an omission. It must be a case where Section 116 had no application; and if so, the tenancy had expired by efflux of time, and no question of notice arose, as held by the Supreme Court. This decision does not, therefore, support our learned brother's view that Sections 106 and 116 of the Transfer of Property Act have no application to the case of a tenant holding over after the expiry of the period of the lease.
(3.) THE above question arose pointedly for decision before the Federal Court in Rai Khushroo v. Bai Jerbai, A.I.R. 1949 S.C. 124. That case arose out of a suit for eviction of a lessee of a building. The period of lease expired on 31 -8 -1942; and the landlord had issued notices to the lessee, requiring him and the sub -lessees to vacate the building on the expiry of the period. But they did not surrender the building. They continued to pay the rent and the landlord continued to accept the same, till the suit was instituted on 7 -12 -1945. It was contended among other things that the suit was not maintainable for want of a proper notice as required by Section 106 of the Transfer of Property Act, as the tenants were holding over the property under Section 116 of the Act. Dealing with this matter, the Federal Court said: -
On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised premises to the lessor. If the lessee or a sub -lessee under him continues in possession even after the determination of the lease, the landlord undoubtedly has the right to reject him forthwith ;but if he does not, and there is neither assent nor dissent on his part to the continuance of occupation of such person, the latter becomes in the language of English law a tenant on sufferance who has no lawful title to the land but holds it merely through the laches of landlord. If now the landlord accepts rent from such person or otherwise expresses assent to continuance of his possession, a new tenancy comes into existence as is a contemplated by S. 116, T.P. Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month in accordance with the provisions of S. 106 of the Act.
The court also added : -
What S. 116, T.P. Act contemplates is that on one side there should be an offer of taking a renewed or fresh demise evidenced by the lessee's or sub -lessee's continuing in occupation of the property after his interest has ceased and on the other side there must be a definite assent to this continuance of possession by the landlord expressed by acceptance of rent or otherwise.
This decision is clear authority for the position that, in the absence of an agreement to the contrary, Section 116 of the Act would apply to a lessee continuing in possession of the property after the expiry of the period of the lease, and that in such a case, a notice satisfying the requirements of Section 106 is necessary to determine the lease.;