R.S. Ramanathan, J.@mdashThe unsuccessful Defendant is the Appellant.
2. The 1st Respondent/Plaintiff filed a suit for recovery of possession, arrears of rent and for future damages.
3. The case of the 1st Respondent/Plaintiff was that the property belongs to the Respondents and it is a vacant site and the Appellant/Defendant
was introduced as a tenant on 14.03.1975 and the Appellant/Defendant has taken the property on lease for running a timber shop for a monthly
rent of Rs. 125/-and the lease is for a period of 5 years i.e. from 14.03.1975 to 14.03.1980. The lease was renewed for a further period of 5
years and on 14.03.1985, the lease was further renewed on a monthly rent of Rs. 500/-and the Appellant/Defendant was paying the rent upto to
30.05.1991. The Respondents/Plaintiffs required the premises for his own use and occupation and therefore, issued a notice, dated 12.06.1991
calling upon the Appellant to vacate and hand over the possession by the end of 13.07.1991 and the Appellant/Defendant sent a reply stating that
he has constructed a pucca shop by spending more than 5 lakhs and he is entitled to the benefits of Tamil Nadu City Tenants Protection Act and
the notice, dated 12.06.1991 was not valid. A rejoinder was also given by the Respondents/Plaintiffs and as the Appellant/Defendant refused to
vacate the suit premises, the suit was filed for the relief stated above.
4. The Appellant/Defendant contested the suit admitting the tenancy and contended that originally the property was taken on lease for the purpose
of doing business for timber and saw-mill and the property that was let out to him was a vacant land and the Appellant/Defendant spent huge
amount for improving the land and he has constructed a shop in the entire area and he spent more than 5 lakhs for putting up construction and after
taking into the property on lease, he installed a saw-mill and he is carrying on manufacturing process in the premises and therefore, the notice
issued was not proper and he is also entitled to the benefits of Tamil Nadu City Tenant Protection Act.
5. In the trial Court, an Advocate Commissioner was appointed and he has also filed a report about the construction.
6. The trial Court framed the following issues:
01. Whether the Plaintiff is entitled to the relief of recovery of possession, after removing the super structure put up by the Defendant?
02. Whether the Plaintiff is entitled to pay rent at the rate of Rs. 1,000/- from 14.05.1991 to 13.07.1991?
03. Whether the Plaintiff is entitled to damages at the rate of Rs. 910/- from 14.01.1991 till the date of filing?
04. Whether the Plaintiff is entitled to future damages at the rate of Rs. 500/- till delivery of possession by the Defendant?
7. The trial Court held that the Appellant/Defendant did not let in any evidence to prove the expenses incurred by him for putting up a shed and he
has also not produced any proof for the payment of rent. After notice was issued by the 1st Respondent/Plaintiff, No. proof was adduced by the
Appellant/Defendant that manufacturing process is being carried on in the premises and answered the issues in favour of the Plaintiff and decreed
the suit.
8. The Lower Appellate Court also concurred with the findings of the trial Court and also held that No. manufacturing process is being carried on
in the premises and the notice issued was proper and the Appellant/Defendant is only cutting the timber into small pieces and that cannot be
construed as manufacturing process and dismissed the appeal. Hence, this second appeal is filed.
9. The following substantial questions of law were framed at the time of admitting the second appeal.
01. Whether the Courts below are right in shifting the burden on the Appellant,who is the Defendantin the suit which resultedin granting decree for
possession?
02. Whether the Courts below are justified in not appreciating the evidence properly which resulted indecreeing the suit?
03. Whether the Courts below are right in not framing the issue and in giving the findings on the notice of termination issued u/s 106 of Transfer of
Property Act?
04. Whether the Termination notice issued is valid to grant decree for possession?
05. Whether the Courts below are justified in rejecting the Exhibits C-1 and C-2 without reasons, which prove the Defendant''s claim in the
property?
06. Whether the Courts below are right in not considering the pleadings, which give findings against the admissions made in favour of the
Appellant?
10. Heard both sides.
11. Though six substantial questions of law were framed by this Court while admitting the second appeal, having regard to the judgment laid down
by the Hon''ble Supreme Court reported in 2009 (1) LW 1, in the case of State Bank of India and Ors. v. S.N.Goyal, in my opinion, the 4th
substantial question of law is only relevant for consideration in this second appeal.
12. Further, the substantial questions of law as framed at the time of admitting the second appeal, cannot be termed as substantial questions of law
in the light of the aforesaid judgment.
13. In the judgment reported in 2009 (1) LW 1, in the case of State Bank of India and Ors. v. S.N.Goyal, the Hon''ble Supreme Court has
elaborately dealt with, what is substantial question of law, stated as follows:
9.1)What is a substantial question of law?
Second appeals would lie in cases which involve sub stantial questions of law. The word ''substantial''prefixed to''question of law''does not refer to
the stakes involved in the case, nor intended to refer only to questions of law of general importance,but refers to impactor effect of the question of
lawon the decision in the lis between the parties,''Substantial questions of law'' means not only substantial questions of law of generally importance,
but also substantial question of law arising in a case as between the parties. In the context of Section 100 Code of Civil Procedure, any question of
law which affects the final decision in a case is a substantial question of law as between the parties. A question of law which arises incidentally or
collaterally, having No. bearing in the final outcome, will not be a substantial question of law. Where there is a clear and settled enunciation on a
question of law, by this Court or by the High Court concerned, it cannot be said that the case involves a substantial question of law. It is said that a
substantial question of law arises when a question of law, which is not finally settled by this court (or by the concerned High Court so far as the
State is concerned),a rises for consideration in the case.But this statement has to be understood in the correct perspective. Where there is a clear
enunciation of law and the lower court has followed or rightly applied such clear enunciation of law, obviously the case will not be considered as
giving rise to a substantial question of law, even if the question of law may be one of general importance. On the other hand,if there is a clear
enunciation of law by this Court (or by the concerned High Court) but the lower court had ignored or misinter preted or misapplied the same, and
correct application of the law as declared or enunciated by this Court (or the concerned High Court) would have led to a different decision, the
appeal would involve a substantial question of law as between the parties. Even where there is an enunciation of law by this Court (or the
concerned High Court) and the same has been followed by the lower court,If the Appellant is able to persuade the High Court that the enunciated
legal position needs reconsideration, alternation,modification or clarification or that there is a need to resolve an apparent conflict
betweentwoviewpoints,itcan be said that a substantial question of law arises for consideration. There cannot, therefore, be a strait-jacket definition
as to when a substantial question of law a rises in a case.Bethat as itmay.
14. The learned Senior counsel appearing for the Appellant/Defendant also submitted that the only substantial question of law that is arising in the
second appeal is with regard to the validity of the notice issued by the 1st Respondent/Plaintiff and submitted his argument only in respect of that
substantial of law.
15. Mr. M.Venkata chalapathy, the learned Senior Counsel appearing for the Appellant/Defendant submitted that admittedly, the
Appellant/Defendant is running a saw-mill in the suit premises and running a saw-mill as a manufacturing process and notice was given by the 1st
Respondent/Plaintiff granting one month time to the Appellant to vacate the premises as if it is a monthly lease and therefore, there is No. proper
notice issued as per provisions of Section 106 of the Transfer of Property Act and on that ground the suit is liable to be dismissed.
16. In support of his contention, the learned Counsel appearing for the Appellant, relied upon the judgment reported in Idandas Vs. Anant
Ramchandra Phadke (Dead) by Lrs, and AIR 1971 MYS 365 in the case of John Augustine Peter Mirande and Anr. v. N.Datha Naik.
17. On the other hand, Mr. T.P.Sankaran, the learned Counsel appearing for 1st Respondent/Plaintiff submitted that it is admitted by the
Appellant/Defendant in the pleadings that the lease is for running a timber shop and he subsequently, installed a saw-mill and even assuming that
saw-mill is running by the Appellant/Defendant in the suit premises, that will not amount to taking the property on lease for manufacturing purpose
and hence, the lease must be construed as a monthly lease and a valid notice has been given and therefore, the notice issued is proper and the suit
is liable to be decreed and the second appeal is liable to be dismissed.
18. In support of his contention, he relied upon the following judgments:
01. Shri Janki Devi Bhagat Trust, Agra Vs. Ram Swarup Jain (dead) by LRs., .
02.2001 (3) SC 482, in the case of Samir Mukherjee v. Davinder K.Bajajand Ors..
03 P.N. Venkatesa Chettiar Vs. Annamalai Industrial Corporation,
04.1997 (2) MLJ 283, in the case of Food Corporation of India, represented by its Regional Manager, Madras v. The Thiruvalangadu
Agricultural Service Co-operative Society Limited, Thiruvalangadu, Tanjavur.
05. Kishan Chand Vs. Sayeeda Khatoon,
06. Bachulal Sah Vs. Gita Timber Co.,
19. In the judgment reported in Idandas Vs. Anant Ramchandra Phadke (Dead) by Lrs, , the ''phrase'' manufacturing purpose has been dealt with
and the Hon''ble Supreme Court has held that in order to consider the lease one for manufacturing purpose, the following test must be satisfied:
01. That it must be proved that a certain commodity was produced;
02. That the process of production must involve either labour or machinery;
03. That the end product which comes into existence after the manufacturing process is complete, should have a different name and should be
puttoa different use.In other words,the commodity should be so trans formed so as to lose its original character.
Applying the test laid down by the Hon''ble Supreme Court in the above judgment, we will have to see whether the premises is used for
manufacturing purpose.
20. Prior to that, we will have to see whether the property was let out for the purpose of manufacturing purpose. As rightly contended by the
learned Counsel appearing for the 1st Respondent/Plaintiff that the case of the 1st Respondent/Plaintiff was that the Defendant was put in
possession of the property under the registered lease deed, dated 04.03.1975 for running a timber shop and the lease is for a period of five years
from 14.03.1975 upto 14.03.1980 and it was renewable for a further period of five years upto 14.03.1985 and thereafter, it was renewable and
the Defendant/Appellant was paying the rent at the rate of Rs. 500/-from 14.03.1985. The 1st Respondent/Plaintiff has not stated that when the
lease was renewed after 14.03.1985. It is not for any specific term, but it was written and the Appellant/Defendant was paying Rs. 600/-
thereafter.
21. In the statement filed by the Appellant/Defendant, he has stated that the property was taken on lease for the purpose of doing timber business
and saw-mill and immediately after taking the property on lease, the Defendant installed a saw-mill. Thereafter, he applied for electricity connection
from the electricity Board and the Plaintiff/1st Respondent has given consent for the same. Therefore, as per the admission of the
Appellant/Defendant in the written statement that the saw-mill was installed after the property was taken on lease and when the lease was entered
into between the parties, the lease was taken for the purpose of timber shop. In other words, at the time of inception of tenancy, lease was for
running a timber shop and latter, the Appellant/Defendant installed saw-mill and is running a saw-mill in the premises, of-course after getting
consent from the Plaintiff. Though, it is stated in the plaint that the lease is for a period of five years and it was renewed twice, but the lease deed
was not marked. Therefore, in the absence of any lease that was entered into between the parties, we will have to see what is the position of law in
respect of such lease.
22. In the judgment reported in 2001 (3) Sup 482, in the case of Samir Mukherjee v. Davinder K.Bajaj and Ors., the Hon''ble Supreme Court
after relying upon the judgment reported in Shri Janki Devi Bhagat Trust, Agra Vs. Ram Swarup Jain (dead) by LRs., interpreting Sections 106
and 107 of the Transfer of Properties Act, held as follows:
5. Section 106 lays downa rule of construction,whichis to apply when the parties have not specifically agreed up on as tow he ther the lease is
yearly or monthly. On a plain reading of this section it is clear that legislature has classified leases in two categories according to their purposes and
this section would be at tracted to construe the duration of a valid lease in the absence of a contract or local law or usage to the contrary. Where
the parties by a contract have indicated the duration of a lease,this section would not apply. What this section does is to prescribe the duration of
the period of different kinds of leases by legalfiction-leases for agricultural or manu facturing purposes shall be deemed to be lease from year to
year and all other leases shall be deemed to be from month to month. Existence of a valid lease is a pre-requisite to invoke the rule of construction
embodied in Section 106 of Transfer of Property Act.
6. Section 107 prescribes the procedure for execution of a lease between the parties. Under the first paragraph of this section a lease of
immovable property from year to year or for any term exceeding one year or reserving yearly rent can be made only by registered instrument and
remaining classes of leases are governed by the second paragraph that is to say all other leases of immovable property can be made either by
registered instrument or by oral agreement accompanied by delivery of possession.
7. In the case in hand weare concerned with an or allease which is hit by the first paragraph of Section 107 of the Transfer of Property Act. u/s
107 parties have an option to enterin to a lease in respect of an immovable property either for a term less than a year or from year to year, for any
term exceeding one year or reserving a year rent. If they decide upon having a lease in respect of any immovable property from year to year or for
any term exceeding one year,or reserving yearly rent, such a lease has to be only be a registered instrument,in absence of a registered instrument
No. valid lease from year to year or for a term exceeding one year or reserving a yearly rent can be created.If the lease is not avalid lease with in
the meaning of the opening words of Section 106 the rule of construction embodied therein would not be attracted. The above is the legal position
on a harmonious reading of both the sections.
Therefore, even assuming that the Appellant/Defendant has taken the property on lease for manufacturing purpose, as alleged by the
Appellant/Defendant, in the absence of any registered document, as per law laid down by the Hon''ble Supreme Court, the lease must be
construed as a monthly lease and if so construed, the notice issued giving 15 days time is valid.
23. In this case, admittedly the lease deed was not marked and in the absence of any lease deed, the lease must be construed as monthly lease and
notice issued by giving 15 days time was properly valid.
24. As per the tests laid down by the Hon''ble Supreme Court in the judgment reported in Idandas Vs. Anant Ramchandra Phadke (Dead) by Lrs,
., the cutting of wood into pieces cannot be termed as manufacturing process and as the Lower Appellate Court rightly held that after quoting the
passage from H.S. Court''s Transfer of Property Act, 1982 (9th Eduction Vol.II, 1994 (Reprint), in page 1580-1581, mere change brought about
in the size of timber as a result of treatment in the saw mill cannot amount to manufacture.
25. Further, while considering the lease whether it is manufacturing process or not, we will have to see the purpose for which the lease was entered
into initially and the subsequent use of the property by the lessee should not be taken into consideration to decide the nature of lease.
26. In this case, as stated supra, it is admitted by the Defendant that after the property was taken on lease, he installed a saw-mill. Therefore, at the
inception of lease, the lease was only for the purpose of running the timber shop and later on, he used the premises for running a saw-mill, the later
use cannot be taken into consideration to find out the purpose of the lease for which, the property was taken by the Appellant/Defendant.
Therefore, the substantial question of law No. 4 is answered against the Appellant.
27. Hence, in my opinion, the notice issued is proper and both the Courts below have rightly came to the conclusion that the 1st
Respondent/Plaintiff is entitled to recovery of possession and the Appellant/Defendant has not proved that he spent amount for putting up a
superstructure and he has not paid rent to the 1st Respondent/Plaintiff.
28. In the result, the judgments and decrees of the Courts below are confirmed and the second appeal is dismissed. No. costs.
