BHAWANJI LAKHAMSHI V. HIMAT LAL JAMNADAS DANI, AIR 1972 SC 819
FACTS
The Plot with which this case is concerned belonged to one Jamnadas Chhotalal Dani. On November 15, 1948, Jamnadas executed two leases in favour of one Bhawanji Lakhamsi and Maojibhai Jethabhai, Defendants 1 and 2. The subject-matter of the first lease was two plots, the one referred to above and another in the same area measuring 805 square yards. The subject-matter of the second lease was a third plot in the same area.
The leases were for a period of ten years and the rent was Rs. 75 per month. In both the leases there was an option clause which entitled the lessees to surrender the leased property by September 30, 1953. Two plots were surrendered by the lessees on January 15,1951, but the lease in respect of the first plot continued.
Jamnadas died on August 14, 1951, but before his death he had made a gift of the leased property in favour of the three respondents. The lease in respect of the plot concerned was determined on September 30, 1958. But the lessees continued to remain in the possession paying rent at the rate of Rs. 75 per month.
On August 7, 1959, the lessors gave notice purporting to terminate the tenancy by the end of the September 1959. They stated in the notice that the lessees had sub-let the premises and that the lessors required the plot for purpose of putting up construction on it. Since the lessees did not vacate the premises, the lessors filed the suit on October 22, 1959, in the Small Causes Court of Bombay.
PROCEDURAL HISTORY
Trial Court: held that there was no clear evidence of the submitting of the premises, but that the plaintiffs required the plot bona fide for constructing a new building within the meaning of clause (i) of sub-section (1) of Section 13 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947, hereinafter called the Act. The court also held that the tenancy terminated by efflux of time, but that the lessees continued in possession by virtue of the immunity from eviction conferred by the Act and so, they were not holding over within the meaning of Section 116 of the Transfer of Property Act, notwithstanding the fact that rent was accepted by the lessors from month to month after September 30, 1958, and that it was not necessary to give the lessees six month's notice expiring with the end of the year of the tenancy, for terminating that tenancy.
Appellate Court: In appeal, the Full Bench of the Small Causes Court confirmed the decree of the trial court.
It was to quash this decree that petition under Article 227 was filed before the High Court.
ISSUE
Does the acceptance of rent creates a fresh tenancy?
JUDGEMENT
In Ganga Dutt Murarka v. Kartik Chandra Das this Court held that where a contractual tenancy, to which rent control legislation applied, had expired by efflux of time or by determination by notice to quit and the tenant continued in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord had assented to a new contractual tenancy. It was further held that acceptance by the land lord from the tenant, after the contractual tenancy had expired, of amounts equivalent to rent, or amounts which were fixed as standard rent, did not amount to acceptance of rent from a lessee within the meaning of Section 116 of the Transfer of Property Act.
The act of holding over after the expiration of the term does not create a tenancy of any kind. If a tenant remains in possession after the determination of the lease, the common law rule is that he is a tenant at sufferance. A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent. The former is a tenant holding over or a tenant at will and the latter is a tenant at sufferance in English Law.
What the section 116 of the Transfer of Property Act, 1882 contemplates is that on one side there should be an offer of taking a new lease evidenced by the lessee or sublessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise.
In Kai Khushroo Bezonjee Caoadia v. Bai Jerbai Hirjibhoy Warden, it was held that the assent of the landlord which is founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays it.
In the present case it was held that, in case of normal tenancy, a landlord is entitled, where he does not accept the rent after the notice to quit, to file a suit in ejectment and obtain a decree for possession, and so his acceptance of rent is an unequivocal act referable only to his desire to assent to the tenant continuing in possession. That is not so where Rent Act exists; and if the tenant says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenant's continuing in possession, it is for the tenant to establish it. No attempt has been made to establish it in this case and there is no evidence, apart from the acceptance of the rent by the landlord, to indicate even remotely that he desired the appellants to continue in possession after the termination of the tenancy.
Therefore, it was concluded that there was no holding over by the appellants.