Chand & Anr Vs. Nagarjuna Travels and H.Ltd.  Insc 319 (30 July 2002)
& Shivaraj V.Patil D.P.Mohapatra, J.
appeal, filed by the defendants of O.S.No.778 of 1996 on the file of the City Civil Court, Hyderabad, is directed against the judgment of the High Court of
Andhra Pradesh in City Civil Court Appeal (CCCA) Nos.99 and 100 of 1999
dismissing the appeal filed by the appellants and confirming the
judgment/decree passed by the Trial Court. The dispute raised in the case
relates to eviction of the tenants from the premises described as "Central
Studio", Door No.3-6-356/8, Basheer Bagh Road, Hyderabad and Door
No.119/A, WhiteHall, Sardar Patel Road, Hyderabad. The appellants, who were
travelers of the "Central Studio", were tenants of the premises under
the respondent Nagarjuna Travels and Hotels Pvt. Ltd., which is the owner of
respondent filed the aforementioned suit against the appellants seeking the
decree of eviction from the suit premises. In the suit the following reliefs
were sought by the plaintiff :-
Plaintiff company be put in possession of the suit premises by evicting the
Arrears of rent i.e. 2,600/- p.m. for the months of September, 1995 and
October, 1995 be awarded from the defendants jointly and severally.
amount of Rs.2,40,000/- be awarded towards compensation and damages for the use
and occupation of the suit premises for the period between 1.11.1995 and
30.4.1996 from the defendants jointly and severally.
lite and post decreetal compensation/damages be awarded from the defendants
jointly and severally at the rate of Rs.40,000/- per month for the use and
occupation of the suit premises"
case of the plaintiff was that in pursuance of the registered lease dated
3.8.1970 executed between the parties, the suit premises were given on lease by
the plaintiff to the defendants for a period of 25 years on payment of rent of
Rs.1300/- p.m. with effect from 1.8.1970. The said period of 25 years expired
on 1.8.1995. Thereafter on 10th October, 1995 the plaintiff issued a notice to the defendants of termination of the
lease by giving 15 days notice expiring on 31st October, 1995. The notice was stated to be issued
under Section 106 of the Transfer of Property Act. The defendants were required
to handover vacant possession of the premises on expiry of the notice period.
Since the defendants did not vacate the premises in compliance with the notice
and continued to remain in possession of the premises, the plaintiff filed the
suit seeking reliefs noted earlier.
defendants contested the suit. Their case, shortly stated, was that it was
stipulated in the lease deed that on expiry of the period of lease in the first
instance (25 years) the lessee shall have the right of renewal; under the said
covenant the defendants exercised the right of renewal, paid rent for the
months of August and September, 1995 and continued to remain in possession of
the property; though the plaintiff initially accepted the rent but subsequently
declined to do so. The defendants also questioned the jurisdiction of the Civil
Court to entertain the suit and contended that the proceeding for eviction
could be filed only before the Rent Controller since the proportionate rent payable
by them, for the premises after the area was reduced on a portion of it being
taken over for the purpose of the widening of the road, was less than
trial Court on the pleadings of the parties framed several issues including the
issue whether the plea of the defendants that there was a renewal of lease for
a further period of 25 years on the same terms and conditions is true and
whether the defendants are entitled to make such a claim under law? And whether
the Court has jurisdiction to try the suit in view of the plea raised by the
defendants vide Andhra Pradesh Building, Lease, Rent and Eviction Control
Act? It is relevant to state here that the appellants also filed a suit against
the respondents, O.S.No.461/98 for issuance of a permanent injunction against
the defendants restraining them from proceeding to interfere in their peaceful
possession and enjoyment of the suit property. Therein they had reiterated the
case set up by them in the written statement in the suit filed by the respondents.
They claimed to be in possession of the suit property in exercise of the option
of renewal of lease as stipulated in the registered document.
written statement filed by the respondents in the said suit they also
reiterated the stand taken in the suit filed by them. They asserted that there
was no right of renewal vested in the lessee under the lease deed, and after
the expiry of the lease period they had no right to remain in possession of the
property, particularly after the notice of termination of lease issued by the
landlord was received by them.
said suit one of the issues framed by the Trial Court was whether the plaintiff
is entitled for the relief of permanent injunction as prayed for? Both the
suits were tried together with consent of the counsel appearing for the parties
and disposed of by the Trial Court in a common judgment. The trial Court held
inter alia that the suit was maintainable in Civil Court;
the defendants were not entitled for renewal of the lease for a like period on
the same terms and conditions; that the defendants failed to establish the
entitlement of renewal; and that the plaintiff had every right to issue
termination of notice. The Trial Court summed up its findings in these words :
on a careful perusal of evidence adduced by the plaintiff together with the
documents, I am of the opinion that defendants are not entitled for counter
claim as sought for. On the other hand, the plaintiff is entitled for the
direction directing the defendants to be evicted from the schedule premises.."
Regarding the stand taken by the defendants that there was a reduction of the
area in their occupation, the trial Court held that from 1.11.1995 to
13.10.1998 the defendants were in occupation of 2734 sq.ft. and subsequently
they were in occupation of 2008 sq.ft. On the plaintiff's claim of damages for
use and occupation of the premises, the trial Court was of the opinion that a
sum of Rs.20,000/- will meet the ends of justice and accordingly awarded
Rs.20,000/- as damages for the period 1.11.1995 to 30.4.1996, i.e. the period
from the date of filing the suit till the date of delivery of possession.
Feeling aggrieved by the judgment of the trial Court the defendants filed CCCA
Nos. 99 and 100/99 before the High Court assailing the judgment. The High
Court, on consideration of the case of the parties, confirmed the
judgment/decree passed by the trial Court and dismissed the suit.
the appeal by the defendants.
sole contention raised by Shri P.V.Kapur, learned senior counsel appearing for
the appellants is that in view of the renewal clause in the lease deed,
according to which the lessees is having the right of renewal, and lessees
having exercised that option, is evident from their conduct and the Courts
below erred in passing the decree of eviction.
contra, Shri P.P.Rao, learned senior counsel for the respondent, contended that
the renewal clause in the lease deed is vague and unspecific and, therefore,
not binding on the parties. According to Shri Rao, the Courts below rightly did
not enforce the renewal clause and rightly decreed the suit for eviction of the
lessees. Shri Rao contended that though it is stated in the lease deed that the
period of lease shall be 25 years in the first instance with the right of
renewal as hereinafter as set out. Nothing is set out in the document regarding
the conditions on which the renewal will be given effect to; even the rate of
rent and the period of renewal are not specified. In the circumstances, Shri Rao
submitted, the renewal clause cannot be given effect to.
view of rival contentions raised by the learned counsel for the parties the
question that arises for consideration is whether the covenant for renewal of
the lease was valid and enforceable? If the question is answered in the
affirmative then the suit is liable to be dismissed; if on the other hand the
question is answered in the negative then the suit is to be decreed.
determination of the question formulated turns mostly on the interpretation of
the relevant clause in the lease deed, it will be convenient to quote the
clause in extenso :
In pursuance of the said arrangement and in consideration of the rent hereby
reserved the Lessor hereby grants and demises by way of Lease the portions of
the premises described in the schedule attached hereto and delineated in the
plan attached hereto for a period of 25 years in the first instance with the
right of renewal as hereinafter set out. The initial period of the Lease shall
commence from 1-8-1970.
Lessee shall pay the rent at the rate of Rs.650/- per month for the first 5
years and Rs.850/- per month for the subsequent period of 5 years; Rs.1,050/-
per month for the third period of 5 years and Rs.1,300/- per month for the
remaining period of 10 years.
rent and the aforesaid rates shall be paid by the Lessee on or before the 10th
of every succeeding month at the office or at the premises of the Lessor or on
such other place as the Lessor may appoint on his behalf from time to
time." From the above noted covenant in the lease deed it is clear that
the lease was granted for a period of 25 years in the first instance with the
right of renewal as hereinafter set out. Though the right of renewal is
mentioned in the clause there is no mention about the terms and conditions of
renewal either in the clause quoted above or elsewhere in the document. On a
fair reading of the document it appears that the right of renewal stated
therein is shrouded in uncertainty and vagueness. The renewal clause in a lease
deed is an important term of the agreement. Ordinarily the Court should be
reluctant to ignore such a term of the lease, unless on a fair reading and
reasonable construction no meaning can be attached to it. Since the renewal
clause is not clear and specific regarding the terms of renewal the Court is to
ascertain the intention of the parties from the materials on record. As noted
earlier, the lease deed read as a whole, does not indicate the manner in which
the right of renewal is to be exercised by the parties and the terms and
conditions of such renewal. It is not even stated in the document that the
renewal will be subject to terms and conditions to be decided by the parties by
mutual discussion or according to any other procedure. There is no indication
whether such discussion will at all be held or not.
being an important condition of lease, could not have been dealt with in such
careless and slip-shot manner and would not have been left in such vague and
uncertain condition if the parties were serious about the renewal of the lease.
On appreciation of the evidence the Courts below having not believed the case
of the defendants that some verbal requests for renewal of the lease were made
by them to the plaintiff after expiry of the period of lease, the Courts have
found that no attempt was made by the lessees to suggest the terms and
conditions for renewal of the lease particularly the rent to be paid by them
except offering the rent for two months at the old rate. In such circumstances,
if the Courts below have found that the lessees had no enforceable right of
renewal under the document and indeed had not taken any step for execution by
any document on renewal of the lease, no exception can be taken to such
findings. No fixed principle or straight-jacket formula can be laid down
regarding the question whether the condition of renewal in the lease which is
vague and uncertain should be enforced. The question is to be judged on the
facts and circumstances of each case. In the case in hand, the lease is in
respect of premises which was situated in a busy commercial centre of the city
of Hyderabad and lease of the property had been
taken and was being used for commercial purposes. In such a case it is
difficult to accept that the parties had intended that the lessees can
unilaterally exercise the right of renewal without the terms and conditions of
renewal being settled between the parties. At the cost of repetition it may be
stated here that the lessees (appellants herein) had made no attempt to get the
terms and conditions of renewal of the lease fixed by mutual discussions with
the lessor respondent herein. So far as the lessor is concerned it had made its
intention clear by sending the notice of termination of the lease.
consideration of the entire matter, we are of the view that the judgment of the
High Court confirming the findings and the decision of the trial Court
decreeing the suit for eviction, does not call for interference. Accordingly,
the appeal is dismissed, but in the circumstances of the case without any order