Sudhir Kumar & Ors Vs. Baldev
Krishna Thapar & Ors  INSC 310 (28 October 1969)
Landlord and Tenant--Option of renewal in
lease deed subject to lessor's consent-When lessor could withhold consent.
Suit for ejectment--Compromised-Lessee
allowed to continue in possession till a particular date on terms and
conditions of original lease Whether fresh lease or mere extension of time for
delivery of possession Whether renewal clause operative.
One of the terms of the lease relating to a
cinema house was that after the expiry of the lease, the lessee shall have the
option to renew the; lease with the consent of the lessor At the end of the
lease period, the lessor brought a suit for ejectment, but died during its
pendency. On December 23, 1958, the suit was compromised between the legal
representatives of the lessor and the lessees. By the compromise; the tenancy
was continued till December 31, 1962 on the terms and conditions of the
original lease, and the lessees were to vacate the premises on January 1, 1963.
One of the, legal representatives sold his share in the cinema house to the
appellant who sought execution of the compromise, decree on January 4, 1963.
The respondents (lessees) contended that the compromise created a fresh lease,
that the decree was only a declaratory one and that they were entitled to an
extension of the lease on the basis of the renewal clause incorporated into the
HELD : (1) The question whether under the
terms of a compromise the parties entered into a fresh lease or were only
granted an extension of time for de-livery of possession depends upon the
intention of parties as expressed in the, compromise and the decree based on
it. On the terms of the compromise in the present case, the lessors had granted
a fresh lease and the lessees were given the option to renew the lease, which
was one of the terms of the original lease, at the end of the term fixed, that
is 31st December 1962. Hence, the direction in the compromise decree to vacate
at the end of the term would be ineffective and would not amount to an
ejectment decree. It is at best a declaration of the right of the lessors to
eject the lessees at the end of the lease period if the lessees fail to get a
renewal. [118 B-C, G-H; 119 A-B] (2) Merely because the compromise had fixed
the period during which the respondents continued as lessess, it did not mean,
that the renewal clause in the original lease had not become one of the terms
of the agreement. [119 D-E] (3) Nor was the renewal clause meaningless on the
ground the lessees were entitled to a renewal only if the lessors consented.
The right of the lessors to give consent must be read in the context of the
lessees' entitlement to get the renewal. So read, the lessors could withhold
their consent either because of the lessees' failure to observe one or other of
the material terms of the lease or on some other reasonable ground. The lessor
could not unreasonably withhold consent when the lessee exercised the option of
renewal. [119 E-G; 120 A-B] 115
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 2557 and 2558 of 1966.
Appeals from the judgment and order dated
July 23, 1965 of the Jammu & Kashmir High Court in Civil First Misc.
Appeals Nos. 20 and 30 of 1964.
V. M. Tarkunde, P. C. Bhartari, J. B.
Dadachanji, O. C. Mathur -and Ravinder Narain, for the appellants.
A. K. Sen, Inder Das Grover and J. P.
Aggarwal, for respondent No. 1.
The Judgment of the Court was delivered by
Hegde, J These connected appeals arise from an execution proceeding. The
question for determination in these appeals is, whether the decree under
execution is executable ? The learned single judge of the High Court of Jammu
& Kashmir before whom the execution was levied came to the conclusion that
the decree is executable but the execution petitioners, who are entitled to a
fraction of the interest in the. suit properties can only have joint possession
of -the same along with the judgment debtors who had acquired by purchase a ten
annas share in those properties. Both the appellants as well as respondents 1
and 2 appealed against the order of the learned single judge. The appellate
bench of that High Court reversed the decree of the learned single judge. It
came to the conclusion that the decree is not executable and that it is merely
declaratory in character. It accordingly dismissed the execution petition.
Hence these appeals by certificate.
The facts giving rise to the controversy are
One Sardar Uttam Singh Khorana leased in
favour of the 1st respondent and the father of the second respondent the Uttam
Talkies in Jammu including a cinema machinery and furniture for a term of three
years on a monthly rental of Rs. 3,000.
One of the terms of the said lease was that
after expiry of the lease, the tenant shall have the option to renew the lease
with the consent of the landlord. At the end of the lease period Sardar Uttam
Singh brought a suit for ejectment against the lessees but he died during the
pendency of the suit leaving behind him a will by which his son Joginder Singh
got six annas share in the Uttam Talkies and his another son Devinder Singh got
'a four annas share therein.
The remaining six annas share was bequeathed
to a trust. On December 23, 1958, a compromise was entered into between the
legal representatives of the original plaintiff and the defendants by which the
tenancy was continued till December 31, 1962. We shall refer to the other terms
of the compromise at the appropriate stage. Before the term stipulated in the
compromise came to an end, Joginder Singh sold his six annas share in the Uttam
116 to the appellants in this appeal. The
other ten annas shares were conveyed to the lessees by the owners of those
shares. Before conveying their shares, on October 14, 1961, Devinder Singh and
the trustees of the trust executed in favour of the lessees an agreement to
renew the lease for a period of three years from 1-1-1963 more or less on the
same conditions on which it was enjoyed by -them previously. On January 3, 1963
Devinder Singh on his own behalf and on behalf of the trust filed an
application before the executing court praying that satisfaction of the decree
may be ;entered into. Accordingly the court recorded satisfaction of the decree
by its order of the same date.
Thereupon the appellants moved the Court for
delivering khas possession of the Uttam Talkies. Yet another application was
filed by them on January 5, 1963, requesting the court to review its order
entering satisfaction of the decree.
That application was accepted by the court
and on January 17, 1963, the learned single judge recorded satisfaction of the
decree only to the extent of the share purchased by the lessees. Thereafter the
appellants pressed their execution petition. The lessees objected to the same.
As mentioned earlier their objection was overruled by the learned single judge
who directed delivery of the joint possession in favour of the appellant as
well as the lessees. As seen earlier that decision was overruled by the
The contention on behalf of the appellant is
that the compromise decree referred to earlier is an executable decree whereas
the lessees take the stand that it is merely a declaratory decree. According to
them, the compromise entered into between the parties amounts to a creation of
a new lease and the decree superimposed on it merely endorses the agreement
entered into between the parties.
The material portion of the compromise decree
reads as follows :
"1. The defendants shall remain as
lessees of Uttam Talkies Residency Road, Jammu with the machinery furniture
fitting etc. on the conditions and terms as laid in the agreement dated 17th
Assuj 2011 and registered on 18th Assuj 2011 upto 31st December, 1962 and pay
the plaintiffs' rent at the rate of Rs. 3,000 per month from 1st January 1959
in the following proportion;
(a) S. Devinder Singh-Four annas in a rupee.
(b) S. Joginder Singh-Six annas in a rupee.
(c) M/s. Devinder Singh Gopal Dass and
Manohar Lal-Trustees six annas in a rupee.
2. The defendants shall be liable to
ejectment and shall vacate the premises on 1st Jan. 1963 on the terms and
conditions as stated above.
3. The rent account upto 31st December, 1958
has been separately settled and paid.
4. The defendants shall have right to quit
the leased premises at any time before 31st December 1962 provided they give
two months previous notice to the plaintiff in this behalf. In such contingency
rent due upto the date of handing over the possession shall be recoverable.
5. The parties shall bear their own
costs." The relevant terms of the compromise are as follows "That the
parties have compromised the abovenamed case and have agreed that the
defendants shall remain as lessees of the Uttam Talkies, Residency Road, Jammu
on terms and conditions on which they previously held the said premises
machinery furniture fittings etc. upto 31st December, 1962 and pay to the
plaintiffs rent at Rs. 3,000 per month from 1st January 1959 in the following
proportion :S. Devinder Singh-Four annas in the rupee.
S. Joginder Singh-Six annas in the rupee.
M/s. Devinder Singh, Gopal Dass Manohar Lal
Trustees-six annas in the rupee.
The rent account upto 31st December, 1958 has
been separately settled and paid.
The rest of the terms and conditions will be
as contained in the agreement a deed dated 17th Assuj 2011 registered on 18th
The defendants shall have right to vacate the
premises even before 31st December, 1962 if they so desire and give 2 months
previous notice. In such contingency rent upto the date of handing over of
possession shall be recoverable.
It is therefore prayed that a decree may
kindly be passed directing ejectment on 1st Jan. 1963 on terms and conditions
The parties will bear their own costs."
Paragraph 30 of the lease executed by Uttam Singh in favour of the lessees
which incorporates the renewal clause reads as follows 118 "That at the
time of expiry of the period of three years the promisors with the consent and
consultation of promisee shall be entitled to take the cinema on contract for
further two years on the above conditions provided that there has been no
breach of any condition laid down in the agreement." The question whether
under the terms of the compromise the parties entered into a fresh lease or the
decree holders merely granted an extension of time for delivery of possession
of the premises demised essentially depends on the intention of the parties who
entered into the compromise as could be gathered from the compromise petition
as well as the compromise decree. It is necessary to note that in the
compromise petition, it is specifically stated that the parties had agreed
"that the defendans shall remain as lessees of Uttam Talkies Residency
Road, Jammu on terms and conditions on which they previously held the said premises
machinery furniture fittings etc. upto 31-12-1962 and pay to the plaintiff rent
at Rs. 3,000 per month from 1st January 1959 in the following proportion......
It is further stated therein that "the rest of the terms and conditions
will be as contained in the agreement a deed dated 17th Assuj 2011 registered
on 18th Assuj 2011". But the last clause in the compromise petition reads
: "it is therefore prayed that a decree may kindly be passed directing
ejectment on 1st January 1963 on terms and conditions contained herein."
The compromise decree refers to the defendants as "lessees" and the
compensation payable by them as 'rent'. At the same time cl. (2) of the decree
says that the defendants shall be liable to ejectment and shall vacate the
premises on 1st January 1963 on the terms and conditions as stated above.
The compromise and the compromise decree
speak, so to say, in two voices. If we had been merely left with the specific
terms incorporated in the compromise petition and the compromise decree without
bringing in by reference the terms of the original lease as to matters not
specifically covered in the compromise petition and the compromise decree,
there would have been some difficulty in spelling out the real intention of the
parties. But by incorporating the terms of the old lease, to the extent not
covered by the new terms, the parties had agreed to incorporate into the new
agreement the term relating to renewal found in the original lease.
On an analysis of the terms of the
compromise, it is seen that the lessors had granted a fresh lease of the cinema
talkies demised; a monthly rental was fixed in respect of the same and the
lessees were given an option to renew the lease at the end of the term fixed
though that right is subject to certain conditions. Under these circumstances,
the direction in the decree to vacate the suit premises at the end of the term
fixed in the compromise in accordance with 119 the terms of the compromise
would amount to an ineffective direction. Such a direction cannot be considered
as an ejectment decree. It is at best a declaration of the right of the lessors
to eject the lessees at the end of the lease period if the lessees fail to get
Mr. Tarkunde, learned Counsel for the
appellant contended that on a proper construction of the compromise petition
and the compromise decree, it would be seen that the renewal clause was not
incorporated into the compromise decree.
According to him the period during which the
defendants are permitted to be in possession of the" suit, premises is
subject to no alteration under any circumstance. Subject to that condition and
other conditions mentioned in the compromise petition the terms of the original
lease were incorporated into the compromise petition. We see no basis for this
contention. A term in a lease relating to renewal is independent of the
duration of the lease fixed under the lease deed. The renewal obtained by the
exercise of the option given under the lease is an extension obtained by the
exercise of an independent power. Therefore there is no force in the contention
that because the compromise had fixed the period during which the defendants
could continue as lessees, the renewal clause in the original lease deed did
not become one of. the terms of the agreement. We are unable to consider the
clause in the compromise referring to the original lease as a barren clause or
that it is not wide enough to reach the renewal clause.
Mr. Tarkunde next contended that the renewal
clause referred to earlier is a meaningless term as the lessees are entitled to
a renewal only if the lessors consented. He urged that there can be a renewal
only if both the lessors and the lessees agreed, but in that event there is no
need to have a term providing for renewal. We are unable to read the renewal
clause as Mr. Tarkunde wants us to do. No term in a contract should be
considered as superfluous if it can be given some reasonable meaning. The
clause in question definitely says that lessees are entitled for a renewal.
The right of the lessors to give consent must
be read in the context of the lessees' entitlement to get a renewal of the
lease. If so read, it is clear that the lessors can withhold their consent
either because of the lessees' failure to observe one or other of the material
terms of the lease or on some other reasonable ground. The lessors cannot
withhold their consent capriciously or unreasonably.
A covenant against assigning and letting,
charging or parting with possession of the demised property or any part thereof
without licence or consent of the landlord is deemed to be subject to a proviso
to the effect that such licence or consent is not to be unreasonably withheld.
That is the position both under the English law as well as under the Indian
law. About that there is no dispute. If in the matter of introducing a stranger
to the 120 demised property, the law insists that the lessors should not
unreasonably withhold his consent, it follows as a matter of reason and logic
that the lessor cannot unreasonably withhold his consent, when the lessee
exercises his option to renew the lease on the strength of one of the terms in
the lease deed.
On a consideration of all the terms in the
compromise petition, we are satisfied that the parties intended to create a
fresh lease and not that the lessees were only permitted to be in possession of
the leasehold for the prescribed period as licensees.
For the reasons mentioned above, these
appeals fail and are dismissed with costs. One set.