Prahlad Kumar Tiwari S/o Late Dwarkanath Tiwari v. Steel Authority Of India Ltd. , Bhilai Steel Plant, Through Chief Executive Officer
2023-02-07
GOUTAM BHADURI, N.K.CHANDRAVANSHI
body2023
DigiLaw.ai
JUDGMENT : Goutam Bhaduri, J. Heard. 1. Instant appeal is against the judgement and decree dated 18/05/2018 passed by the 4th Additional District Judge, Durg in Civil Suit No.33-A/2016. 2. A civil suit was filed by the appellant/plaintiff that the amount deposited for renewal of lease under protest of Rs.1772375/- be returned alongwith interest. The plaint allegation would show that the appellant/plaintiff was allotted a land of 1000 sq.ft. of plot No.153 under shop cum residence scheme of Bhilai Steel Plant for 30 years on 30/09/1982. The lease came to an end on 29/09/2012. According to the plaintiff, the lease deed embodied a renewal clause that at the time of expiry, if the renewal option is exercised, that would be further renewed for a period of 30 years subject to enhancement of existing rent which would not be more than 50%. The plaintiff contended that to renew the lease an amount of renewal fees of Rs.1562500/- was demanded alongwith Rs.1,25,000/- as a security deposit. The plaintiff stated that the premium was already paid in the year 1982 as such the respondent cannot demand further amount of fees by way of a renewal and since the plaintiff was facing an ejectment, the amount demanded was paid under protest. 3. Per contra, the respondent/defendant contended that as per clause of the renewal of the lease, the fresh lease would be a renewed lease and not an extended lease and after determination of the lease which has no nexus with the earlier lease and as per the policy of the SAIL, certain amount were fixed which was only 25% to the extent of existing value and according to that policy, fresh amount of premium was asked for. Therefore, the demand so made from the plaintiff is justified. Consequently, the lease was renewed. 4. On the basis of the pleading of the parties, the learned trial court framed four issues. Issue No.1, 2 and 3 which are inter related with each other, the finding of the court was that the plaintiff is not entitled for return of amount of Rs.17,71,875/- which was charged as amount of renewal fees and the security deposit of lease. Being aggrieved by such order, the present appeal. 5. Shri Rajeev Shrivastav, Sr. Advocate assisted by Shri Sourabh Sahu, Advocate for the appellant/plaintiff, would submit that primary facts are undisputed in this case.
Being aggrieved by such order, the present appeal. 5. Shri Rajeev Shrivastav, Sr. Advocate assisted by Shri Sourabh Sahu, Advocate for the appellant/plaintiff, would submit that primary facts are undisputed in this case. He would submit however the definition of 'lease' as defined under Section 105 of the Transfer of Property Act nowhere contemplate that a renewal fees of the like nature can be charged. He would submit that the plaintiff having exercised his option for renewal of the lease prior to six months of the expiry of the earlier existing lease, the lease should have been renewed. He submits that after the period expired, the plaintiff continued in possession and thereafter the demand was made by Ex.P-3 letter dated 31/12/2013. He would further submit that the denomination of word 'fees' would have a direct relation to any service rendered and fees cannot be at par with the tax and therefore the demand contra to section 105 of the Transfer of Property Act cannot be charged specially when the respondent is a state under Article 12 of the Constitution of India. He further placed his reliance in (1980) 1 SCC 416 in between Kewal Krishan Puri & Anr. Vs. State of Punjab & Anr. to submit that the fees is charged for a special service rendered, the renewal fees of lease is not for any service rendered and therefore cannot be justifiable and the payment therefore was made under protest to arrest ejectment. Therefore such illegal recovery is liable to be returned and the suit be decreed. 6. Per contra, Dr. Saurabh Kumar Pande, learned counsel for the respondent/defendant would submit that after expiry of the earlier lease on 29/09/2012, as there were several lease expired in like nature meeting of the officials of the SAIL was conducted. Thereafter a policy decision was taken which is Ex.D-4. According to guide line as per valuation of land premium of the land was fixed which are to be leased. Consequent there upon, the land were evaluated by the third agency and according to market value 25% of the value of the property was agreed to be levied as a premium.
Thereafter a policy decision was taken which is Ex.D-4. According to guide line as per valuation of land premium of the land was fixed which are to be leased. Consequent there upon, the land were evaluated by the third agency and according to market value 25% of the value of the property was agreed to be levied as a premium. He further submits that renewal of the lease and extension of the lease are two different aspect which cannot be put at par and in the instant case, since the renewal was made subsequent to the expiry of earlier lease, it will constitute a fresh lease. He placed his reliance in (2004) 1 SCC 1 in between State of U.P. & ors. Vs. Lalji Tandon (Dead) Through Lrs. and (2015) 8 SCC 655 in between State of West Bengal & ors. Vs. Calcutta Mineral Supply Company Private Limited & Anr. and would submit that order of the learned court below is well merited which do not call for any interference. 7. We have heard learned counsel for the parties and perused the documents. 8. The factual dispute in this case do not exist. Admittedly, the plaintiff/appellant was granted a lease in the year 1982 and the lease deed is filed as Ex.P-1 it was for 30 years which expired on 29/09/2012. Clause 6 of the said lease deed speaks about the renewal of lease which cast a duty upon the lessee to exercise his option for renewal before expiration of lease. For the sake of brevity clause 6 of the earlier lease deed is reproduced hereunder:- “6. If the Lessee wants to retain the demised land for a further term of 30 years, the lessee shall give notice of his intention to do so to the Lessor six months prior to the date of expiry of such period and the Lessor may grant a fresh lease in respect of the land herein demised for a further period of 30 years on the terms and conditions as may be decided by the Lessor.
In case the lessee wants to retain the demised land for a further term of 30 years subsequent to the expiry of the term of the first renewal as above, the lessee shall give notice of his intention to do so six months prior to the date of expiry of the period of such renewal and the lessor may grant a further lease in respect of the land herein demised for a further period of 30 years on the terms and conditions as may be decided by the Lessor.” 9. The plaintiff exercised his option to exercise the renewal of the lease by letter dated 17/10/2011 which is marked as Ex.P-2. Thereafter, it appears that the Steel Authority of India by Ex.P-3 dated 31/12/2013 asked to deposit the lease renewal charges equivalent to 25% of the applicable land premium prevailing on the due date of renewal and Rs.15,62,500/- was demanded apart from the security deposit of Rs.1,25,000/-. The grievance of the plaintiff is that the fees in like nature cannot be charged as fees is always defined to be charged for special service rendered to an individual by some government agency. The plaintiff urged that section 105 of the Transfer of Property Act which defines the lease do not contemplate any payment of the renewal fees of lease. Section 105 of the Transfer of Property Act purports that a lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied in consideration of a price paid or promised and who accepts the transfer on such terms. 10. In respect of renewal of the lease and extension of the lease, the Supreme Court defines the distinction in the matter of State of U.P. & Ors. Vs. Lalji Tandon (Dead) Through Lrs. reported in (2004) 1 SCC 1 and held that where a covenant for renewal exists, its exercise is, of course, a unilateral act of the lessee and the original covenant of renewal and the surrounding circumstances and intention of the parties are required to be seen. It laid down that there is a difference between extension of lease in accordance with the covenant in that regard contained in the principal lease and the renewal of lease and the renewal always would be according to the covenant for lease and which is different from the clause for extension.
It laid down that there is a difference between extension of lease in accordance with the covenant in that regard contained in the principal lease and the renewal of lease and the renewal always would be according to the covenant for lease and which is different from the clause for extension. In para 13 of the judgement the Court held as under:- “13. In India, a lease may be in perpetuity. Neither the Transfer of Property Act nor the general law abhors a lease in perpetuity. (Mulla on The Transfer of Property Act, 9th Edn., 1999, p.1011). Where a covenant for renewal exists, its exercise is, of course, a unilateral act of the lessee, and the consent of the lessor is unnecessary. (Baker v. Merckel (1960) 1 All ER 668, also Mulla, ibid, p.1204). Where the principal lease executed between the parties containing a covenant for renewal, is renewed in accordance with the said covenant, whether the renewed lease shall also contain similar clause for renewal depends on the facts and circumstances of each case regard being had to the intention of the parties as displayed in the original covenant for renewal and the surrounding circumstances. There is a difference between an extension of lease in accordance with the covenant in that regard contained in the principal lease and renewal of lease, again in accordance with the covenant for renewal contained in the original lease. In the case of extension it is not necessary to have a fresh deed of lease executed; as the extension of lease for the term agreed upon shall be a necessary consequence of the clause for extension. However, option for renewal consistently with the covenant for renewal has to be exercised consistently with the terms thereof and, if exercised, a fresh deed of lease shall have to be executed between the parties. Failing the execution of a fresh deed of lease, another lease for a fixed term shall not come into existence though the principal lease in spite of the expiry of the term thereof may continue by holding over for year by year or month by month, as the case may be.” 11. Likewise in the matter of State of West Bengal & Ors. vs. Calcutta Mineral Supply Company Private Limited & Anr.
Likewise in the matter of State of West Bengal & Ors. vs. Calcutta Mineral Supply Company Private Limited & Anr. reported in (2015) 8 SCC 655 the Court held that renewal of lease is a fresh grant where the principal lease executed between the parties containing a clause that the lease shall have to be renewed by giving a fresh grant in accordance with the said clause and fresh grant is always different which would depend on the fresh covenant in the agreement between the parties. The perusal of the renewal clause in the earlier lease deed shows that if the lessee want to get the lease renewed he has to exercise the option before the expiry of six months of the lease. In the instant case, the lease was expiring on 29/09/2012 and the plaintiff exercised his option well before that date prior to six months on 17/10/2011 by Ex.P-2. The facts would show that thereafter the lessee continued in the possession and even after the expiry of the lease on 29/09/2012 he was in possession of the premises by holding over. Therefore, the earlier lease came to an end and the relation of the lessor and lessee got severed. The document placed according to the respondent a policy decision was taken by the SAIL which is filed as Ex.D-4 wherein certain valuation was carried out and charges were agreed to be levied as premium according to the valuation of the property. The evaluation of price was given to an out side agency. 12. Thereafter the renewal lease dated 31/12/2013 was issued much after the expiry of the original lease which expired on 29/09/2012. The letter is marked as Ex.P-3. The clause in the letter shows that the amount was asked for renewal charges equivalent to 25% of the applicable land premium valuation. It goes to show that 25% amount was asked as a premium and offer was extended that if he pays the amount then the lease would be considered for renewal. The plaintiff had paid the amount so demanded and thereafter the lease was renewed. The demand for deposit of the amount though was worded as renewal charges, the circumstances would show it denotes to a premium for a fresh lease to be executed. When the fresh lease is executed the parties cannot fall back to the terms of the original lease deed which already stood expired.
The demand for deposit of the amount though was worded as renewal charges, the circumstances would show it denotes to a premium for a fresh lease to be executed. When the fresh lease is executed the parties cannot fall back to the terms of the original lease deed which already stood expired. The letter dated 31/12/2013 for offer for renewal was issued much after the expiry of lease. In a consequence, the offer given by the respondent was accepted and the plaintiff having paid the amount and got the lease renewed though the payment was under the caption under protest that would not create any right in favour of the plaintiff to get back the amount as circumstances points out the expiry of lease. The plaintiff having paid the amount to get the lease renewed would be estopped to challenge the same on any ground whatsoever. 13. In a result, we are of the view that the judgement of the learned court below do not call for any interference. Accordingly, the appeal is dismissed. 14. A decree be drawn accordingly.