Tag Archives: Rent Law

Once Lease or Tenancy Stands Determined – Tenant’s Right to Possess the Leased Property Ends

In Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705, the Hon’ble Supreme Court observed that “the litigation goes on for an unreasonable length of time and the tenants in possession of the premises do not miss any opportunity of filing appeals or revisions so long as they can thereby afford to perpetuate the life of litigation and continue in occupation of the premises.” It has, then, observed that once the lease or tenancy stands determined, say, through a decree from a competent court, the tenant’s right to continue to possess the leased property ends. And for his continued use and occupation of the property for any period thereafter, he must pay damages at the rate the landlord could have let out the premises if there had been no tenant or the tenant had vacated with the lease termination. Thus, Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., (2005) 1 SCC 705 has summed up the principles of interim compensation:

(1) while passing an order of stay under Rule 5 of Order 41 of the Code of Civil Procedure, 1908, the appellate Court does have jurisdiction to put the applicant on such reasonable terms as would in its opinion reasonably compensate the decree-holder for loss occasioned by delay in execution of decree by the grant of stay order, in the event of the appeal being dismissed and in so far as those proceedings are concerned. Such terms, needless to say, shall be reasonable;

(2) in case of premises governed by the provisions of the Delhi Rent Control Act, 1958, in view of the definition of tenant contained in clause (l) of Section 2 of the Act, the tenancy does not stand terminated merely by its termination under the general law; it terminates with the passing of the decree for eviction. With effect from that date, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree; (3) the doctrine of merger does not have the effect of postponing the date of termination of tenancy merely because the decree of eviction stands merged in the decree passed by the superior forum at a later date. Ishwarlal Vrajlal Mistry v. Manohar U. Shetty, Writ Petition No. 13100 of 2018 decided on 18.12.2019.

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Nature of Structure

No hard and fast rule can be prescribed for determining what is permanent or what is not. The use of the word “permanent” in Section 108(p) of the Transfer of Property Act, 1882 is meant to distinguish the structure from what is temporary. The term permanent does not mean that the structure must last forever. A structure that lasts till the end of the tenancy can be treated as a permanent structure. The intention of the party putting up the structure is important for determining whether it is permanent or temporary. The nature and extent of the structure is similarly an important circumstance for deciding whether the structure is permanent or temporary within the meaning of Section 108(p) of the Transfer of Property Act. Removability of the structure without causing any damage to the building is yet another test that can be applied while deciding the nature of the structure. So also the durability of the structure and the material used for erection of the same will help in deciding whether the structure is permanent or temporary. Lastly, the purpose for which the structure is intended is also an important factor that cannot be ignored. Hindustan Petroleum Corporation v. Satish Chandra Jain, 2020 (138) FLR 822.

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Rent Law – Notice Sent Under Postal Certificate

In the case of Sumitra Devi vs. Sampuran Singh (2011) 3 SCC 556, which has been relied upon by learned Senior Counsel for the Appellant, this Court has held that “it will all depend on the facts of each case whether the presumption of service of notice sent under postal certificate should be drawn. It is true that as observed by the Privy Council in its above referred judgment, the presumption would apply with greater force to letters which are sent by registered post, yet, when facts so justify, such presumption is expected to be drawn even in the case of a letter sent under postal certificate.” Considering the facts and circumstances of that case, this Court held the notice sent under certificate of posting to be sufficient service. In the case of Ranju vs. Rekha Ghosh (2007) 14 SCC 81, this court was considering a case where one month’s notice was to be given to the tenant for eviction. After considering the provisions of the relevant Tenancy Act, Transfer of Property Act and the Bengal General Clauses Act, it was held that “clause (6) provides mere “one month’s notice”; in such event, the said notice can be served in any manner and it cannot be claimed that the same should be served only by registered post with acknowledgement due.” In the facts of that case, it was held that service of notice sent under certificate of posting was sufficient. Similar is the case at hand, where the Act provides for that ‘the landlord has given a notice…’, without specifying the mode of such notice, and in the facts of the present case, notice sent under postal certificate has rightly been held to be proper service. While considering a case of service of notice under the Companies Act, this Court, in the case of V.S. Krishnan vs. Westfort Hi­Tech Hospitals (2008) 3 SCC 363, has held that service of notice sent under certificate of posting would be sufficient where “there are materials to show that notices were sent, the burden is on the addressee to rebut the statutory presumption.”

From the perusal of the aforesaid Proviso to the Section 21(1) (b) of Uttar Pradesh (Regulation of Letting, Rent and Eviction) Act, 1972, it is clear that no particular mode of giving notice by the landlord to the tenant has been provided for, meaning thereby that the same could be given orally or in writing; and if in writing, it is not necessary that it should be sent only by registered post. What is required is that “the landlord has given a notice in that behalf to the tenant”. Mohd. Asif Naseer v. West Watch Company, Civil Appeal No. 2375 of 2020 (Arising Out of SLP (C) No. 29649 of 2016).

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Possession of Agent – Is Possession of Principal

In Smt. Chandrakantaben v. Vadilal Bapalal Modi,  (1989) 2 SCC 630, the Hon’ble Supreme Court has held that the possession of the agent is the possession of the principal and in view of the fiduciary relationship he cannot be permitted to claim his own possession. Thus, the agent is an extended hand of principal.         Thus, an agent who receives property or money from or for his principal obtains no interest for himself in the property. An agent holds the principal’s property only on behalf of the principal. He acquires no interest for himself in such property. He cannot deny principal’s title to property. Nor he can convert it into any other kind or use. His possession is the possession of the principal for all purposes. The agent has no possession of his own. Caretaker’s possession is the possession of the principal. The possession of the agent is the possession of the principal and in view of the fiduciary relationship he cannot be permitted to claim his own possession. Thus agent is the extended hand of principal. Dr. Vishwanath Mishra v. XIIIth Additional District Judge, 2020 (138) ALR 159.

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Roof – Not a Necessary and Indispensable Adjunct for a Building

From a bare perusal of the definition of “building” in Section 3(i) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, it is clear that unless the context otherwise requires, “building” means a residential or non-residential roofed structure and includes any land (including any garden), garages and out houses, appurtenant to such building; any furniture supplied by the landlord for use in such building and any fittings and fixtures affixed to such building for the more beneficial enjoyment thereof. As held by the Hon’ble Supreme Court in Ashok Kapil v. Sana Ullah, (1996) 6 SCC 342 a structure or edifice enclosing a space within its walls and usually but not necessarily, covered with a roof is a building. Roof is not necessary and indispensable adjunct for a building because there can be roofless buildings. The “building” as defined in Section 3(i) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, is a residential or non-residential roofed structure and includes any land (including any garden), garages and out-houses, appurtenant to such building. Therefore, an open land including any garden, garages and out-houses, appurtenant to a roofed structure for its beneficial enjoyment shall be a building within the meaning of Section 3(i) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972. Munnu Yadavi v. Ram Kumar Yadav, 2020 (138) ALR 70.   

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Second Notice – A New Tenancy Cannot be Inferred

In Sarup Singh Gupta v. S. Jagdish Singh, (2006) 4 SCC 205, it was held as under:

       “In the instant case, two notices to quit were given on 10th February, 1979 and 17th March, 1979. The suit was filed on June 2, 1979. The tenant offered and the landlord accepted the rent for the months of April, May and thereafter. The question is whether this by itself constitutes an act on the part of the landlord showing an intention to treat the lease as subsisting. Mere acceptance of rent did not by itself constitute an act of the nature envisaged by Section 113, Transfer of Property Act showing an intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted rent which was being paid to him by the tenant. It cannot therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the practice followed by courts is to permit the landlord to receive each month by way of compensation for the use and occupation of the premises, an amount equal to the monthly rent payable by the tenant. It cannot, therefore, be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so intended.”

       In the Judgment rendered by Orissa High Court in Bhagabat Patnaik v. Madhusudan Panda, AIR 1965 Ori 11, Section 113 has been interpreted to hold that since a valid notice to quit a lease or to determine a tenancy cannot be waived without the assent of the landlord and the tenant both, the question as to whether such facts and circumstances of the case. An English Authority in Lawenthanfal v. Banhoute, 1947 (1) ALL ER 116, was quoted to say that a new tenancy cannot be inferred on the issuance of second notice. It is in this context that it was observed that a “subsequent notice to quit is of no effect.” It was held that a tenancy is not revived by anything short of a new tenancy and in order to create a new tenancy there must be an express or implied agreement to that effect.

       The mere fact that the tenant continues in possession and rent is accepted and the suit is not instituted are insufficient circumstances for inferring an intention to create a new tenancy after expiration of the first. It was further held thus:

       “Generally speaking, giving a second notice to quit does not amount to a waiver of a notice previously given unless, with other circumstances, it is the basis for inferring an intention to create a new tenancy after expiration of the first.” Praveen Kumar Jain v. Jagdish Prasad Gupta, 2019 (132) ALR 357.

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Landlord – Cannot be denied Eviction

It is well established that findings on twin issues of bona fide need and comparative hardship are findings of fact. Equally well settled is the proposition that High Court in exercise of it’s jurisdiction under Article 226 of the Constitution of India does not interfere with the findings of fact unless it is demonstrated that the same is vitiated by manifest error of law or is patently perverse or based on non consideration or misreading of any material piece of evidence.
No doubt whenever a decree of eviction is passed against a tenant he shall suffer hardship but the same by itself cannot constitute hardship of greater degree so as to refuse the landlord a decree for eviction. The owner of a property cannot be denied eviction and compelled to live poorly and without a decent livelihood merely to enable the tenant to carry on his flourishing business activity. Shrawan Kumar and Another v. Rajat Verma, 2013 (5) AWC 4771.

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