Full Judgment Text
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CASE NO.:
Appeal (civil) 1906 of 1998
PETITIONER:
SAMIR MUKHERJEE
Vs.
RESPONDENT:
DAVINDER K. BAJAJ & ORS.
DATE OF JUDGMENT: 18/04/2001
BENCH:
Syed Shah Mohammed Quadri & S.N. Phukan
JUDGMENT:
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PHUKAN, J.
In this appeal by special leave the appellant has
impugned the judgment of the Division Bench of Delhi High
Court passed in R.F.A. No.325 of 1997 by which the High
Court upheld the judgment of the Additional District Judge,
Delhi.
The respondents filed a suit for eviction of the
appellant from the suit land and also for recovery of
arrears of rent and damages/mesne profits. According to
respondents the appellant was a monthly tenant and,
therefore, 15 days notice terminating the tenancy, as
required under Section 106 of Transfer of Property Act (for
short the Act) was issued, receipt of which was not
disputed. The tenancy was created by an oral agreement.
The appellant admitted the tenancy but pleaded that the
intention of the parties at the time of its creation was to
grant tenancy permanently because the lease was granted in
favour of the appellant for manufacturing purpose and since
the inception of the tenancy, the appellant was carrying on
business of manufacturing transmission towers and railway
electrification fittings. On these facts it was pleaded
that the lease would be deemed to be from year to year as
per the provisions of Section 106 of the Act and, therefore,
notice to quit ought to have been given for 6 months
expiring on last date of the year of the tenancy. Before
the Trial Court an application under Order XII Rule 6 C.P.C.
was filed which was allowed, as according to the Trial Court
in the written statement there was clear admission by the
appellant.
Before this court, learned counsel for the appellant,
Mr. Jaideep Gupta referring to the provisions of Section
106 of the Act has contended that since the lease was for
manufacturing purpose, the legal presumption as envisaged in
Section 106 of the Act would apply and, therefore, it was a
case of a tenancy from year to year terminable by 6 months
notice and not by 15 days notice. The learned counsel has
further contended that though under Section 107 of the Act a
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lease from year to year can be made only by a registered
deed, this section nowhere controls the presumption laid
down in Section 106 of the Act and as such the notice to
quit in the present appeal is bad in law. In reply the
learned senior counsel for the respondents, Mr. Verma has
submitted that in view of the law laid down by this court in
Ram Kumar Das versus Jagdish Chandra Deo, Dhabal Dev and
Anr. [AIR 1952 SC 23 = 1952 (3) SCR 269] and Shri Janki
Devi Bhagat Trust, Agra versus Ram Swarup Jain (Dead) By
Lrs. [1995 (5) SCC 314], the contention of the learned
counsel for the respondents is liable to be rejected.
To appreciate the respective contentions that have been
put forward by the learned counsel for the parties we
extract below Sections 106 and 107 of the Act: 106.
Duration of certain leases in absence of written contract or
local usage In the absence of a contract or local law or
usage to the contrary, a lease of immovable property for
agricultural or manufacturing purposes shall be deemed to be
a lease from year to year, terminable, on the part of either
lessor or lessee, by six months notice expiring with the
end of a year of the tenancy; and a lease of immovable
property for any other purpose shall be deemed to be a lease
from month to month, terminable, on the part of either
lessor or lessee, by fifteen days notice expiring with the
end of a month of the tenancy.
Every notice under this section must be in writing
signed by or on behalf of the person giving it, and either
be sent by post to the party who is intended to be bound by
it or be tendered or delivered personally to such party, or
to one of his family or servants at his residence, or if
such tender or delivery is not practicable affixed to a
conspicuous part of the property.
107. Lease how made A lease of immovable property
from year to year, or for any term exceeding one year, or
reserving a yearly rent, can be made only by a registered
instrument.
All other leases of immovable property may be made
either by a registered instrument or by oral agreement
accompanied by delivery of possession.
Where a lease of immovable property is made by a
registered instrument, such instrument or, where there are
more instruments than one, each such instrument shall be
executed by both the lessor and the lessee;
Provided that the State Government may, from time to
time, by notification in the Official-Gazette, direct that
leases of immovable property, other than leases from year to
year, or for any term exceeding one year or reserving a
yearly rent, or any class of such leases, may be made by
unregistered instrument or by oral agreement without
delivery of possession.
Section 106 lays down a rule of construction, which is
to apply when the parties have not specifically agreed upon
as to whether the lease is yearly or monthly between the
parties. 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
attracted to construe the duration of a valid lease in the
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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 legal fiction leases for
agricultural or manufacturing 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.
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.
In the case in hand we are concerned with an oral lease
which is hit by the first paragraph of Section 107 of the
Transfer of Property Act. Under Section 107 parties have an
option to enter into 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 yearly
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 by 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 a valid lease within 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.
In Ram Kumar Das (supra), Section 106 was considered by
a bench of four judges of this court. This court held that
this section 106 lays down the rule of construction which is
to be applied when there is no period agreed upon between
the parties and in such cases duration has to be determined
by the reference to the object for purpose for which tenancy
is created. It was also held that rule of construction
embodied in this section applies not only to express leases
of uncertain duration but also to leases implied by law
which may be inferred from possession and acceptance of rent
and other circumstances. It was further held that it is not
disputed that a contract to the contrary as contemplated by
Section 106 of the Transfer of Property Act need not be an
express contract; it may be implied, but it certainly
should be a valid contract. On the facts of that case, the
court held that the difficulty in applying this rule to the
present case arises from the fact that tenancy from year to
year or reserving an yearly rent can be made only by
registered instrument as lays down in Section 107 of the
Transfer of Property Act. (emphasis supplied)
In a recent decision of this court in Janki Devi Bhagat
Trust, Agra (supra) this court held that under Section 107
of the Transfer of Property Act a lease of immovable
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property from year to year or for a term exceeding one year
can be made only by registered instrument and any lease of
this kind would be void unless it is so created.
In the present case though the appellant has claimed
that it was a lease for manufacturing purpose, admittedly
there was no registered written lease. Therefore, rule of
construction as envisaged in Section 106 would not be
applicable as the statutory requirement of Section 107 of
the Act has not been satisfied. The plea of the appellant
that 15 days notice terminating the present tendency is bad
in law would not be sustainable.
The learned counsel for the appellant has very fairly
placed before us various decisions of different High Courts.
We find that two different views are projected in these
decisions. One view is that fiction in Section 106 was not
intended to override Section 107.
In Krishna Das versus Bidhan Chandra (AIR 1959 Calcutta
181) and Balwant Singh versus L. Murari Lal (AIR 1965
Allahabad 187) the courts have taken the view that Section
106 was not intended to be controlled by Section 107.
Similar view has been expressed by the High Courts of Assam
and Nagaland. The contrary view has been expressed by the
Calcutta High Court in Sati Prasanna Mukherjee versus Md.
Fazel (AIR 1952 Calcutta 320) and Allahabad High Court in
Kishan Lal versus Lal Ram Chander (AIR 1952 Allahabad 634).
It is not necessary to refer to all the decisions of other
High Courts.
On perusal of these decisions we find the view that
fiction in Section 106 was not intended to be controlled by
Section 107 was due to misunderstanding of the decision of
this court in Ram Kumar Das (supra) as we have already
indicated that in Ram Kumar Das (supra), this court did not
apply rule of construction of Section 106 as there was no
registered instrument. The High Courts taking that view
have not laid down the law correctly.
In Jagat Taran Beery versus Sardar Sant Singh (AIR 1980
Delhi 7), Delhi High Court considered the views expressed by
different High Courts and correctly took the view that there
is no conflict between Sections 106 and 107 of the Act and
for application of Section 106 a valid year to year lease is
deemed to exist when it is created by a registered
instrument; the non-existence of a registered instrument
will by itself exclude Section 106.
For the reasons stated above, we find no merit in the
present appeal and accordingly it is dismissed. Costs on
the parties.