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Karnataka High Court · body

2011 DIGILAW 543 (KAR)

Raghavendra Enterprises v. State of Karnataka

2011-05-31

B.V.NAGARATHNA

body2011
Judgment : In this writ petitions, petitioner which is a partnership firm has challenged the order dated 16-12-2008 passed by the 3rd respondent in respect of Parimala Theatre (Annexure –G) and order bearing even date in respect of Pradeep Theatre as per Annexure –H and also order passed by the 2nd respondent in respect of Parimala Theatre dated 12-5-2009 as per Annexure –J and order bearing even date in respect of Pradeep Theatre passed by the 2nd respondent as per Annexure –K. 2. The petitioner has averred that it is a registered partnership firm and the property bearing No. 290, City Market Square, Kalasipalyam, Bangalore – 2 belongs to the 4th respondent. It was initially a vacant land and that the petitioner had approached the managing Committee of the 4th respondent as well the State Government to lease out the vacant land on long lease for the erection of a cinema theatre and for exhibition of films. The State Government as well as the Managing Committee of the 4th respondent agreed to lease out the land for an initial period of 30 years with a condition that the petitioner should invest for putting up construction of a cinema theatre and accordingly fixed the rents. It was also stated that the petitioner had an option to renew the lease for a further period of 10 years subject to certain terms and conditions. Order dated 11-3-1974 was issued by the State Government as per Annexure –A since the 4th respondent is under the charge of an Administrator pursuant to which a registered lease deed was entered into between the petitioner and the 4th respondent on 26-4-1974 as per Annexure –B. Thereafter, Government order dated 24-7-1976 has been issued modifying the earlier terms of the lease deed in respect of Parimala Theatre and Pradeep Theatre. That the initial period of lease expired on 29-4-2004 and in terms of the renewal clause negotiations have taken place between the petitioner and the 4th respondent but the same have not concluded yet. 3. According to the petitioner, the 4th respondent had sent a draft lease deed as per Annexure –E but there has been no final lease agreement entered into between the parties. The petitioner has paid rents and has continued to pay rents to the 4th respondent since the expiry of the lease. 4. 3. According to the petitioner, the 4th respondent had sent a draft lease deed as per Annexure –E but there has been no final lease agreement entered into between the parties. The petitioner has paid rents and has continued to pay rents to the 4th respondent since the expiry of the lease. 4. When the matter stood thus, the 4th respondent had initiated proceedings under the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974 (herein after referred to as the ‘PP Act’). The order passed under the said Act is under challenge in M.A. No. 75 of 2008 and there has been a stay of the eviction order. Pending disposal of the appeal filed before the District Judge, Bangalore City, petitioner had made a request for renewal of the licence for cinematography since it was to expire on 31-12-2008. The 3rd respondent passed an order dated 16-12-2008 stating that the licence could not be renewed but the petitioner could run the theatre till 31-12-2008 as they had a valid licence till the said date. The said order is in respect of Parimala Theatre. A similar order was passed with regard to Pradeep theatre also on 16-12-2008. Being aggrieved by the said orders, the petitioner filed appeals before the 2nd respondent and by orders dated 12-5-2009, the said appeals have been dismissed. Being aggrieved by the said orders the petitioner has filed these writ petitions by contending that the petitioner is not an unauthorized occupant but on the other hand, he is in lawful possession of the premises by virtue of Section 53-A of the Transfer of Property Act, 1882 and that the petitioner has the right to get the lease renewed since they have invested huge sums of money for constructing cinema theatre on the land in question and that cinema licences of the two theatres have to be renewed. 5. It is also averred that O.S.No. 5135 of 2008 has been already filed by the petitioner seeking specific performance of the contract of lease inasmuch as the petitioner has sought for execution of renewal lease deed in favour of the petitioner which is pending consideration before the City Civil Court at Bangalore. 5. It is also averred that O.S.No. 5135 of 2008 has been already filed by the petitioner seeking specific performance of the contract of lease inasmuch as the petitioner has sought for execution of renewal lease deed in favour of the petitioner which is pending consideration before the City Civil Court at Bangalore. That according to the petitioner the reasons assigned by the respondents for rejecting the request made by the petitioner for renewal of the licence of the two theatres are not in accordance with law and therefore the petitioner has challenged the said order and has sought for a direction to the 3rd respondent for renewal of the licence for exhibiting the films at the said two theatres. 6. The 3rd respondent has filed statement of objections stating that the 4th respondent – Institution is notified under the provisions of Karnataka Hindu Religious Institutions and Charitable Endowments Act, 1997 and that alienation of any immovable property of the 4th respondent without the prior sanction of the State Government is not permissible and that the petitioner is continuing possession of the property unauthorisedly and the lease period has expired and there has been no renewal of the lease deed. 7. Under the circumstances, the proceedings were initiated under the PP Act and the said dispute is pending before the District Court and that in the absence of there being any sanction for alienation of the said property or entering into any kind of agreement, the continuation of possession by the petitioner is unlawful and therefore under Rule 6 of the Karnataka Cinemas (Regulation) Rules, 1971 (hereinafter referred to as ‘Cinemas Regulation Rules, 1971’) the petitioner is not entitled to renewal of the licence. Therefore, the 3rd respondent has sought dismissal of the writ petitions. 8. Therefore, the 3rd respondent has sought dismissal of the writ petitions. 8. The 4th respondent has also filed statement of objections stating that it is a charitable trust and no doubt a portion of the land belonging to the trust was leased in favour of the petitioner which is a partnership firm, initially for a period of 30 years from 26-4-1974 and any renewal of the lease has to be in terms of Clause 16 of the agreement dated 26-4-1974 and that the original partners of the petitioner – partnership firm have sold away their rights to the 3rd parties and that there are new persons who are presently partners in the said firm and that the firm is an unregistered partnership firm and the same would be evident a per Annexure –R1, dated 5-2-2009 and therefore it cannot maintain these writ petitions. Proceedings initiated under the PP Act have also been adverted to and it is contended that since initial lease period has come to an end, possession of the petitioner is unlawful since there has been no renewal of the said lease, In fact the petitioner has filed O.S. No. 5135 of 2008 before the City Civil Court at Bangalore seeking renewal of the said lease. In fact the petitioner has filed O.S. No 5135 of 2008 before the City Civil Court at Bangalore seeking renewal of the lease and till the petitioner gets such a decree in his favour of possession of the property in question by the petitioner is unlawful and therefore the respondent-Authorities were justified in not renewing the licence under Rule 6 of the Cinemas Regulation Rules, 1971. Therefore, the 4th respondent has also sought for dismissal of the writ petitions. 9. I have heard the learned Counsel for the petitioner and learned Counsel for respondents. 10. It is submitted by Sri Shaker Shetty, learned Counsel on behalf of the petitioner that the 4th respondent which is a charitable trust is now being administered by a managing Committee constituted by the State Government and that the lease agreement initially entered into on 26-4-1974 between the petitioner-partnership firm and the 4th respondent was preceded by Government Order dated 11-3-1974. Thereafter, there has been a modification of the said order on 24-7-1976. Thereafter, there has been a modification of the said order on 24-7-1976. He has also stated that pursuant to the lease agreement, the petitioner has put up construction of two theatres, out of which one is a mini theatre and on the expiry of the lease agreement, correspondence have been entered into between the petitioner and the 4th respondent for the renewal of the lease period and since there has been no renewal agreement entered into between the parties, the petitioner has filed a suit for specific performance in that regard. In view of the various clauses mentioned in the lease agreement, the continuation of the possession of the property by the petitioner cannot be termed to be unauthorised or unlawful. The respondent-authorities have not taken into consideration the nature of the possession of the petitioner and have not applied their mind as to whether the said possession is lawful or not while considering the application for renewal of licence filed by the petitioner under Rule 6 of the Cinemas Regulation Rules, 1971 and therefore the rejection of the application by the 3rd respondent and affirmation of the said order by the 2nd respondent and affirmation of the said order by the 2nd respondent are not in accordance with law. He therefore submitted that the said order have to be quashed and a direction has to be issued to the 3rd respondent to renew the licences under Rule 6 of the Cinemas Regulation Rules, 1971. He also contended that the facts of the present case have to be taken into consideration inasmuch as the clause pertaining to renewal of the lease has not yet fructified inasmuch as the clause pertaining to renewal of the lease has not yet fructified inasmuch as there is no renewal lease deed which has been executed between the parties pursuant to the expiry of the initial lease period and in that regard petitioner has filed suit for specific performance and subsequent to the expiry of the lease petitioner has paid rents to the 4th respondent which have been accepted and hence the possession of the petitioner under those circumstances cannot be unlawful. 11. He has also filed a memo stating that the original partners of the petitioner-partnership firm have exited and subsequently there have several partners who have entered the said partnership firm. 11. He has also filed a memo stating that the original partners of the petitioner-partnership firm have exited and subsequently there have several partners who have entered the said partnership firm. As and when there have been entry of new partners and exit of existing partners, the same has been brought to the notice of the 4th respondent and also the changes have been made before the Sub-Registrar and in that regard has filed memo stating that the present partners have entered into the petitioner-partnership firm on various dates and therefore they have every right to file these writ petitions as the partnership firm is continuing. He therefore concluded his submission by saying that the petitioner may be permitted to carry on the business in the schedule property and therefore licences of the two theatres be renewed. 12. Per contra, it is contended by Sri Rao learned Counsel for the 4th respondent has placed reliance on several decisions of this Court as well as the Apex court to contend that any possession of the property of the 4th respondent subsequent to the expiry of the initial lease period by the petitioner is only litigious possession and is unlawful and therefore the respondent-authorities were justified in holding that the petitioner-firm was not in lawful possession of the property and accordingly rejected the application for renewal of the licence under the Cinemas Regulation Rules, 1971. He has also contended that the interim order granted in M.A. No. 75 of 2008 can only enure to the benefit of the petitioner so as to continue to be in possession of the property but that would not enable the petitioner to seek renewal of the licence for the said theatres when he is in unlawful possession of the property in question. On the basis of the decisions cited by him namely, M.C. Chockalingam and Others v V. Manickavasagam and others ( AIR 1974 SC 104 : (1974) 1 SCC 48 ); Thayarammal v People’s Charity Fund and Others (1978 (1) Kar. L.J. 438); Kanthamma v S.A. Sudarshan and Another (1981 (2) Kar. L.J. 249); and Bishendas and Another v The Divisional Commissioner, Bangalore Division, Bangalore and Others (2003 (2) Kar. L.J. 79; ILR 2003 Kar. 762 ; AIR 2003 Kant. L.J. 438); Kanthamma v S.A. Sudarshan and Another (1981 (2) Kar. L.J. 249); and Bishendas and Another v The Divisional Commissioner, Bangalore Division, Bangalore and Others (2003 (2) Kar. L.J. 79; ILR 2003 Kar. 762 ; AIR 2003 Kant. 273), learned Counsel for the 4th respondent has stated that the petitioner not being in lawful possession of the property in question is not entitled for renewal of the licence under the said Cinema Regulations. 13. Learned Government Pleader appearing for respondents 1 to 3 has also submitted that the 4th respondent is a charitable trust governed under the provisions of the Karnataka Hindu Religious and Charitable Institutions Act, 1987 and so long as the State Government would not sanction any alienation to be made by the 4th respondent, the petitioner would not be enabled to have a renewal of the lease in terms of Clause 16 of the Lease Agreement dated 26-4-1974 and under the circumstances the respondent-authorities have rightly referred to the provisions of the said Act and rejected the application made by the petitioner which orders would not call for any interference in these writ petitions. 14. Having heard the learned Counsel on both sides and on perusal of the materials on record, it is observed that pursuant to the Order dated 11-3-1974, a registered lease agreement was entered into between the 4th respondent and the petitioner on 26-4-1974 by which the lease in Clause 16 of the said agreement has provided for renewal of the lease for further period of 10 years. However, it is not in dispute that there is no renewal of the lease by entering into any registered lease agreement till date. In fact the petitioner has filed O.S. No.5135 of 2008 seeking specific performance as against the 4th respondent to enter into a renewed lease agreement. It is also not in dispute that the 4th respondent has passed an order under the PP Act which is a subject-matter of challenge in M.A. No. 75 of 2008 and in which there is an interim order of stay of eviction passed by the 4th respondent. When matters stood thus, applications for renewal of the licences under Rule 6 of the Cinemas Regulation Rules, 1971 were made by the petitioner. When matters stood thus, applications for renewal of the licences under Rule 6 of the Cinemas Regulation Rules, 1971 were made by the petitioner. The said application was filed in respect of both Parimala theatre and Pradeep theatre, which have been rejected by orders passed by the 3rd respondent and being aggrieved by the said orders the petitioner filed appeals before the 2nd respondent which have also been rejected against which these writ petitions have been filed. 15. In order to consider the rival contentions of the Counsel on both the sides at the outset it would be useful to refer to Rule 6 of the Cinemas Regulation Rules, 1971, which reads as follows.- “6. Records relating to ownership or possession to Site, Building or Equipment to be produced.-If the applicant for licence is the owner of the site, building or equipment he shall produce before the Licensing Authority necessary records relating to his ownership and possession. If he is not the owner, he shall produce to the satisfaction of the licencing authority, documentary evidence in proof of his lawful possession of the site, building or equipment”. On reading of the said rule it becomes clear that if the applicant seeking licence under the said rule is the owner of the site, building or equipment he should produce necessary records relating to his ownership and possession and if the applicant is not the owner, then he should produce to the satisfaction of the licensing authority, documentary evidence in proof of his lawful possession of the site, building or equipment. Therefore, in the instant case, the petitioner not being the owner of the property in question has to prove that he is in lawful possession of the Schedule property so as to seek licence under the provisions of the Cinemas Regulation Rules, 1971. 16. At the outset, it would be necessary to observe that having regard to the memo filed by the Counsel for the petitioner, the original partners in the petitioner-partnership firm have exited from the firm and there have been several partners who have entered the firm and the entry and exit of the said partners have been notified to the 4th respondent as well as to the Sub-registrar Office. Therefore, the contention that the present partners have no locus standi to file the writ petition as they are not the partners of the petitioner-partnership firm would not merit consideration. Therefore, it would not be necessary to consider the decisions cited by the Counsel for the petitioner with regard to that aspect of the matter. The only aspect that has to be considered is as to whether the petitioner is in lawful possession of the schedule property bearing No. 290, City Market Square, Kalaisipalayam, Bangalore – 2, so as to seek renewal of the licence for exhibition of cinemas in the said two theatres. 17. It is noticed that pursuant to the order dated 11-3-1974 issued by the State Government, the 4th respondent entered into a registered lease deed with the petitioner on 26-4-1974 which was initially for a period of 30 years subject to renewal clause namely Clause 16 which reads as follows. – “The lessee shall after the expiry of the period of 30 years from the date of commencement of this lease, shall have the option to continue as lessees for a further period of 10 years on such expiry on a rent of Rs. 17,500.00 (Rupees Seventeen Thousand Five Hundred Only) on the existing terms and conditions. The lessees will be entitled to the benefit of the renewal of the lease provided they inform to the lessor of their intention to exercise the option of renewal in their favour in writing at least 3 months before the expiry of the term of 30 years fixed under this deed of lease. The lessees in the extent of exercising the option in their favour shall pay the sum of Rupees fifty-two thousand five hundred (52,500.00) being the rent for three months at the rate of Rs. 17,500.00 for the period of renewal of the lease for a further term of ten years and the parties shall execute a fresh deed of lease for the said term of ten years”. 18. It is also not in dispute that there has been no agreement renewing the lease, which has been entered into between the parties subsequent to the expiry of the initial period of lease on 26-4-1974. However, it is not in dispute that since the expiry of initial period of lease, the petitioner has been making rental payment to the 4th respondent and the same have been received. However, it is not in dispute that since the expiry of initial period of lease, the petitioner has been making rental payment to the 4th respondent and the same have been received. In fact there have been correspondence between the parties in this regard and since there has been no finalization of the renewal of the lease by entering into any agreement, the petitioner has also filed O.S.No. 5135 of 2008, which is a suit for specific performance for execution of the lease deed by the 4th respondent, which is pending adjudication in the City Civil Court. Before considering the questions as to whether petitioner’s possession of the Schedule property is lawful or not the decisions cited at the bar could be considered first. 19. In order to contend that the petitioner’s possession of the property in question is not lawful, the 4th respondent has relied upon certain decisions. In the case of M.C. Chockalingam, the Apex Court has held that a tenant is not entitled to claim to be in lawful possession of the premises on determination of the tenancy on expiry of the lease. In the said case, both the landlord as well as the tenant had made application for grant of licence for exhibition of films after the expiry of lease and the Apex Court while elucidating on various facets on nature of possession held by a tenant opined that insofar as the Rule is concerned namely Rule 13 of the Madras Cinemas (Regulation) Rules, 1957, which is in pari materia with the Karnataka Rule, on the expiry of the lease period, possession of a tenant was not lawful and therefore declined to renew licence in favour of the tenant. 20. Similarly, in the case of Thayarammal, it was held that once the period of lease is fixed, lessee is bound to put the lessor in possession of the leased property on the termination of the lease and therefore the refusal to renew the licence was not illegal since possession of the tenant after the expiry of the lease was not lawful. 21. 21. Following the decision of the Apex Court in the case of Kanthamma, this Court has held that the non-renewal of the licence under the Rule was justified since the applicant for licence was not in lawful possession under the lease deed since the lease period had expired and therefore the rejection of the renewal was upheld. In the case of Bishendas, also it has been held that once the lease period expires, possession of the lessee is not lawful but is litigious possession and the possession without there being a bilateral consensual act of holding over is only a juridical possession. In the said case also, the rejection of the application for renewal of the licence was upheld. 22. Learned Counsel for the petitioner has referred to each of these decisions and had contended that reliance placed by the Counsel for the 4th respondent on these decisions would not be of any assistance having regard to the facts on the basis of which the decisions have been rendered in those cases and having the regard to the facts of the present case. In support of his contention he has stated that Section 53-A of the Transfer of Property Act will have to be applied in the present case, having regard to the fact that on the basis of the lease agreement dated 26-4-1974, the petitioner has been put in possession of the property in question. That they continue to be in possession of the said property pursuant to the said agreement and having been granted a right of renewal of the lease in Clause 16 of the said agreement the continuation of the petitioner’s possession of the said property is lawful and protected by virtue of section 53-A of the Transfer of Property Act. Therefore, in support of his submission he has relied upon certain decisions to contend support of his submission he has relied upon certain decisions to contend that this aspect of the matter has not been taken in to consideration by the respondent-authorities. Therefore, in support of his submission he has relied upon certain decisions to contend support of his submission he has relied upon certain decisions to contend that this aspect of the matter has not been taken in to consideration by the respondent-authorities. Therefore, it has to be held that having regard to the fact that the lease deed itself provides for renewal of the lease and the fact that the petitioner has filed a suit for specific performance for execution of a lease agreement and that subsequent to the expiry of the lease, the petitioner as the lessee has paid rents to the 4th respondent therefore his possession has to be considered as lawful. 23. In this context, it would be necessary to take into consideration two situations, one, where the lease deed does not provide for a renewal clause and the second, where the lease deed provides for a renewal clause and steps have been initiated for getting the lease renewed. When the lease deed does not provide for a renewal clause and the lease period expires, any continuation of the possession of the lessee or the tenant would be in the nature of the tenant holding over and would in my considered view be unlawful possession. However, when the lease deed prescribes a renewal clause and if the lessee continues to be in possession despite and expiry of the lease and has also taken steps for seeking renewal agreement to be executed, then in such a case the continuation of the lessee pursuant to the expiry of the lease cannot be held to be unlawful in the nature. In this context it would also be relevant to note that if the lease deed has a renewal clause the tenant could continue to be in possession, of course subject to terms and conditions of the renewal clause. 24. No doubt in the instant case it is not known whether the terms and conditions have been complied with by the respective parties inasmuch as what is clear is the fact that there has been no renewal of the agreement entered into between the parties. In fact the petitioner is seeking such a renewal agreement in O.S. No. 5135 of 2008 which has been filed by the petitioner. In fact the petitioner is seeking such a renewal agreement in O.S. No. 5135 of 2008 which has been filed by the petitioner. Therefore the status of the petitioner who is in the nature of the tenant holding over in the face of a renewal clause in the lease deed has to be distinguished from that of a tenant who is holding over in the context of a lease deed not having a renewal clause on the expiry of the lease period. Moreover, in the instant case, the petitioner has been paying the rents to the 4th respondent and the same has also been accepted and no steps have been taken by the 4th respondent to seek eviction of the petitioner from the property in question in accordance with law. It is also relevant to note that the petitioner has been in possession of the property in question pursuant to the initial lease agreement dated 26-4-1974 and the said agreement is in writing and signed by all the parties and registered and pursuant to the said lease agreement, the petitioner was put in possession of the property in question. The fact that he is continuing to be in possession pursuant to the said agreement has to be considered as part performance of the contract inasmuch as the present possession of the petitioner subsequent to the expiry of the lease deed is only in the light of Clause 16 where renewal of the lease agreement is provided for. As has already been stated, compliance of the terms and conditions of Clause 16 in the instant case is a matter of adjudication between the parties and original suit is filed by the petitioner against the 4th respondent in the absence of there being any steps taken under the terms of the lease agreement by the 4th respondent after the expiry of the initial period of lease. Under the circumstances, it cannot be held that the possession of the petitioner is unlawful. 25. Of course in this context it is also relevant to note that the 4th respondent has initiated steps under the PP Act on the premise that the petitioner is in unauthorised occupation of the said premises. The initiation of proceedings under the PP Act is quite distinct from taking steps under the general law in terms of the provisions of the lease agreement. The initiation of proceedings under the PP Act is quite distinct from taking steps under the general law in terms of the provisions of the lease agreement. The fact that there have been several correspondence exchanged between the parties and the fact that the 4th respondent has collected the rents from the petitioner and also the fact that the agreement of lease itself provides for renewal of the lease which is subject to certain terms and conditions would entitle the petitioner to continue to be in possession of the property in terms of the agreement dated 26-4-1974. The right of the petitioner for renewal of the lease is not a matter to be taken into consideration by this Court in this proceeding. It is matter to be adjudicated upon in O.S. No. 5135 of 2008. But having regard to the facts and circumstances of the present case and keeping in mind the renewal clause mentioned in the lease deed, in my considered view, the continuation of the possession of the property in question by the petitioner despite the initial expiry of the lease period, in the face of renewal clause, cannot be held to be unlawful. There has been no application of mind by the authorities on this aspect of the matter. 26. In this context it is to be noted that though the Apex Court has held in the decision referred to supra that any continuation of the possession of the lessee or a tenant subsequent to the expiry of the lease is a juridical possession, the fact remains that in the said case, both the lessor as well as the lessee had applied for grant of licence in their favour and there was no renewal clause in the contract of the lease entered into between the parties. The facts of the present case are distinct from the facts in the said decision. Therefore, the same is not applicable to the present case. 27. In Case of Thayarammal, though there was a renewal clause in the agreement of lease entered into between the lessor and the lessee but under the renewal clause no right was given to the lessee to claim renewal as of right. Therefore, the same is not applicable to the present case. 27. In Case of Thayarammal, though there was a renewal clause in the agreement of lease entered into between the lessor and the lessee but under the renewal clause no right was given to the lessee to claim renewal as of right. Also, if the lessors decided to give the premises and equipment on lease after 12-12-1977 i.e., after the termination of lease the lessee was entitled to a first priority but if the lessors decided to run the cinema themselves and did not give on lease the lessee had no right insist on renewal of the lease. Therefore, in those circumstances, it was held that once the period of lease had lapsed the lessee was bound to put the lessor in possession on the termination of the lease. It was also observed that if the lessee has filed a suit for specific performance for renewal of the lease then the possession of the petitioner under interregnum period till the said suit was decreed was not lawful possession. The renewal clause in the said case is quite distinct from the renewal clause in the instant case having regard to the fact that the option for renewal of the lease was provided only to the lessee and the lessee had to seek renewal subject to terms and conditions and the petitioner – lessee has also taken steps to get the renewal of the lease. 28. Similarly, in the case of Kanthamma, this Court has held that any temporary injunction granted against the owner of the premises was not conclusive or indicative of the fact that the tenant was holding over or a person was in lawful possession of the site as litigious would stand excluded from the concept of lawful possession. This decision also has no application to the facts of the present case. In the instant case, it is noticed that the interim order granted by the District Court in M.A.No. 75 of 2008 is in the context of the scope of the PP Act and therefore the same would not enure to the benefit of the petitioner or the 4th respondent insofar as Clause 16 of the agreement is concerned. 29. Similarly, in the case of Bishendas, option exercised for renewal of the lease was not accepted by the lessor. 29. Similarly, in the case of Bishendas, option exercised for renewal of the lease was not accepted by the lessor. Therefore, it is on those circumstances, it was held that the continuation of the tenant after the expiry of the lease agreement was not lawful and hence the Rule 6 of the Cinemas Regulation Rules, 1971 could not enure to the benefit of the applicant seeking licence under the said rule. In the instant case, there has been no reply to letter dated 3-6-2004 written by the petitioner to the 4th respondent. 30. It is also necessary to refer to the protection that is provided under Section 53-A of the Transfer of Property Act and which have been elucidated by the Apex Court in the case of Nathulal v Phoolchand AIR 1970 SC 546 : (1969) SCC 120: (1970) 2 SCR 854 . In fact a Full Bench of this Court in the case of Narasimhasetty (Deceased) by L.R.s v Padmasetty 1988(3) Kar. L.J. 73 (FB) : ILR 1998 Kar. 3230 (FB), has stated that a transferee in possession pursuant to a contract of sale even if fails to file a suit for specific performance within the prescribed period of limitation still in law, the contract remains valid and operative entitling the transferee to assert his right to retain the possession over the property by virtue of statutory right conferred by for recovery of possession is filed by the lessor or by the transferor. The said ratio though in the context of an agreement of sale is squarely applicable to the present case also. 31. The observation of the Apex Court in the case of Shrimant Shamrao Suryavanshi and Another v Pralhad Bhairoba Suryavanshi (dead) by L.R.s and Others ILR 2003 Kar. 503 (SC): AIR 2002 SC 960 : (2002) 3 SCC 676 are also relevant, in the context of Section 53-A of the Act. The Apex Court has held that a person who is in possession of the property pursuant to an agreement can continue to exercise his right of possession even if a suit for specific performance of the agreement of sale has become barred by limitation. 32. The Apex Court has held that a person who is in possession of the property pursuant to an agreement can continue to exercise his right of possession even if a suit for specific performance of the agreement of sale has become barred by limitation. 32. Therefore, in the instant case Clause 16 of the agreement of lease dated 26-4-1974 is the foundation for renewal to be entered into between the parties and so long as the parties do not enter into any registered agreement for a further renewal period of 10 years the continuation of for a further renewal period of 10 years the continuation of the possession of the property in question by the petitioner cannot be held to be unlawful. In fact Clause 16 is the foundation on the basis of which fresh rights enure to the lessor as well as the lessee and particularly to the lessee in the instant case, since the lessee only has an option to seek renewal of lease for a further period of 10 years. Therefore, so long as there is no determination of rights between the parties arising under Clause 16 of the agreement despite initial expiry of the lease period, the continuation in possession of the property in question by the petitioner has to be held to be lawful. The fact that rents have been paid by the lessee in the instant case would mean that the tenancy is a month to month tenancy and the petitioner’s right to seek specific performance of the contract is subject to terms of Clause 16. As already observed the same is a subject-matter of O.S.No. 5135 of 2008 and it is not for this Court to make any observations on the rights of the respective parties in that regard. 33. Therefore, the respondent-authorities had to take into consideration the renewal clause in the lease agreement dated 26-4-1974. On the basis of the said clause it is held that the petitioner’s possession of the property in question is lawful and petitioner is entitled to seek renewal of the licence in terms of Rule 6 of the Cinemas Regulation Rules, 1971. 34. For the reasons stated supra the orders at Annexures-G, H, J and K are quashed. On the basis of the said clause it is held that the petitioner’s possession of the property in question is lawful and petitioner is entitled to seek renewal of the licence in terms of Rule 6 of the Cinemas Regulation Rules, 1971. 34. For the reasons stated supra the orders at Annexures-G, H, J and K are quashed. The 3rd respondent is directed to renew the licence in respect of two theatres by taking into consideration the other conditions of licence that have to be fulfilled by the petitioner. In the result, the writ petitions are allowed. Parties to bear their own costs.