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Madras High Court · body

2012 DIGILAW 1842 (MAD)

Indian Oil Corporation Ltd. , rep. by its Chief Divisional Manager v. Indian Institute of Engineering Technology, rep. by its secretary

2012-04-10

T.MATHIVANAN

body2012
Judgment : 1. Challenge is made in this appeal to the Judgment and Decree dated 17.07.2008 and made in O.S.No.5000 of 2007, on the file of the learned VI Additional Judge, City Civil Court, Chennai. 2. The defendant in the suit is the appellant herein, whereas the plaintiffs are the respondents. 3. For easy reference, the original legal character of the parties to the suit may not be changed and be it as it is in the suit. 4. The facts, which are absolutely necessary for the disposal of the appeal are as under: 4.1. The suit is filed by the plaintiffs against the defendant seeking the following remedies: i. to quite and deliver vacant possession of the piece, part and parcel of the plot of land to an extent of 8995 sq.ft., situated in Survey No.327/1, Arcot Road, Kodambakkam, Chennai-24, after removing the installations, fixtures, fittings, super structure and buildings thereon; ii. to pay a sum of Rs.4,80,000/-being the past damages payable for the use and occupation of the suit property, together with the interest at the rate of 18% per annum for the said sum of Rs.4,80,000/- from the date of the plaint till the date of realisation; iii. to pay future damages at the rate of Rs.22,000/-per month from 01.07.2007 till the date of delivery of possession of the suit property; and iv. to pay costs of the suit. 4.2 The first plaintiff is a society registered under the Societies Registration Act. It was formed with an object of establishing educational institution. The second plaintiff institution was formed by the first plaintiff for the said purpose. 4.3. The suit property measuring an extent of 8995 sq.ft., is situated in Survey No.327/1 (part), Arcot Road, Kodambakkam. It forms part and parcel of larger extent of land owned by the first plaintiff. The defendant is the Indian Oil Corporation Limited, a Government of India undertaking. The had approached the plaintiffs for leasing out the suit property for the purpose of erecting petrol/high speed diesel oil pumps and also selling petroleum products on monthly rental basis. Since the plaintiffs had also agreed to let out the suit property to the defendant, a lease agreement (Ex.A2) was entered into between the plaintiffs and the defendant on 18.07.1972 and the same was also duly registered. 4.4. Since the plaintiffs had also agreed to let out the suit property to the defendant, a lease agreement (Ex.A2) was entered into between the plaintiffs and the defendant on 18.07.1972 and the same was also duly registered. 4.4. The tenancy is according to English calendar month as per the clauses contained in the lease agreement dated 18.07.1972. The defendant was allowed to occupy the suit property for a period of twenty years commencing from 01.06.1972. The monthly rent is payable at the rate of Rs.700 for the first five years, Rs.950/-for the next five years and Rs.1,200/- for the next ten years payable on or before fifth day of succeeding month. 4.5. The defendant has been running the petrol bunk through its dealer, Vega Service Station. The lease period as agreed between the parties had expired as early as on 31.05.1992. Hence, the second plaintiff through their letter dated 25.02.1992 (Ex.A4) had expressed their inability to renew the lease for further period and therefore asked the defendant to surrender vacant possession of the suit property. Since the defendant had refused to do so, the plaintiffs had sent notices through their counsel dated 23.03.1993 (Ex.A7) and 29.01.1998 (Ex.A9) demanding to quite and deliver vacant possession of the suit property. 4.6. Even for these two notices, the defendant had not responded. The defendant is not entitled to remain in possession of the suit property after the expiry of the lease period and that too after the termination of the lease by the plaintiffs mutaully. The defendant’s possession of the suit property after the expiry of the lease period is illegal and in any event they are trespassers with effect from 31.05.2002 in the eyes of law. 4.7. The defendant by wrongly interpreting the clauses contained in the lease deed dated 18.07.1972 has claimed automatic renewal of lease after 31.05.1992 and has failed to deliver vacant possession of the suit property. 4.8. The plaintiffs had also sought for the delivery of possession of the suit property from the defendant through series of letters sent from time to time. But, the defendant has failed to consider the genuine claim of the plaintiffs. The plaintiffs are under no obligation to accept any amount by way of rent from the defendant. Hence, the second plaintiff had rightly returned the cheque sent by their counsel of the defendant along with the notice dated 31.01.1998 (Ex.A10). 4.9. But, the defendant has failed to consider the genuine claim of the plaintiffs. The plaintiffs are under no obligation to accept any amount by way of rent from the defendant. Hence, the second plaintiff had rightly returned the cheque sent by their counsel of the defendant along with the notice dated 31.01.1998 (Ex.A10). 4.9. Though the plaintiffs are legally entitled to claim damages for the use and occupation of the property, they restrict their claim only at the rate of Rs.20,000/- per month from 01.06.2005 to 31.05.2007, which is calculated to Rs.4,80,000/- and at the rate of Rs.22,000/- per month from 01.06.2007 till the date of delivery of the suit property. The plaintiffs are entitled to calculate interest at the rate of 18% per annum for the said amount from the date of plaint till the date of realisation. 4.10. The defendant in his written statement has contended that initially the lease period was for the period of twenty years commencing from 01.06.1972, on monthly rent was Rs.700/- for the first five years, Rs.950/- for the next five years and Rs.1,200/- for the next ten years. Subsequently, the lease was renewed for further period by virtue of an automatic renewal clause contained in the aforesaid lease deed dated 18.07.1972. The defendant has been in possession of the suit property by virtue of the renewal clause. 4.11. The defendant is regular in payment of rent and as such there is no irregularity as alleged by the plaintiffs. There is no iota of truth that the defendant’s business is a source of nuisance and polluting the atmosphere. 4.12. In the absence of any such notice to determine the tenancy, possession of the defendant in respect of the suit property is lawful and hence the defendant is not liable to pay any damage and therefore it is not necessary for the defendant to quit and deliver the vacant possession of the suit property to the plaintiffs as the lease did not come to an end by efflux of time. 5. Based on the pleadings of the parties, the trial Court has formulated as nearly as ten issues for the better adjudication of the suit. In order to substantiate their respective cases, both the plaintiffs and the defendant were directed to face the trial. Accordingly, one Miss. Lakshmi, who is one of the directors of the first plaintiff’s company was examined as P.W.1. In order to substantiate their respective cases, both the plaintiffs and the defendant were directed to face the trial. Accordingly, one Miss. Lakshmi, who is one of the directors of the first plaintiff’s company was examined as P.W.1. During the course of her examination Exs.A1 to A10 were marked. On the other hand, one Mr. Ganeshkumar and one Mr. V. Ramasamy were examined as D.W.1 and D.W.2 respectively on behalf of the defendant. During the course of their examination, Exs.B1 to B22 were marked. 6. On evaluating the evidences both oral and documentary and on considering the nature of the suit, the learned Trial Judge has decreed the suit as prayed for with costs on 17.07.2008, directing the defendant to deliver the vacant possession of the suit property within a period of two months. 7. Impugning the Judgment and decree of the Trial Court dated 17.07.2008, the defendant has approached this Court with the present appeal. 8. Based on the grounds of the memorandum of appeal, the following questions are arisen for the consideration of this Court. i. Is it correct to say that the lease period is valid till 2012 in view of the lease terms viz., initial period of twenty years, renewed period of ten years and further renewed period of ten years? ii. Is it correct to say that the lease could be determined only on issuance of one calendar month’s previous notice in writing by the lessee expressing his intention not to take any renewed lease? Question No.i: 9. the plaintiffs and the defendant have not disputed the other terms of the lease agreement dated 18.07.1972 excepting the renewal of lease period for another ten years, which according to the defendant is valid till 2012. To clarify this position, it is imperative on the part of this Court to make a comparative study of Ex.A2 and the testimony of D.W.1. 10. On perusal of the averments of Ex.A2, it is apparent that the tenancy is according to English Calendar month. The defendant was allowed to occupy the suit property for a period of twenty years commencing from 01.06.1972. 11. 10. On perusal of the averments of Ex.A2, it is apparent that the tenancy is according to English Calendar month. The defendant was allowed to occupy the suit property for a period of twenty years commencing from 01.06.1972. 11. Under Clause I(a) of the lease agreement it is covenanted as under: “that the lessee shall during the said term pay the said monthly rent of Rs.700/- for the first five years Rs.950/- for the next five years and Rs.1,200/- for the next ten years hereinafter reserved as rent to the lessor upon the conditions and in the manner aforesaid.” From the above context, it is thus palpable that the period of tenancy is twenty years commencing from 01.06.1972. According to the above clause the twenty years period would expire on 31.05.1992. 12. According to the above clause the twenty years period would expire on 31.05.1992. 12. In clause I(j) it is stipulated that” “the Lessee shall at the expiration or sooner determination of the said term yield up and deliver peaceful and vacant possession of the demised premises….” In the same clause, it has been stated that: “…..PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED THAT if the rent hereby reserved or any part payable and after being demanded or if the Lessee shall commit breach or fail or neglect to perform or observe any of the covenants conditions or agreements herein contained and on the part of the lessee to be observed and performed of the Lessee shall go into liquidation whether voluntarily or compulsorily then in any of the above cases it shall be lawful for the Lessors at any time thereafter to re-enter upon the said premises or any part thereof in the name of the whole and to take action to repossess and enjoy as in all their former estate and interest….” It is also stated in the same clause that “PROVIDED ALWAYS AND IT IS AGREED AND DECLARED that the power of re-entry hereinabove contained shall not be exercised unless and until the Lessors shall have given to the Lessees notice in writing of their intention to re-enter and of the specific breach or breaches of the covenants in respect of which the re-entry is intended to be made and default shall have been made by the Lessee is remedying such breach or breaches within a reasonable time being however not less than three months after the giving of such notice….” The above clauses are meant in case the lessee viz. the defendant commits breach or fail or neglect to perform or observe any part of the covenants of the agreements. 13. the defendant commits breach or fail or neglect to perform or observe any part of the covenants of the agreements. 13. Insofar as the expiration of the tenancy period of twenty years is concerned, it has also been covenanted in the same clause as under: “….PROVIDED ALWAYS AND IT IS AGREED AND DECLARED that the expiration of the said term of 20 years this lease will be automatically and without any further act of any of the parties hereto be renewed for a further term of 10 years from the expiration of the said term hereby granted unless the lease shall prior to the expiration of the last mentioned term give to the intention not to take any renewed lease. The renewed lease will be on the monthly rent to be mutually agreed upon and under and subject to the same covenants, conditions and agreements as are herein contained including the present covenant for renewal.” From the above context, it is made clear that the lease period on the expiration of twenty years will be automatically and without any further act or any of the parties hereinto be renewed for a further term of ten years from the expiration of the said term. At the end of this word a non-obstante clause has been employed carefully to preclude in advance any interpretation contrary to the covenants of the agreement. It runs as under: “(i) unless the lease shall prior to the expiration of the last mentioned term (i.e., the term of 20 years) give to the intention not to take any renewed lease. (ii) the renewed lease will be on the monthly rent to be mutually agreed upon and (iii) under and subject to the same covenants, conditions and agreements as are herein contained (iv) including the present covenant for renewal.” 14. With regard to the term “including the present covenant for renewal” Mr. S. Parthasarathy the learned senior counsel for the plaintiffs has clarified the position in the following manner: That it has been specifically covenanted that the renewal clause i.e., another period of 10 years (from the expiration of the term of 20 years) will be on the monthly rent to be mutually agreed upon. But the defendant had not come to a definite understanding with the plaintiffs, with regard to the monthly rent which might be determined for the renewal of lease. 15. But the defendant had not come to a definite understanding with the plaintiffs, with regard to the monthly rent which might be determined for the renewal of lease. 15. The learned senior counsel has also clarified that the term as detailed in “Clause (iv)” herein above did not mean that the defendant has been authorised or given authority to renew the lease automatically for an another period of 10 years from the expiration of the last mentioned term of 20 years. He has therefore, urged before this court that the contention projected on behalf of the defendant that the lease term i.e., initial period of 20 years, renewal period of 10 years and another renewal period of 10 years which would expire in the year 2012 is absolutely baseless, unfounded and that the isolated term i.e., including the present covenants for renewal would not per se substantially improve the prospect of new life of another 10 years beyond the period of 20 years. 16. Relating to the above context this court would like to quote the following legal maxim which, this court finds, may be fitted with fair congruence with Clause I(j) of Ex.A2 lease agreement. Legal Maxim-Ex antecedenitbus et consequentibus fit optima interpretatio It gives the meaning that “a passage will be best interpreted by reference to that which precedes and follows it. The best interpretation is made from the context. The context is to be considered in interpreting any phrase or clause, and not the mere isolated phrase or clause (Ex praecedentibes et consequentibus optima fit interpretatio). 17. It is an important rule of construction, that the meaning of parties to a particular instrument should be collected ex antecedentibus et consequentibus; that is to say, every part of it should be brought into action, in order to collect from the whole one uniform and consistent sense, if that may be done (Per Lord Allenborough, Barton v. Fitzgerald, 15 East 541; 13 R.R.519); or, in the other words, the construction must be made upon the entire instrument, and not merely upon disjointed parts of it (Lord North v. Bishop of Ely, cited 1 Bulst. 101; Doe v. Meyrick, 2 Cr. & J. 230; 37 R.R. 687). 101; Doe v. Meyrick, 2 Cr. & J. 230; 37 R.R. 687). The whole context must be considered in endeavouring to collect the intention of the parties although the immediate object of inquiry be the meaning of an isolated clause (Coles v. Hulme, 8 B. & C 568; 32 R.R. 486). In short, the law will judge of a deed or other instrument, consisting of divers parts or clauses, by looking at the whole; and will give to each part its proper office, so as to ascertain and carry out the intention of the parties (Hobart, 275; Doe v. Guest, 15 M. & W. 160). 18. It may also be relevant to note here that the recital of the lease agreement (A2) may be looked into in it’s entirety in order to ascertain the meaning of the parties. This principle is laid down in Marquis of Cholmondeley v. Lord Clinton 2 B. & Ald. 625; 4: Bligh, 1;21 R.R.419. 19. In Walsh v. Trevanion, 15 Q.B. 751 it is held that; “Where the words in the operative part of a deed are clear and unambiguous, they cannot be controlled by the recitals or other parts of the deed; but where those words are of a doubtful meaning, the recitals and other parts of the deed may be used as a test to discover the intention of the parties and to fix the true meaning of those words.” 20. Per Lord Hers-chell, 14A pp. Cas.506; in construing a statute, it is the established rule that the intention of the law giver and the meaning of the law are to be ascertained by viewing the whole and every part of the act. 21. In Provash Chandra Dalui vs. Biswanath Banerjee, reported in 1989 Supp.(1) SCC 487, the Apex Court has employed the above quoted legal maxim viz., ex antecedentibus et consequentibus. The Apex Court has also made a distinction between the terms ‘Extension’ and ‘Renewal’ in the following manner: “To extend means to enlarge, expand, lengthen, prolong, to carry out further than its original limit. Extension ordinarily implies the continued existence of something to be extended. The distinction between ‘extension’ and ‘renewal’ is chiefly that in the case of renewal, a new lease is required, while in the case of extension the same lease continues in force during additional period by the performance of the stipulated act. Extension ordinarily implies the continued existence of something to be extended. The distinction between ‘extension’ and ‘renewal’ is chiefly that in the case of renewal, a new lease is required, while in the case of extension the same lease continues in force during additional period by the performance of the stipulated act. In other words, the word ‘extension’ when used in its proper and usual sense in connection with a lease means a prolongation of the lease.” 22. This court has also meticulously analysed the testimonies of DW 1 and DW 2. DW 1 is the Senior Manager Retail Sales of the defendant company whereas DW 2 is the Chief Manager Retail Sales. 23. DW 1 in his cross-examination has admitted that the initial period of lease as per Ex.A2 is for 20 years and this period was expired on 30.01.1992. He has also admitted that after the expiry of 20 years i.e., after 31.05.1992, the suit property was not returned to the plaintiffs. He has also deposed that an automatic renewal clause had been incorporated in the lease agreement and that the automatic renewal period of another 10 years was expired on 31.05.2002. Even after 31.05.2002, he has specifically admitted that the demised property was not returned to the plaintiffs. He has also fairly deposed that after the initial lease period of 20 years another automatic renewal period of 10 years was the correct stipulation. DW 2 being the Chief Manager Retail sales of the defendant company is not able to identify as to which clause of the agreement gives entitlement to the defendant to remain in the suit property as lessee beyond the year 2002. 24. The trial court on appreciation of evidences available on record has clearly found that it could not find any specific clause for the automatic renewal of lease for another period of 20 years from 01.06.1992 which was wrongly mentioned in the written statement by the defendant. 25. Ex.A3 is the letter dated 05.02.1992 addressed to the second plaintiff by the defendant wherein the defendant has stated that the site was leased out to the defendant for the development of retail outlet (petrol bunk) for a period of 20 years from 01.06.1972. The lease in respect of this RO (retail outlet) expires on 31.05.1992. 25. Ex.A3 is the letter dated 05.02.1992 addressed to the second plaintiff by the defendant wherein the defendant has stated that the site was leased out to the defendant for the development of retail outlet (petrol bunk) for a period of 20 years from 01.06.1972. The lease in respect of this RO (retail outlet) expires on 31.05.1992. It is further stated that, “as we are keen to renew the lease for a further period of 20 years, we would like to have a fresh offer from you for renewal of lease. On receipt of your offer further action will be taken by us.” 26. From the Ex.A3 letter this court understands that the defendant has admitted that the lease period was expired on 31.05.1992 and the defendant had also expressed their desire to renew the lease for a further period of 20 years. Therefore, the defendant had sought for a fresh offer from the plaintiffs for renewal of lease. 27. Ex.A4, is the reply dated 25.02.1992 given by the plaintiffs to the defendant wherein the plaintiffs have stated that they would like to confirm that they had decided to terminate the lease of their site with effect from 31.05.1992 i.e. with effect from the date of expiry. The plaintiffs have also informed to the defendant that the lease would not be renewed and hence the defendant was requested to make necessary arrangement to return the demised property. 28. Ex.A5 is the another letter dated 05.05.1992 addressed to the Principal of the Indian Institute of Engineering Technology i.e. the second plaintiff by the defendant wherein the defendant has admitted the receipt of the letter dated 25.02.1992 (Ex.A4) conveying the decision of the management not to renew the lease with effect from 31.05.1992. In the last paragraph the defendant has stated that the lease deed dated 18.07.1972 executed between the plaintiffs and the defendant corporation provides for further renewal of lease and therefore, the defendant had requested the plaintiffs to inform the time and date convenient time to the plaintiffs so that the defendant’s representative could meet the plaintiffs and a fresh lease deed could be presented for execution and registration thereof. 29. But the materials available on record do not have any reference to show as to whether the representative of the defendant’s corporation had met the plaintiffs and discussed about the fresh lease. 30. 29. But the materials available on record do not have any reference to show as to whether the representative of the defendant’s corporation had met the plaintiffs and discussed about the fresh lease. 30. Ex.A6 is another letter dated 17.06.1992 titled as “Renewal of land lease agreement” wherein the defendant has stated that they were aware fully that the lease in respect of the site was expired on 31.05.1992 and they have also stated that there is a clause in the earlier agreement that the lease is renewed automatically for a mutually agreed terms for a further period of 10 years. In the third paragraph the defendant has stated that they had already informed the plaintiffs vide their letter dated 08.06.1992 that they were interested for renewal of lease and that a committee was being constituted by them to discuss with the plaintiffs to fix the rental, based on the offer given by them vide their letter dated 26.06.1992. 31. Ex.A7 is the legal notice dated 23.03.1993 appears to have been issued by the plaintiffs through their lawyer wherein the defendant was reminded about the letter dated 26.05.1992 written by the plaintiffs informing the defendant about their inability to renew their lease in their favour. 32. It has also been stated that though the defendant has communicated several letters expressing their desire for renewal of the lease and that they would be constituting a committee to discuss with the plaintiffs to finalise the rental terms, nothing was happened and therefore, the defendant was called upon to quit with the end of 31.05.1993 and deliver the vacant possession from 01.06.1993. It is also stated that on and from 01.06.1992 the possession of the defendant is that of a trespasser and the defendant was liable to pay at the rate of 60,000/- per month from June 1993 as damages for use and occupation. It is also revealed from Ex.A7 the legal notice dated 23.03.1993 that the tenancy was determined and the defendant was put under notice to quit the suit property with the end of 31.05.1993 and deliver vacant possession on 01.06.1993. It is also revealed that the possession of the defendant on and from 01.06.1993 is unlawful and that from 01.06.1992 the conduct of the defendant has been described as rank trespasser. 33. It is also revealed that the possession of the defendant on and from 01.06.1993 is unlawful and that from 01.06.1992 the conduct of the defendant has been described as rank trespasser. 33. But even after this notice, the possession was not surrendered to the plaintiffs, instead the defendant had chosen to issue a reply dated 11.05.1993 to the plaintiffs’ lawyer. 34. Referring Clause I(j) of the lease agreement which provides for further renewal the defendant in his reply dated 11.05.1993 has stated that it is not correct to state that on and from 01.06.1992 their possession is that of a trespassers and that they are liable to pay at the rate of Rs.60,000/- per month as damages for use and occupation. 35. It also appears from Ex.A9 the reply given by the plaintiffs to the defendant dated 29.01.1998 that though there is a clause in the lease agreement, that clause is neither valid nor enforceable in law and only offends the rule of perpetuity. It is also stated that there is no mutuality in the said clause and there was no consensus ad idem on the monthly rent to be paid between the parties and therefore that clause in the agreement is not valid in the eye of law. The plaintiffs have also referred the letter of the defendant dated 05.02.1992 wherein the defendant has requested to renew the lease for a further period of 20 years on fresh terms, and in this connection the plaintiffs have stated that the defendant had given up a lease fully realising that the said clause is enforceable in lease and thereafter, there was no agreement between the plaintiffs and the defendant about the period of lease, rent and other conditions in respect of the schedule mentioned property. The defendant was also informed that from the date of expiry of the said lease period i.e., from 31.05.1992, the defendant has no locus standi to continue in possession of the scheduled mentioned property. 36. Ex.A10 is the reply given by the defendant through their lawyer to the plaintiffs. 37. Ex.B7 is the letter written by the defendant dated 31.12.1992 to the second plaintiff expressing their regret that they could not approach for negotiation with regard to the term of lease due to some unavoidable circumstances. 38. 36. Ex.A10 is the reply given by the defendant through their lawyer to the plaintiffs. 37. Ex.B7 is the letter written by the defendant dated 31.12.1992 to the second plaintiff expressing their regret that they could not approach for negotiation with regard to the term of lease due to some unavoidable circumstances. 38. As seen from Ex.B series, several communications were taken place between the plaintiffs and the defendant but as rightly informed by the plaintiffs in their legal notice under Ex.A7 even after passing of several months, the defendant did not care to do anything to get the lease renewed after 31.05.1992 and therefore, it was declared in Ex.A7 that the tenancy was expired on 31.05.1992 and it was also duly determined that the defendant was instructed or put under notice to quite the demised suit property with the end of 31.05.1993 and deliver vacant possession on 01.06.1993. The plaintiffs have also stated that on and from 01.06.1992, the defendant as a trespasser and hence, the defendant is liable to pay at the rate of Rs.60,000/- per month as damages for use and occupation. 39. In this connection it may be quite relevant to refer Section 105 of Transfer of Property Act, Wherein the term lease has been defined. It reads as follows; “Section 195-Lease defined.- A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent defined.- The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.” 40. In this regard this court finds that it may be more relevant to refer the decision in Bhagat Ram and Others vs. Keshav Deo and others reported in AIR 1965 Assam and Nagaland 55 (V 52 C 23) wherein the following proposition of law has been laid down; “Mere renewal clause does not create a fresh lease.” 41. In this regard this court finds that it may be more relevant to refer the decision in Bhagat Ram and Others vs. Keshav Deo and others reported in AIR 1965 Assam and Nagaland 55 (V 52 C 23) wherein the following proposition of law has been laid down; “Mere renewal clause does not create a fresh lease.” 41. This court also would like to place reliance upon an another decision in Gulam Nabi Zarkob vs. Gulam Rasool and Ors. reported in AIR 1986 J & K 8. In this case the following question is answered; “Where the lease provides for a definite period of tenancy with the stipulation that on expiry of this period, the lessee even without the consent of lessor, will have the option to continue in possession of leasehold on payment of enhanced rate of rent, and the lessee in fact, continues in possession of the leased property after the expiry of this period whether such a lease is governed by Section 111 Clause (a) of the T.P. Act.” 42. This question has been answered in the affirmative by the Jammu and Kashmir High Court. It is alleged that this cannot be termed as renewal clause because his liability to pay enhanced rent is dependant on his possession without the permission of the lessor. For renewal clause lessor must be a party and the renewal clause is to be bilateral and it cannot be unilateral. This clause only safeguards the interests of the lessor to receive amount from the lessee in lieu of the use and occupation of the premises if such lessee continues to be in possession of the premises after the expiry of the lease without the permission of the landlord. Lessee under this clause in the lease deed is also obliged to execute a lease deed with the lessor in a case he wants to hold the possession of the premises as a tenant. Lessor has no obligation to respond to the request of the lessee in connection with the execution of a fresh lease deed. So the lessee cannot remain in possession of the premises without execution of the lease deed after the expiry of the lease period. 43. It is also held that therefore, under Section 111(a) of the Transfer of Property Act, the lessee is liable to be evicted as his tenancy has been determined by efflux of time. 44. So the lessee cannot remain in possession of the premises without execution of the lease deed after the expiry of the lease period. 43. It is also held that therefore, under Section 111(a) of the Transfer of Property Act, the lessee is liable to be evicted as his tenancy has been determined by efflux of time. 44. Ex.B12 is the minutes of preliminary discussions held between the plaintiffs and the defendant. It contains the name of the persons of both sides, who were participated in the preliminary discussions held on 21.05.1993. 45. It appears from Ex.B12 that the primary object of the meeting was to request I.O.C. (Indian Oil Corporation) to surrender the site to institution as the land was very badly required by them for expanding the activities of the institution. The last paragraph of Ex.B12 discloses that the meeting was ended with the principal requesting I.O.C., to consider the need of the institution for the additional land as a service to education. 46. Ex.B13 is the letter dated 03.06.1993 written by the plaintiffs to the Chief Divisional Manager, Indian Oil Corporation. It reveals that during the course of discussion, as it appears from Ex.B12, the plaintiffs were informed that the defendant would like the lease, which had already expired to be renewed. But through the above letter viz., Ex.B13, the plaintiffs have expressed their desire as follows: i. the land under lease is required for us for our own use almost immediately, ii. the land will be put to use for bettering as well as to meet the immediate needs of education, approved and genuine colleges in the campus, iii. we have no intention of giving the piece of land to any other party/organisation on lease or for sale either now or in future. iv. ours is a public charitable educational trust and we have a large number of students whose immediate needs are our responsibility to meet. 47. The plaintiffs have also expressed their inability to consider the request of the defendant for renewal of the lease. Through this letter, the plaintiffs have also urged the defendant to hand over the piece of land in the interests of good cause. 48. Mr. S. Parthasarathy, learned senior counsel appearing for Mr. 47. The plaintiffs have also expressed their inability to consider the request of the defendant for renewal of the lease. Through this letter, the plaintiffs have also urged the defendant to hand over the piece of land in the interests of good cause. 48. Mr. S. Parthasarathy, learned senior counsel appearing for Mr. N. Damodaran, learned counsel, who is on record for the respondents has adverted to that fortunately the plaintiffs’ ownership of the land has not been disputed by the defendant and with regard to the possession of the suit property by the defendant, he would submit that it is unauthorised and illegal and there is no relationship of landlord and tenant after 1992. He has also maintained that the plea of renewal of tenancy for a further period of ten years has not been established by the defendant and therefore the trial Court’s conclusion did not require any interference. 49. In support of his contention, he has placed reliance on the following decisions: i. C. Albert Morris vs. K. Chandrasekaran and others, reported in 2006-1-L.W.521. ii. Provash Chandra Dalui vs. Biswanath Banerjee, reported in 1989 Supp. (1) SCC 487, iii. Hindustan Petroleum Corporation Ltd., vs. Devaraj Chordia, reported in 2005 (2) CTC 401 , and iv. Shanti Prasad Devi and another vs. Shankar Mahto and others, reported in (2005) 5 SCC 543 = 2005-3-L.W.716. 50. In the first decision viz., C. Albert Morris vs. K. Chandrasekaran and others, reported in 2006-1.L.W.521, the Apex Court has held that: “Any right which the dealer has over his site was the right which he had acquired in terms of the lease. When that lease expired and when the landlord declined to renew the same and also called upon the erstwhile tenant to surrender possession, the erstwhile lessee could no longer assert that he had any right to the site. His continued occupation of something which he had no right to occupy cannot be regarded as source of a right to the land of which he himself was not in lawful possession.” It is also held that: “Possession of this site by the erstwhile lessee does not ripen into a lawful possession merely because the landlord did not proceed with the suit for ejectment at that time, but reserved the right to bring such a suit at a later point of time. That cannot amount to an assent on his part to the continued occupation of the landlord under cover of a right asserted by the erstwhile lessee.” 51. In the third decision, viz., Hindustan Petroleum Corporation Ltd., vs. Devaraj Chordia, reported in 2005 (2) CTC 401 , the Division Bench of this Court has whipped the Hindustan Petroleum Corporation Ltd., by observing that: “We are deeply distressed by the facts of this case. The appellant is a Public Sector Corporation and therefore was expected to behave like an ideal person, but in this case we find that it has been illegally retaining possession of the property in dispute for 16 years after 1989 when its lease had admittedly come to an end. These days, unfortunately, some people are illegally holding on to the property over which they have no right to continue in possession once the period of the lease or grant ceases to exist. This is most improper and cannot be appreciated by this Court, particularly since the appellant which is a Public Sector Undertaking must know how to respect the law. 52. In the fourth decision viz., Shanti Prasad Devi and another vs. Shankar Mahto and others, reported in (2005) 5 SCC 543 , the Apex Court while dealing with the applicability of Section 116 of the Transfer of Property Act, 1882, has held that: “Mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying ‘assent’ to the continuance of the lessee even after expiry of lease period.” 53. In the above case, the agreement of renewal contained in clause (7) read with clause (9) of the lease deed required fulfillment of two conditions; first, the exercise of option of renewal by the lessee before the expiry of original period of lease, and second, fixation of terms and conditions for the renewed period of lease by mutual consent and in absence thereof through the mediation of local mukhia or panchas of the village. In this connection, the Apex Court has held that “The aforesaid renewal clauses (7) and (9) in the agreement of lease clearly fell within the expression ‘agreement to the contrary’ use in Section 116 of the Transfer of Property Act. In this connection, the Apex Court has held that “The aforesaid renewal clauses (7) and (9) in the agreement of lease clearly fell within the expression ‘agreement to the contrary’ use in Section 116 of the Transfer of Property Act. On expiry of period of lease, mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying ‘assent’ to the continuance of the lessee even after expiry of lease period. To the legal notice seeking renewal of the lease, the lessor gave no reply. Thus, the lessor in the present case had neither expressly nor impliedly agreed for renewal. In the face of specific clauses (7) and (9) for seeking renewal there could be no implied renewal by ‘holding over’ on mere acceptance of the rent offered by the lessee. Moreover, in the instance, option of renewal was not exercised in accordance with the terms of renewal clause, that is, before the expiry of lease. It was exercised after expiry of lease and the lessee continued to remain in use and occupation of the leased premises. The rent offered was accepted by the lessor for the period the lessee overstayed on the leased premises. The lessee, in the above circumstances, could not claim that he was ‘holding over’ as a lessee within the meaning of Section 116 of the Transfer of Property Act.” 54. On coming to the instant case on hand, it is pertinent to note here that in Ex.A9, the reply given by the plaintiffs to the defendants dated 29.01.1998, they have stated that though there is a clause in the lease agreement for renewal, the clause is neither valid nor enforcible in law and only offends the rule of perpetuity. 55. In this connection it may be appropriate to extract Section 14 of The Transfer of Property Act 1882. The rule against perpetuity has been embodied under Section 14. It reads as follows: “No transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.” 56. In so far as the application of the rule against perpetuity is concerned, this court is of view that Section 14 of The Transfer of Property Act would not be made applicable to the instant case on hand. The test to determine whether a covenant offends the rule against perpetuities is, does the contract confer upon one of the parties an interest in immovable property, or does it not? If it does, then the interest which is to arise as the result of the contract must be one which will arise within the prescribed limits. Thus, since the instant case is relating to the lease of the suit property and an option is given to the lessor (plaintiff) to determine the lease and take possession of the leasehold land under specified conditions there is merely a personal covenant and does not create any interest in land so as to offend against the rule of perpetuities. 57. Secondly, the stipulation relating to renewal can also not be regarded as transferring property or any rights therein. Section 14 of the Transfer of Property Act is applicable only where there is transfer of property. Therefore, the clause containing the option to get the lease on the expiry of 20 years can, by no means be regarded as creating an interest in property of the nature that would fall within the ambit of Section 14. Even on the footing that the clauses relating to renewal in the lease, contain covenants running with the land, the rule against perpetuity contained in Section 14 of the Act would not be applicable as no interest in property has been created of the nature contemplated by that provision. 58. The above proposition of law has been laid down in R. Kempraj v. M/s. Barton Son and Co. reported in AIR 1970 SC 1872 : (1969) 2 SCWR 410 : (1969) 2 SCC 594 : (1970) 1 SCJ 905 : (1970) 2 SCR 140 and Ganesh Sonar v. Purnendu Narayan Singha reported in AIR 1962 Pat 201 . 59. In the present case it is manifested from various communications exchanged between the plaintiffs and defendants that the plaintiffs have expressed their inability to renew the lease in favour of the defendant. It is also manifested that the plaintiffs have also demanded enhanced rent if really the defendant was interested on renewing the lease. 59. In the present case it is manifested from various communications exchanged between the plaintiffs and defendants that the plaintiffs have expressed their inability to renew the lease in favour of the defendant. It is also manifested that the plaintiffs have also demanded enhanced rent if really the defendant was interested on renewing the lease. Though the defendant had been writing so many letters to the plaintiff saying that he was interested in the renewal of the lease and also to finalise the rental terms, the defendants had not evinced any interest in pursuing the matter further. Therefore, the plaintiffs had ultimately issued a notice under Ex.A7 determining the tenancy with the end of 31.05.1992 and the defendant was also put under notice to quite the suit property with the end of 31.05.1993 and deliver vacant possession on 01.06.1993. It has also been stated that the possession of the defendant in respect of the demised premises on and from 01.06.1992 is that of a trespassers and therefore, the defendant was directed to pay the damages at the rate of Rs.60,000/-per mensum from June 1992 for use and occupation. Even after this notice the defendant had not responded. 60. As revealed from the lease agreement particularly from Clause I(j), the renewed lease will be on the monthly rent to be mutually agreed upon and under and subject to the same covenants, conditions. It is palpable that the plaintiffs have not agreed for the renewal of the lease for a further period of 10 years after the ending of original lease period of 20 years. The plaintiffs have also not given consent for the defendant to continue in the possession and therefore, it is obvious to note here that the possession of the defendants in respect of the suit property after 01.06.1992 is wrongful and he is liable to pay damages for the use and occupation. 61. This court has closely scrutinised the oral and documentary evidences available on record. As observed earlier the mere renewal clause which find a place in Clause I(j) of the lease agreement, (Ex.A2) does not create a fresh lease. Keeping in view of this fact this court does not find any infirmity in the judgment of the trial court and therefore, this court is of considered view that the appeal is liable to be dismissed as devoid of merits. Keeping in view of this fact this court does not find any infirmity in the judgment of the trial court and therefore, this court is of considered view that the appeal is liable to be dismissed as devoid of merits. Hence the defendant is liable to be evicted as his tenancy has been terminated by efflux of time as contemplated under Section 111(a) of The Transfer of Property Act. 62. In the result, the appeal is dismissed with costs. The Judgment and decree dated 17.07.2008 and made in O.S.No.5000 of 2007, on the file of the learned VI Additional Judge, City Civil Court, Chennai are confirmed. Two months time is granted for delivery of possession.