A.p. Bhangale, J.@mdashRule returnable forthwith. Heard finally by the consent of the learned Counsel for the respective parties.
2. Petitioner has questioned the Judgment and Order, dt. 1.2.2014 passed by the Ad-hoc District Judge-3, Nagpur in Regular Civil Appeal No. 431 of 2011 and the Judgment and Order, dt. 5.9.2011 passed by the Additional Judge, Small Causes Court at Nagpur in Regular Civil Suit No. 30 of 2007. The suit was instituted on 22.1.2007. The said suit was decreed and the counterclaim was dismissed. The petitioner prayed to decree the counterclaim made by him on 12.2.2009.
3. The facts, briefly stated, are as under :-
Under the Lease deed, dt. 12.3.1993, the suit property (vide Exh. 62) i.e. land admeasuring about 200 feet x 200 feet with structure thereon, out of land Survey No. 171/1 situated at village Bhokhara, in Nagpur (Rural), Sub-District Chhindwara Road was let out to the IBP Co. Ltd. for the period of 10 years of duration with effect from 1.12.1989 to 30.11.1999 for running retail outlet-dealership allotted to M/s. Vikas Motors, a Partnership Firm. The rent agreed was Rs. 1200/- per month for the first five years and Rs. 1500/- for the remaining five years. Dealership of M/s. Vikas Motors was terminated, but the IBP Co. Ltd. continued to run the retail outlet even after termination. The IBP Ltd. Company merged with the petitioner/Company and continued to run the retail outlet. Respondent had accepted rent from the petitioner. On 26.6.2006, the respondent/plaintiff/landlord issued notice of termination of lease calling upon the occupant Petitioner Company to hand over vacant possession of the suit premises to the landlord by 31.7.2006 also on the ground of bona fide need of the landlord to recover the possession. Regular Civil Suit No. 30 of 2007 was filed on 22.1.2007 against the IBP Company for eviction. During pendency of the suit, merger took place of the IBP Co. Ltd. with the Indian Oil Corporation.
4. Notice to quit was issued on 26.6.2006 terminating the tenancy as the tenancy expired on 30.11.1999 and there was no further renewal. The defendants acknowledged it and gave reply 29.7.2006. But they did not hand over possession of the suit property. Hence, the suit for ejectment was instituted for vacant possession of the suit property on the ground of efflux of time and bona fide need for the landlord. The defendant did not dispute that the suit property was let out to the IBP Company Limited on registered lease for the period of ten years with effect from 1.12.1989. The duration of ten years'' period expired on 30.11.1999. Counterclaim was raised for specific performance of contract on the ground that the defendant has right to get renewal of the lease beyond its agreed term under the registered lease document. Direction was sought against the plaintiff that the plaintiff shall execute fresh Lease Deed in favour of defendant no. 4 pursuant to clause (I-5) of the lease, dt. 12.3.1999, for the fresh period of ten years with effect from 1.12.2009. The counterclaim was strongly objected by the plaintiff by filing reply to the counterclaim. The plaintiff contended that defendant no. 1 was the lease holder and not defendant no. 4. After merger of defendant no. 1 with defendant no. 4, it never took any step for renewal of the registered lease and, therefore also, it cannot claim specific performance by merely stepping into the shoes of defendant no. 1 pursuant to merger with defendant no. 1. Defendant nos. 1 and 4 were responsible to hand over vacant possession of the leasehold property on expiry of the lease, particularly when after 30.11.1999, there was no renewal of the lease.
5. The trial Court, upon the evidence led by the parties, held that the lease deed was validly terminated by the legal and valid notice and the landlord has succeeded in establishing his bona fide need. It was further held that hardship would be caused to the plaintiff if the decree, as prayed for, is refused. The trial court also rejected the counterclaim finding that the defendants were not entitled to specific performance of contract, as alleged. DW-1 and 2 representing the defendant/Company admitted in their cross-examination that they had no any knowledge about the contents of lease deed. It was admitted by the DW-1 that the lease period was for ten years expiring on 30.11.1999 and there was no any attempt on the part of the defendants to get the lease renewed beyond 30.11.1999. Sunil Dongare (DW-2) clearly admitted that lease deed was not executed in his presence. Learned trial Judge dealt with recitals of the lease (Exh. 62) and found that the agreement provided for determination of the lease after the period of ten years and it cannot be said that the lease came to be automatically renewed at the instance of the lessee/Defendants. In view of Section 108(q) of the Transfer of Property Act upon determination of the lease, the lessee is bound to put the lessor into possession of the property.
6. The respondent referred to the ruling in the case of
9. In the present Case after expiry of the first 20 years period, though a notice dated 15-9-1992 was given by the defendants, they chose to remain silent till they were served with the notice by the plaintiff on 29-8-2000 terminating the lease. They did not call upon the plaintiff to execute the lease deed for further period of 10 years. Admittedly, there is no registered instrument executed between the parties after expiry of 20 years. It is clear from the very language of Section 107 of the Act 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 a registered instrument. In the absence of registered instrument, it must be monthly lease. In view of the clear provisions of Section 107, in the absence of registered instrument it must be held that it was holding over and not continuation of old tenancy for further period of 10 years. That would be harmonious construction of Section 107 read with Section 116 in the facts of the present case. The tenancy after the first period of 20 years was automatically determined on the expiry of 20 years period which was stipulated in the lease deed. Thereafter the petitioner-lessee continued to hold the property and the lessor accepted the rent. The lease was, therefore, renewed from month to month. The present case is squarely covered by the judgment of the Supreme Court in
10. In the circumstances, I have no hesitation to hold that the tenancy was automatically determined on expiry of 20 years which was stipulated in the lease deed, dated 1.1.1973. Thereafter, the defendant-lessee continued to hold the property. This also will have to be appreciated against the backdrop of the fact that no lease deed, as contemplated in Clause (g) of 1973 lease deed was executed. No terms and conditions were decided as agreed by them in Clause (g) and, therefore, it cannot be stated that the lease continued on the same terms and conditions, as submitted by the appellants. The appeal Court has appreciated this all in proper perspective. In this view of the matter, the submissions of Mr. Walawalkar, learned senior counsel for the appellant has no merit. In the circumstances, I find no substance in the appeal, hence the second appeal fails and dismissed as such.
7. Reliance is also placed upon the ruling in the case of
8. The observations do indicate that when the registered lease deed expired and when the defendant remained silent for to call upon the landlord to renew the lease, the tenant was holding over after expiry of the lease. There is no automatic renewal of the lease. Mutual agreement evidencing renewal of the lease deed, according to law, is necessary. The lease of immovable property worth more than Rs. 100/- has to be executed by a registered instrument/deed.
9. Reference is also made by the petitioner to the ruling in the case of
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, Ninth Edition, 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.
10. The observations, as made above, led the trial Court to decree the suit and to dismiss the counterclaim made by the defendant. The decree in the suit and dismissal of the counterclaim was the only logical, correct and proper conclusion in the facts and circumstances. The defendant did not exercise the option of execution of renewal of lease within the time and as permitted by the lease deed. There is no concept of automatic renewal of the lease deed. Under these circumstances, the Appellate Court had recorded concurrence with the trial Court by its well-reasoned Judgment in order to dismiss the appeal. I do not find any serious infirmity nor any scope for interference in the impugned Judgments requiring any interference with the impugned Judgments in exercise of the extra-ordinary writ jurisdiction. Hence, the Writ Petition is dismissed with costs.
