Food Corporation of India, New Delhi v. K. C. Sharma
1986-02-21
B.N.SAPRU, K.P.SINGH
body1986
DigiLaw.ai
JUDGMENT B.N. Sapru, J. - The respondents, Dr. K.C. Sharma and his wife, Smt. Kanti Sharma, owned a piece of land at Hapur which is situated in Hapur Industrial Area. There were negotiations between the appellant, the Food Corporation of India (hereinafter to be referred to as `the Corporation') through its officers and the owners for the construction of a godown which was to be let out to the Corporation. These negotiations led to the owners constructing a godown which the Corporation agreed to take on a rent at the rate of Rs. 20/- per hundred square feet covered area per month. At this rate, the rent came to Rs. 4,083/- per month. The possession of the godown was taken by the Corporation on 18-8-1972. It had been stipulated in the correspondence between the parties that the Corporation would continue as a tenant for 5 years. It was also stipulated that a formal agreement would be executed incorporating the terms of the tenancy. In consequence thereof the owners sent a lease deed on a stamp paper for execution by the Corporation. This fact is established by the letter dated 13-2-1974 sent by the owners to the District Manager of the Corporation (paper No. 30C). In this letter a complaint was made that a lease deed on a stamp paper for execution by the Corporation had been sent by the owners but it had not been received by the owners after the execution by the Corporation. The Corporation continued in possession as a tenant till January, 1974, and paid rent. 2. On 25-1-1974 the Disrict Manager of the Corporation sent a letter No. E(10)(35)/Const. Kanti Devi Sharma & K. C. Sharma dated 25-1-1974 (paper No. 27C) stating that the Corporation did not any longer require the godown and it would be released with effect from 9-2-1974. It added that the owners were requested to take possession of the godown from the Depot In-charge of the Corporation on 9-2-1974 and went on to add that otherwise it would be released at the owners' risk and costs. It further stated that the Corporation would not pay any rent with effect from 9-2-1974. 3. In reply the owners sent a letter dated 8-2-1974 to the District Manager of the Corporation (paper No. 28C).
It further stated that the Corporation would not pay any rent with effect from 9-2-1974. 3. In reply the owners sent a letter dated 8-2-1974 to the District Manager of the Corporation (paper No. 28C). In this letter the owners stated that the godown had been taken on the basis of a guaranteed tenancy of 5 years which would expire on 17-8-1977. It stated that the proposed action of the Corporation in vacating the building earlier was a clear breach of the contract entered into between the Corporation and the owners. The owners added that they did not consider the godown to be released with effect from 9-2-1974. They further added that the Corporation was liable to pay the rent up to and inclusive of the rent payable for 17-8-1977. It was requested that the Corporation's letter dated 25-1-1974 be withdrawn. 3A. In reply the owners got a letter dated 13-2-1974 of the District Manager of the Corporation (Paper No. 29C) which stated that the record revealed that no lease deed had been executed between the Corporation and the owners as required by S. 107 of the T. P. Act and, therefore, the Corporation was not legally bound to continue as a tenant for 5 years. The Corporation's officers waited for the owners' representatives to come to the godown on 9-2-1974 but they did not turn up. Consequently, the Corporation's officers removed their lock from the godown and walked away. 4. There is no evidence that the owners occupied the godown and it appears that factually it remained vacant till it was requisitioned by the District Magistrate, Meerut, on 24-6-1976 (paper No. 33C) for the Corporation and the Corporation entered into possession on 3-7-1976 in pursuance of the requisition order. 5. The owners instituted the instant suit claiming rent from 1-2-1974 to 2-7-1976 as also interest at the rate of 9 per cent per annum on the agreed rent amounting to Rs. 19,285.74 as they had intimated the Corporation by letter that they would claim interest on the agreed rent. 6. The defence taken in the written statement by the Corporation was that the Corporation had taken the godown on rent but no formal deed of lease was executed on the proforma given to the owners for the execution of the lease deed and the owners took no steps in the matter.
6. The defence taken in the written statement by the Corporation was that the Corporation had taken the godown on rent but no formal deed of lease was executed on the proforma given to the owners for the execution of the lease deed and the owners took no steps in the matter. The rent was paid up to 31-1-1974 vide paragraph 10 of the written statement. In effect it was pleaded that there was no contract between the Corporation and the owners that the godown would be taken on tenancy for 5 years. In paragraph 15 of the written statement it was pleaded that the godown was taken possession on month to month basis. However, it was pleaded that the plaintiffs were entitled to rent from 1-2-1974 to 8-2-1974 at the rate of Rs. 4,083/- per month but the same could not be paid to the plaintiffs as the plaintiffs failed to submit their bills for the same. It was then added that the Corporation had sent a letter dated 25-1-1974 informing the plaintiffs that the godown would be vacated on 9-2-1974 and that on 9-2-1974 the officers of the Corporation waited for delivering possession to the plaintiffs but the plaintiffs did not turn up-and hence the Corporation vacated the godown. The Corporation, it is submitted, was not liable to pay any rent for the period commencing from 9-2-1974. In the additional written statement, in paragraph 4 it was pleaded that the tenancy was at will and could be terminated at any time. 7. Upon the pleadings of the parties, the trial Court framed the following issues : 1. Whether the disputed godown was taken on record (rent ?) by the defendant for 5 years occupancy guarantee ? If so, its effect ? 2. Whether the vacant possession was handed over by the defendant to the plaintiff on 9-2-74 ? 3. Whether the tenancy on 9-2-1974 stood terminated as alleged by the defendants ? 4. Whether the plaintiff is entitled to recover arrears of rent from 1-2-74 to 2-7-76 ? 5. Whether the plaintiff is entitled to recover interest ? If so, at what rate ? 6. Whether the Court has no jurisdiction as alleged in para 29 of the written statement ? 7. Whether the plaintiff is not entitled to recover rent or damages ? 8. To what relief, if any, is the plaintiff entitled ? 8.
5. Whether the plaintiff is entitled to recover interest ? If so, at what rate ? 6. Whether the Court has no jurisdiction as alleged in para 29 of the written statement ? 7. Whether the plaintiff is not entitled to recover rent or damages ? 8. To what relief, if any, is the plaintiff entitled ? 8. Under issue No. 1, the trial Court found that though the Corporation had agreed to take the godown on rent for 5 years but as no lease deed was executed, the agreement was invalid and the Corporation became a tenant from month to month. On issue No. 2 it was found that the Corporation had after informing the plaintiffs vacated the godown on 9-2-1974. Under issue No. 3 that trial Court found that the letter dated 25-1-1974 that the Corporation sent to the owners did not terminate the tenancy of the Corporation as it did not fulfil the requirement of S. 106 of the T. P. Act. The trial Court then took up issues Nos. 4 and 7 and found that the plaintiffs were entitled to claim rent from 1-2-1974 to 2-7-1976. Under issue No. 5 the trial Court found that the plaintiffs had sent a notice dated 28-2-1974 claiming interest on the rent due and as such the plaintiffs were entitled to claim interest at 9 per cent per annum which came to Rs. 19,285-74. On the question of jurisdiction, found that the suit was cognizable on the regular side in the Civil Court. As a result of its findings the trial Court decreed the suit in the sum of Rs. 1,37,964-94, Rs. 1,18,679-20 as rent for the period from 1-2-1974 to 2-7-1974 at the rate of Rs. 4,083/- per month and Rs. 19,285-74 as interest at the rate of 9 per cent per annum from 1-3-1974 to 16-2-1977. The plaintiffs were entitled to their costs. 9. Aggrieved the Corporation has filed the instant appeal. 10. Only two arguments have been advanced before this Court on behalf of the appellants. The first argument is that the tenancy was at will and could be terminated by the defendant appellants at any time without giving any notice to the plaintiffs. It is not disputed on behalf of the appellants that the letter dated 25-1-1974 did not comply with the provisions of S. 106 of the Act. 10A.
The first argument is that the tenancy was at will and could be terminated by the defendant appellants at any time without giving any notice to the plaintiffs. It is not disputed on behalf of the appellants that the letter dated 25-1-1974 did not comply with the provisions of S. 106 of the Act. 10A. It may be stated here that the counsel for the respondents did not dispute the fact that the tenancy for 5 years had not come into existence in view of the finding that no registered lease deed had been executed incorporating the terms of the tenancy. The learned counsel for the respondents has contended that the trial Court rightly found that the tenancy which came into being between the Corporation and the landlords was a tenancy from month to month. 11. In paragraph 15 of the written statement as originally filed it was specifically said that- "The Godown was taken in possession on month to month basis." 12. The rent that was admittedly being paid by the Corporation to the owners was Rs. 4,083/- per month. The rent had been worked out on the basis of the rental of Rs. 20/- per hundred square feet of the covered area. In this view of the matter the trial Court rightly determined the tenancy which came into being between the Corporation and the owners as being a monthly tenancy. 13. The next submission of the learned counsel for the appellants is that the tenancy was determined when the Corporation after its letter dated 25-1-1974 vacated the godown on 9-2-1974. The argument is that in view of the provisions of S. 111(g)(f) of the T. P. Act, the tenancy of the Corporation came to be determined by the implied surrender. The question, therefore, to be determined is whether the provisions of S. 111(g) of the T. P. Act are attracted at all to the proved facts in the present case. 14. In Black's Law Dictionary, Fifth Edition, at page 1295, amongst the meanings of word `Surrender' given is the following :- "Surrender is contractual act and occurs only through consent of both parties.
14. In Black's Law Dictionary, Fifth Edition, at page 1295, amongst the meanings of word `Surrender' given is the following :- "Surrender is contractual act and occurs only through consent of both parties. Surrender differs from "abandonment" as applied to leased premises, inasmuch as the latter is simply an act on the part of the lessee alone, but to show a surrender, a mutual agreement between the lessor and lessee that the lease is terminated must be clearly proved." 15. "Abandonment" is defined in the above mentioned Dictionary at page 2 as under : " "Abandonment" includes both the intention to abandon and the external act by which the intention is carried into effect. In determining whether one has abandoned his property or rights, the intention is the first and paramount object of inquiry, for there can be no abandonment without the intention to abandon. " "Abandonment" differs from surrender in that surrender requires an agreement, and from forfeiture, in that forfeiture may be against the intention of the party alleged to have forfeited." 16. While dealing with the determination of tenancy, in paragraph 375 at page 449 of Hill and Redman's Law of Landlord and Tenant, Sixteenth Edition, the following statement of the law was made : 375. Delivery of possession. A surrender by operation of law, or implied surrender occurs where one party does, and the other assents to, an act which is inconsistent with the continuance of the lease or tenancy. Delivery of possession by the tenant to the landlord and his acceptance of possession effect a surrender by operation of law. The surrender in this case depends upon the agreement by the landlord and tenant that an end shall be put to the term, and upon the change of possession in pursuance of such agreement. The change of possession is essential. A parol licence to quit will not of itself operate as a surrender; but where the tenant gives up possession in pursuance of the licence, and the landlord accepts it, the surrender by operation of law is complete. The surrender is effectual although the landlord accepts possession under a mistake induced by the tenant, provided that the tenant's conduct is not fraudulent. An implied surrender may be effectual under the Settled Land Act, 1925.
The surrender is effectual although the landlord accepts possession under a mistake induced by the tenant, provided that the tenant's conduct is not fraudulent. An implied surrender may be effectual under the Settled Land Act, 1925. There is a delivery of possession sufficient to effect a surrender when the tenant returns the keys of the premises, and the landlord accepts them with they intention of changing the possession. But the consent of the landlord to the delivery of the keys is essential, and it is not sufficient that they are delivered to his servant who does not return them. If there is no consent at the time, the surrender is not complete until the landlord takes possession in such a manner as to estop him from denying that the tenancy is at an end. He does not thus take possession by attempting to relet the premises, nor by entering to do necessary repairs, nor by making occasional use of a part of the premises. But if, after the tenant has quitted the premises, the landlord relets then to another tenant who goes into occupation, this will effect a surrender from the time of reletting, unless the landlord gives notice to the tenant that the reletting is on his account. 17. While dealing with the circumstances as to who may avail themselves of a forfeiture, Woodfall in his work on Landlord and Tenant, Volume I, Twenty Seventh Edition, in paragraph 1907 at page 884 has said the following : "A lessee cannot avail himself of his own act or default to vacate a lease on the principle that no man shall be permitted to take advantage of his own wrong." 18. In support of the said proposition, reliance is placed on Rede v. Farr, (1817) 6 M & S 121 : 105 ER 1188. 19. In that case, Lord Ellenborough, C. J., delivering his judgment stated as follows : "In this case, as to this proviso, it would be contrary to a universal principle of law, that a party shall never take advantage of his own wrong, if we were to hold that a lease, which in terms is a lease for twelve years, should be a lease determinable at the will and pleasure of the lesse; and that a lessee by not paying his rent should be at liberty to say that the lease is void.
On this principle, even if it were not borne out so strongly as it is current by the authorities, it would be sufficient to hold that the lease was only void as against the lessee, not against the lessor." 20. In this case, since the letter dated 25-1-1974 did not determine the lease and the lessors expressly told the lessee, namely the Food Corporation of India, that they would treat the tenancy as subsisting, the tenancy continued on a month to month basis and was never determined during the period of suit. The landlords were consequently entitled to rent. They were further entitled to interest an the agreed rent in view of the provisions of the Interest Act. 21. We accordingly find no merits in this appeal which is accordingly dismissed with costs.