Vs. Davinder K. Bajaj & Ors  Insc 230 (18 April 2001)
Shah Mohammed Quadri & S.N. Phukan Phukan, J.
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.
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.
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.
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 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 appellant is liable to be
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.
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.
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.
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
other leases of immovable property may be made either by a registered
instrument or by oral agreement accompanied by delivery of possession.
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;
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.
106 lays down a rule of construction, which is to apply when the parties have
not specifically agreed upon II as to whether the lease is yearly or monthly.
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 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.
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.
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.
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.
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 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.
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.
learned counsel for the appellant has very placed before us various decisions
of different High Courts.
find fairly that two different views are projected in these decisions. One view
is that fiction in Section 106 was not intended to override Section 107.
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.
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).
not necessary to refer to all the decisions of other High Courts.
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.
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 shall be deemed to exist
only when it is created by a registered instrument; non-existence of a
registered instrument to create such a lease will by itself exclude Section
the reasons stated above, we find no merit in the present appeal and
accordingly it is dismissed. Costs on the parties.