United Bank of India v. Tinsukia Development Corporation Ltd.
1996-09-27
D.N.BARUAH, N.SURJAMANI SINGH
body1996
DigiLaw.ai
This is the defendant's appeal from the judgment and decree dated 24th May, 1991 and 4th June, 1991 respectively passed by the learned Assistant District Judge, Tinsukia, in TS No. 17 of 1987, decreeing the suit of the plaintiff, respondent herein. 2. The facts of the case in a short compass are as follows : The plaintiff, respondent herein instituted a suit in the Court of the Assistant District Judge, at Tinsukia under Title Suit No. 17 of 1987 as against the defendant-appellant herein for ejectment from the suit premises and khas possession thereof and also for recovery of a sum of Rs.42,907.00 as arrears of rent dues from the defendant and mesne profit thereof by contending, inter alia, that the plaintiff is a company incorporated under the Indian Companies Act having its registered office at Tinsukia, PO Senairam Bazar and carrying on business thereat and the defendant is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and carrying on business of banking having branch office in various places in India, including one at Tinsukia, and the defendant being a defaulter in the eye of law is liable to be evicted from the said suit premises. According to the plaintiff, the respondents herein; out of a settlement, rather in pursuance of a decree passed in Title Suit No.3 of 1973 of the Court of the Assistant District Judge at Dibrugarh, the suit premises described in the schedule to the plaint were demised to the defendant-appellant for the purpose of operating its branch office at Tinsukia for a period of 10 years commencing from 15th April, 1974 under a lease deed dated 21st December, 1974. Subsequently, a security guard room has been provided on the roof of the said suit premises measuring approximately an area of 750 square feet under the agreement and consent of the parties for the business purpose of the defendant-appellant. As per the said agreement of lease, the defendant-appellant was to pay monthly rent @Rs.0.60 per square feet and the monthly service charges @ Rs.0.20 per square feet thus in total Rs.0.80 per square feet for the said suit premises on or before the 10th day of each succeeding English Calender month, on otherwords, the defendant was to pay a sum of Rs.5886.60 as monthly rent and Rs.
1962.20 as monthly service charges agreegating in total to Rs.7848.80 paise per month. Under the said lease deed it was further covenanted that after six months from the date of the commencing of the tenancy thereby created if there be an escalation of municipal rates and and taxes and Urban Immovable properties taxes and/or other Government or Semi Government impositions the defendant-appellant would pay the same subject to proportionate increase up to a maximum of 15% of the rent and service charges as herein above recited. According to the plaintiff-respondent, in spite of repeated requests and demands the defendant-appellant utterly defaulted in carrying out its obligation according to the said covenant in the lease. It is also the case of the plaintiff-respondent that the terms of the said lease expired on the 14th day of April, 1984 and that the defendant-appellant herein also failed to renew the said lease, rather the defendant has not paid, tendered or deposited monthly rent and other service charges since the 1 st day of April, 1984 and, as such, the defendant is a defaulter in the eye of law and is liable to be evicted under the provisions of the Assam Urban Areas Rent Control Act, 1972. The plaintiff went on to contend that on 13th day of August, 1984 a notice has been sent through Messers Steel and Hadow, Solicitors and Advocates, Dibrugarh for the defendant to quit and vacate the suit premises immediately after the 14th day of September, 1984 by registered post and the same was duly delivered to the defendant. Hence, the suit of the plaintiff-respondent. 3. The defendant, the present appellant herein contested the suit by filing written statement and contending, inter alia that the suit is not maintainable in law and form; there is no cause of action for the suit; the suit is barred under the provisions of Assam Urban Areas Rent Control Act, 1972. The main plea of the defendant-appellant herein is that the said lease deed does not stipulate any time or date within which the defendant should apply to the plaintiff for the renewal of lease and since the defendant is in possession of the suit premises and is paying rent and the rents are being accepted by the plaintiff-respondent herein, the lease has been continuing and the same shall be deemed to have been renewed.
According to the defendant, the decretal dues to the defendant has been finally adjusted in the month of December, 1986 and, as such, the plaintiff was quite aware of the payment of rent adjusted by the defendant towards the decretal dues arising out of the compromise decree passed in Title Suit No.3 of 1973 of the Court of the Assistant District Judge, Dibrugarh as stated above. Therefore, there was no default in payment of rent by the defendant to the plaintiff. Rather the lease deed provides for renewal of the lease at the option of the defendant and that the same does not prescribed any mode or period within which the lease is to be renewed and since the plaintiff has been accepting the rent without any demur or protest and the defendant is in possession of the suit premises, the lease is still continuing hence the lease is automatically renewed, the defendant contended. According to the defendant, such disputes should be referred to the Arbitrators, one to be appointed by the plaintiff and the defendant of the umpire and the decision of the Arbitrators in regard to the said dispute should be binding on the parties and, as such, the suit is not maintainable. The defendant-appellant herein went on to state that after the decretal amount of Rs. 10,50,000/- was adjusted, the defendant having regularly deposited the rent by crediting the account of the plaintiff in the first week each and every month, there can be no question of defendant becoming defaulter of the rent and, as such, the prayer for ejectment of the defendant and for klias possession of the premises are not tenable in the eye of law. 4. On the basis of the pleadings of both the parties, the learned trial Court, namely, the Assistant District Judge at Tinsukia framed as many as 9 issues including an additional issue for just determination of the real points in controversies between the parties of the case. The said issues are quoted below: 1. Whether the suit is maintainable in law and in- present form ? 2. Whether there is any cause of action for the suit ? 3. Whether the suit is barred under the provisions of Assam Urban Areas Rent Control Act, 1972 ? 4. Whether the ten years terms of lease was subject to renewal at the option of the defendant ? 5.
2. Whether there is any cause of action for the suit ? 3. Whether the suit is barred under the provisions of Assam Urban Areas Rent Control Act, 1972 ? 4. Whether the ten years terms of lease was subject to renewal at the option of the defendant ? 5. Whether the defendant committed default in payment of rent ? 6. Whether the lease is deemed to have been renewed after expiry often years term ? 7. Whether the plaintiff is entitled to the decree as prayed for ? 8. To what relief, if any, the parties are entitled ? Additional issues: 9. Whether this Court has jurisdiction to try this suit in view of Arbitration clause in the lease agreement as alleged by the defendant ?" 5. In support of the case of the plaintiff, the plaintiff also led evidence and examined one witness, namely, Pradip Purkayastha as PW 1 and also produced certain relevant documents and whereas the defendant-appellant herein also adduced evidence and examined two witnesses as DW 1 and DW2 in support of its case. 6. After hearing the parties, the learned trial Court, namely, the Assistant District Judge, Tinsukia decreed the suit of the plaintiff-respondent entitling the plaintiff for khas possession of the suit premises and for ejectment of the defendant-appellant herein therefrom, and for recovery of Rs.42,907/- as arrear rent from the defendant, for compensation of Rs.2,69,100.00 from the defendant @ Rs.300/- per day from 15th September, 1984 till 21st February, 1987 and for future compensation at the same rate as claimed in the plaint on payment of requisite court fee for the same. 7. Being aggrieved by the impugned judgment and decree passed by the learned Assistant District Judge, Tinsukia in Title Suit No. 17 of 1987, the defendant-appellant preferred this appeal. 8. The learned counsel for the appellant at the very outset submitted that the appellant-defendant is/was not a defaulter at all inasmuch as under the terms and conditions of the compromised decree in Title Suit No.3 of 1973 as well as in the lease deed, the decretal amount with interest was liquidated only in December, 1986.
8. The learned counsel for the appellant at the very outset submitted that the appellant-defendant is/was not a defaulter at all inasmuch as under the terms and conditions of the compromised decree in Title Suit No.3 of 1973 as well as in the lease deed, the decretal amount with interest was liquidated only in December, 1986. Rather the question of the defendant being defaulter for the period from 1.4.1984 to 14.9.84 shall not arise at all, but the learned trial Court without considering the questions in its proper perspective, came to the vague conclusion that the defendant was a defaulter, therefore, the impugned judgment and decree deserves to be set aside on this ground alone. It is also further contended by the learned counsel for the appellant that the defendant had proved the statement of A/c marked as Ext. A and also copy of the statement of account of the plaintiffs current account No". 1750 marked as Ext.B, C and D in which the rents paid by the defendant were credited to the plaintiffs account, and, that there is also the evidence that the plaintiff withdraw money from that account, therefore, the learned Court below did not consider these facts and evidence on record at the time of passing the impugned judgment and decree, the learned counsel for the appellant contended. The main contention of the learned counsel for the appellant is that the present suit is governed by the Assam Urban Areas Rent Control Act and, as such unless any ground under section 5 of the Act is made out no decree for eviction can be passed and that if a tenant continues to be a tenant so long as a decree for eviction is not passed against him, no decree for compensation or mesne profit can be passed against a tenant. It is also further contended by the learend counsel for the appellant that the defendant continued to occupy the suit premises even after the lapse of the lease period as alleged by the plaintiff and, as such, it shall be presumed that the lease had been renewed and the defendant cannot be evicted from the suit premises. 9.
It is also further contended by the learend counsel for the appellant that the defendant continued to occupy the suit premises even after the lapse of the lease period as alleged by the plaintiff and, as such, it shall be presumed that the lease had been renewed and the defendant cannot be evicted from the suit premises. 9. In reply, Shri NM Lahiri, learned senior counsel, assisted by Shri GN Sahewalla, learned counsel for the respondent-plaintiff submitted that the trial Court rightly decreed the suit of the plaintiff-respondent and that there is no infirmity or illegality in the impugned judgment and decree. 10. Now, before us, the points for determination in this appeal are that whether the learned trial Court had exercised its jurisdiction illegally or with material irregularity while passing the impugned judgment and decree and that, whether the findings of the learned trial Court on the issues so far framed in the present suit are tenable in the eye of law or not. 11. On perusal of the impugned judgment and decree, as well as the relevant records, the learned trial Court had disposed of and decided the additional issue viz "whether this Court has jurisdiction to try the suit in view of Arbitration clause in the lease agreement as alleged by the defendant" by an order dated 6.12.1989 passed in Title Suit No. 17 of 1987 in favour of the plaintiff-respondent. In this regard, the present appellant did not challenge the validity of the said order of 6.12.1989 and, as such, we are of the view that the findings of the learned trial Court on the said additional issue is an absolute order and, as such, no interference of it is called for. While deciding issue Nos.1, 2 and 3 the learned trial Court found that the suit is maintainable in law and that there is cause of action for the suit; and that the ejectment of tenant under section 5 of the Assam Urban Areas Rent Control Act, 1972 (for short the Act, 1972) can be claimed/initiated not only on the ground of payment of less rent, but also on the ground of non payment of any rent to the full extent which is permissible under the said Act. 12.
12. In our considered view the findings so far arrived by the learned trial Court on the said issue Nos.1, 2 and 3 do not suffer from any irregularity or incorrectness or illegalities. While deciding the issue Nos.4 and 6 the learned trial Court observed that the defendant had right to be in possession of the suit premises upto 14.4.84 by virtue of the lease deed marked as Ext 2 and the possession of the defendant over the suit premises was illegal and unauthorised immediately after expiry of the day of 14.4.84 and that exercise of the option to renew the lease at any time after 14.4.84 is meaningless, because the renewal is to maintain, the continuity of lease immediately on the expiry of the original lease and so, even a break of an hour would terminate the renewal clause. The learned Court below also examined the contention of the plaintiff that the defendant-appellant Bank credited the account of the plaintiff by rent is false, as because the document placed by the defendant in this contest i.e. ExtA (the statement of Account) appears to be the statement of account against M/s Senairam Dungarmal not against the plaintiff-company and the account of M/s Senairam Dungarmal has not bearing with the account of the plaintiff. Considering all these aspects the learned trial Court came to the conclusion that the statement of accounts marked as Ext A relied upon by the defendant do not help the case of the defendant in establishing that it credited plaintiffs account by rents at the due time and thereby exercised the option of renewing the lease impliedly. The learned trial Court further observed that admittedly the defendant did not pay my rent since 15.4.1984 and wrongly adjusted that amount against the loan, which was not due and even if, there was any due after the plaintiff performed his part )f the contract as per compromise decree for the lease period often years, then also the defendant Bank ought to have proceeded against all the defendant of he earlier suit viz TS No.3 of 1973 in accordance with clause No.8 of the terms of settlement as in Annexure 2 to enforce the decree. Finally, the learned trial Court came to the conclusion that the defendant-appellant Bank is a defaulter in respect of the payment of rents due to the plaintiff-respondent herein. 13.
Finally, the learned trial Court came to the conclusion that the defendant-appellant Bank is a defaulter in respect of the payment of rents due to the plaintiff-respondent herein. 13. It is well settled that if a lessee remains in possession after determination of the term of the lease, he is under the common law a tenant on sufferance. On the otherhand if a tenant after determination of the lease is in possession without the consent of the landlord, he is a tenant by sufferance. It is only where a tenant will continue in possession with the consent of the landlord that can be called a tenant 'holding over or tenant at will'. These principles of law find its place in the decision rendered by the Apex Court in Maneksha Ardeshir Irani vs. Manekji Edulji Mistry, (1974) 2 SCC 621 . On this aspect the Supreme Court in Badrilal vs. Municipal Corporation of Indore, reported in AIR 1973 SC 508 held thus : "A person who is lawfully in occupation of the premises does not become a trespasser. If he does not become a tenant holding over, he would be a tenant by sufferance. When the renewal was made subject to condition of payment of upset price and increased rent within specified date, on the failure of the lessee to pay the amount within the specified date the lessee ceased to be a tenant holding over but only a tenant by sufferance and could be evicted without notice. Acceptance of rent at old rate by the lessor does not change the position." 14. In the instant case the lease period was expired on 14.4.84 and the defendant has not applied for renewal of the lease and that the defendant has not paid, tendered or deposited monthly rent and other service charges since 1st day of April, 1984. 15. We have also perused the eviction notice as in Annexure 3 dated 13th August, 1984 asking the defendant to evict and quit the suit premises immediately after 14th September, 1984 and from 15th September, 1984 as the lease did not subsists amongst the parties. 16.
15. We have also perused the eviction notice as in Annexure 3 dated 13th August, 1984 asking the defendant to evict and quit the suit premises immediately after 14th September, 1984 and from 15th September, 1984 as the lease did not subsists amongst the parties. 16. On perusal of the evidence on record as well as after hearing the learned counsel on both sides, we are of the view that the defendant is a tenant by sufferance and, as such, the defendant has no authority to remain in possession of the suit premises and he should be considered as trespasser. Morefully, the defendant had failed to establish the fact that there has holding over of the suit premises by him after the expiration of the lease period and that the plaintiff accepted the rent from the defendant. In this regard the Apex Court laid down the principles of law relating to 'holding over' and the constitution of it as required under section 116 of Transfer of Property Act, in a case between Bhawanji Lakhamshi & others vs Himatlal Jamunadas Dani & others reported in AIR 1972 SC 819 . In that ise the Hon'ble Supreme Court held thus : "The act of holding over after the expiration of the term does not create a tenancy of any kind. If a tenant remains in possession after the determination of the lease, the common law rule is that he is a tenant on sufferance. A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent. The former is a tenant at sufferance in English Law and the latter a tenant holding over or a tenant at will. In view of the concluding words of section 110 of the Transfer of Property Act, a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy.
In view of the concluding words of section 110 of the Transfer of Property Act, a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy. What the section contemplated is that on one side there should be an offer of taking a new lease evidence by the lessee or sub-lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise. Mere acceptance of amounts equivalent to rent by a landlord from a tenant in possession after a lease had been determined either by efflux of time or by notice to quit and who enjoys statutory immunity from eviction except on well defined grounds as in Act, cannot be regarded as evidence of a new agreement of tenancy. We have already held the whole basis of section 116 of the Transfer of Property Act is that, in case of normal tenancy, a landlord is entitled, where he does not accept the rent after the notice to quit, to file, a suit in ejectment and obtain a decree for possession, and so his acceptance of rent is an unequivocal act referable only to his desire to assent to the tenant continuing in possession. That is not so where Rent Act exists; and if the tenant says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenant's continuing in possession, it is for the tenant to establish it No attempt has been made to establish it in this case and there is no evidence, apart from the acceptance of the rent by the landlord, to indicate even remotely that he desired the appellants to continue in possession after the termination of the tenancy. Besides, as we have already indicated the animus of the tenant in tendering the rent is also material. If he tenders the rent as the rent payable under the statutory tenancy, the landlord cannot, by accepting it as rent, create a tenancy by holding over. In such a case the parties would not be id idem and there will be no consensus.
If he tenders the rent as the rent payable under the statutory tenancy, the landlord cannot, by accepting it as rent, create a tenancy by holding over. In such a case the parties would not be id idem and there will be no consensus. The decision in AIR 1961 SC 1067 which followed the principles laid down by the Federal Court in 1949 FCR 262 (AIR . 1949 FC 124) is correct and does not require reconsideration. We, therefore come to the conclusion that there was no holding over by the appellants and if that be so, the question whether the tenancy created by holding over was for manufacturing purpose and therefore the landlord was bound to give six months' notice for the determination of the tenancy by holding over does not arise for consideration." 17. As discussed above, there is no evidence no record for establishing the fact that the plaintiff accepted the rent from the defendant after the expiry of the said lease period. Moreover, there is evidence on record to establish the fact that the defendant has failed to pay the arrear rent with effect from 1.4.84 till 14.9.84 and, as such, the defendant became defaulter in the eye of law. 18. For the reasons stated above, we find no infirmity in the impugned judgment and decree of the learned trial Court and we are of the view that the appellant could not make out a case to justify the interference of the impugned judgment and decree passed by the learned trial Court. In the result, this appeal has no merit and the same stands dismissed. Thus, we hereby affirm the impugned judgment and decree of the learned trial Court. In view of the existing facts and circumstances of the case, the parties shall bear their own costs, 19. Before we part with this case, we are constrained to express our regrets as we could not deliver this judgment in time as one of us (NS Singh, J) is permanently posted at Agartala Bench and we have the rare occasion to hold the Court togather at Principal Seat after the final hearing of this case.