Judgement Law. Rep. 67 Ind. App. 25 ( 1939- 1940) A. Ranganatham C hetti V. M. Ethirajulu Nayudu 151 Appeal (No. 61 of 1938) from a judgment and decree of the High Court in its civil appellate jurisdiction (March 31, 1937) affirming a judgment and decree of the same Court in its ordinary original civil jurisdiction (October 8, 1936). On October 18, 1912, the appellants father, one Nathamuni, obtained a lease of a plot of land in the City of Madras from the respondent, M. Ethirajulu Nayudu, and his undivided brother, for a period of ten years from October 1, 1912, to September 30, 1922, at a monthly rental of Rs.50. The tenant was to be at liberty to erect a superstructure on the land. In 1914 Nathamuni improved an existing superstructure, and built a theatre. In 1920, during the currency of the lease, and the respondent having become the sole owner of the land, there were negotiations which resulted in an agreement by the respondent to give a fresh lease at Rs.100 a month. On the strength of that agreement Nathamuni demolished the existing building and erected in its place a substantial building on the land. A formal lease was executed on February 1, 1923, under which the plot of land was leased to the appellants father for a term of ten years from October 1, 1922. Nathamuni died in 1930, and his sons, the appellants, continued in possession of the land. On October 9, 1932, the respondent sent a notice to the first appellant stating that the lease had expired on September 30, 1932, and that he required possession of the property and was willing to pay Rs.3000 for the value of the buildings. On November 7, 1932, the first appellant, acting for the family of the appellants, replied, stating that the Madras City Tenants Protection Act, 1922, governed the relationship of the parties, that he would have to have recourse to the provisions of the Act for the acquisition of the land unless the respondent agreed to sell it by private treaty, and that the compensation offered was grossly inadequate. On January 25, 1933, the respondent brought the suit out of which the present appeal arose. On January 25, 1933, the respondent brought the suit out of which the present appeal arose. He prayed for a decree for possession of the land and the building thereon, and a declara tion as to the amount payable to the appellants as the market value of the superstructure. He further claimed mesne profits. The facts, and the relevant provisions of the Madras City Tenants Protection Act, 1922, appear from the judgment of the Judicial Committee. The trial judge (Wadsworth J.) held that the Act ceased to apply on the execution of the lease dated February 1, 1923, because that lease had the effect of surrender by the appellants of their rights under the first lease, and the creation of a new tenancy. In his opinion, therefore, the appellants were not entitled to the benefit of the Act. On appeal by the appellants to the appellate jurisdiction (Beasley C.J. and Cornish J.) it was held that inasmuch as the tenancy in question was created on February 1, 1923, to take effect from October 1, 1922, both dates being after the commencement of the Act of 1922, the Act, in view of the terms of s.1, sub-s. 3, thereof, did not apply, and the appellants were not therefore entitled to the benefit of the Act. 1939. Oct. 17. C. S. Rewcastle K.C. and Subba Row for the appellants. The Madras City Tenants Protection Act, 1922, applies to this case, and the appellants as tenants under that Act are entitled to be protected from eviction. That being so, the appellants as tenants, who were entitled either to compensation under s. 3 for the improvements carried out, or, alternatively, were entitled under s. 9 of the Act to the right to purchase at a price to be fixed by the Court, could do nothing until the landlord acted. That is, the first step had to come from the respondent, and until he had involved himself in a suit for ejectment the right that the appellants had to purchase was in abeyance, but in existence. The Law. Rep. 67 Ind. App. 25 ( 1939- 1940) A. Ranganatham C hetti V. M. Ethirajulu Nayudu 152 second lease is nothing more or less than the putting into shape of the verbal agreement which had been entered into before the expiration of the first deed and before the operation of the second lease. The Law. Rep. 67 Ind. App. 25 ( 1939- 1940) A. Ranganatham C hetti V. M. Ethirajulu Nayudu 152 second lease is nothing more or less than the putting into shape of the verbal agreement which had been entered into before the expiration of the first deed and before the operation of the second lease. That second lease was nothing more than a formal crystallization of that agreement. If that be right, and that is the true situation, the appellants are not ordinary persons merely holding over after the expiration of the first tenancy; they are persons who are in occupation of the landlords land upon terms which had been previously agreed with him, and which had been postponed in their crystallization into legal effect until 1923. The appellants having been statutory tenants by reason of their tenancy having originated before the coming into operation of the Act of 1922, they continued to be subject to the Act, and the mere execution by them of the lease of February 1, 1923, providing for the renewal of the tenancy at an increased rent for a further ten years, did not, and could not, have the effect of freeing the tenancy from the control of the Act, and of depriving the tenants of their rights under it. As soon as the first lease came to an end they had these rights, but owing to the provisions of the Act they could not enforce them— that is, they could neither get their compensation nor exercise their option to purchase until the landlord brought an action in ejectment. It is not suggested that the appellants are entitled to the benefits of the Act under the second tenancy, but that under the first they are, and that the right by which they claim to acquire this land became vested in them at the end of the first tenancy. Lastly, assuming that, when the first tenancy came to an end and nothing further had been done, they were entitled to the rights under this Act, then s. 12 provides that "Nothing in any contract made by a tenant shall take away or limit his rights under this Act....” and therefore, if it be right, subject to the question of ejectment, that the appellants had rights, no contract could take them away. There appears to be no reason for reading any contract" as meaning a contract made before or after the passing of the Act. Subba Row followed, and referred to Thayarammal v. Junus Chettiar.(( 1936) A. I. R, (Mad.) 844, 846-7.) W. W. K. Page for the respondent was not called upon to argue. 1939. Oct. 31. The judgment of their Lordships was delivered by LORD THANKERTON. This is an appeal from a judgment and decree of the High Court of Judicature at Madras, in its civil appellate jurisdiction, dated March 31, 1937, which affirmed a judgment and decree of that Court, in its ordinary original civil jurisdiction, dated October 8, 1936. In the suit, which was filed on January 25, 1933, the respondent, as plaintiff, seeks delivery of possession by the appellants of a plot of land in Muthiappan Street, Georgetown, Madras, and the superstructure thereon, mesne profits, and a declaration as to the amount payable to the appellants as the market value of the superstructure, in terms of a lease by the respondent to the appellants father and predecessor in title for a term of ten years, which expired on September 30, 1932, The only question in the appeal is whether the appellants claim that the Madras City Tenants Protection Act, 1921 (Act III. of 1922), is applicable in the present case is well-founded. Both Courts below have rejected this contention. The respondent and his undivided brother, by lease dated October 18, 1912, leased the plot of land in suit to the appellants father for a period of ten years from October 1, 1912, the tenant being at liberty to erect a superstructure on the land. In fact there was already a superstructure thereon, erected by the previous lessee, from whom the appellants’ father had bought it shortly before obtaining his own lease. The appellants father improved the superstructure during his tenancy, and shortly before its expiry on September 30, 1922, there were negotiations which resulted in an agreement by the Law. Rep. 67 Ind. App. 25 ( 1939- 1940) A. Ranganatham C hetti V. M. Ethirajulu Nayudu 153 respondent, who had become sole owner under a partition with his brother in 1917, to give a fresh lease at an increased rent, in order that further building operations should go on. Rep. 67 Ind. App. 25 ( 1939- 1940) A. Ranganatham C hetti V. M. Ethirajulu Nayudu 153 respondent, who had become sole owner under a partition with his brother in 1917, to give a fresh lease at an increased rent, in order that further building operations should go on. On February 1, 1923, the formal lease was executed, under which the plot of land was leased to the appellants father for a term of ten years from October 1, 1922, at an increased rent of Rs.100 per month, on the following recital "Whereas sometime prior to the expiry of the said lease the lessor agreed to grant the lessee a new lease of the said plot of land for a period of ten years commencing from the 1st October, 1922, upon terms and conditions hereinafter appearing, and whereas the lessee has built on the said plot of land a substantial superstructure on the strength of the said agreement." It was provided that the lessee should always and in any event be entitled to be paid the price of the superstructure built on the said plot of land before he surrendered possession of the land, either on the expiry of the lease thereby granted or any other future lease, or at any time, and that the price should be fixed according to the market value of the buildings as at the time of ascertainment and payment. It appears that, on the strength of this agreement, the appellants father had demolished the existing building and erected a substantial structure. The appellants father died in 1930, and the appellants became the tenants under the lease, which expired according to its terms on September 30, 1932. On October 9, 1932, the respondent sent a notice to the appellants claiming surrender of possession, and offering the present value of the superstructure as it existed at the commencement of the lease, which was put by him at Rs.3000. On November 7, the appellants replied, claiming the benefit of the Madras City Tenants Protection Act, and disputing the valuation and the claim, and the present suit was thereafter filed by the respondent. It may be mentioned that the trial judge held, against the respondent, that under the lease the respondent was bound to pay the value of the superstructure as it existed at the expiry of the lease, and that the respondent accepted that decision. It may be mentioned that the trial judge held, against the respondent, that under the lease the respondent was bound to pay the value of the superstructure as it existed at the expiry of the lease, and that the respondent accepted that decision. The Madras City Tenants Protection Act came into force on February 21, 1922, and by s. 1, sub-s. 3, it is provided that the Act shall apply only to tenancies created before the commencement of the Act. Under s 2, sub-s.4, "Tenant" is defined as meaning a tenant of land liable to pay rent on it, every other person deriving title from him, and includes persons who continue in possession after the termination of the tenancy. The leading provision of the Act is to be found in s.3, which provides “3. Every tenant shall on ejectment be entitled to be paid as compensation the value of any building, which may have been erected by him, by any of his predecessors in interest, or by any person not in occupation at the time of the ejectment who derived title from either of them, and for which compensation has not already been paid. A tenant who is entitled to compensation for the value of any building shall also be paid the value of trees which may have been planted by him on the land." Under s.9, sub-s.1, a tenant who is entitled to compensation under s.3, and against whom a suit in ejectment has been instituted, may apply to the Court for an order that the landlord shall be directed to sell the land for a price to be fixed by the Court. The appellants made an application under this section. By s. 12 it is provided that nothing in any contract made by a tenant shall take away or limit his rights under this Act, provided that nothing contained in the Act should affect any stipulations made by the tenant in writing registered as to the erection of buildings, in so far as they related to buildings erected after the date of the contract. Their Lordships are of opinion that the latter part of the definition of "tenant" in s. 2, sub-s. 4, refers to persons who without a tenancy title continue in possession after the termination of the tenancy, and that the benefit of the remaining sections, including s. 12, on which the appellants sought to rely, cannot Law. Rep. 67 Ind. App. 25 ( 1939- 1940) A. Ranganatham C hetti V. M. Ethirajulu Nayudu 154 be of avail to the appellants unless and until they have shown that the tenancy here in question was created before the commencement of the Act within the meaning of s. 1, sub-s. 3. The appellants maintain that the tenancy which terminated on September 30, 1932, was created by the lease of 1912, the lease of 1923 being merely a continuation of the earlier lease, and they refer to the verbal agreement made before the expiry of the 1912 lease in support of this argument. But their Lordships are clearly of opinion that, though the physical possession was continuous, the possession from October 1, 1922, was attributable to a new tenancy, which was formally embodied in the lease dated February 1, 1923, the increased rent thereby provided having been paid by them from October 1, 1922, in terms of the verbal agreement for a lease. Their Lordships, accordingly, concur in the view of both the Courts below, that the tenancy here in question was not created before the commencement of the Act, and that the Act does not apply. Their Lordships will humbly advise His Majesty that the appeal should be dismissed, with costs, and that the judgments appealed from should be affirmed.