Report No. 70
103.6. Obscurity as to period of notice.-
First, we may note that there seems to be a fair amount of obscurity related to the meaning of two expressions of vital importance used in section 116, namely, "in the absence of an agreement to the contrary" and "as specified in section 106". When the tenant holds over and the lease is considered as renewed under section 116, what is the position where the original lease made certain Specific provisions as to its termination-say, by providing for three months' notice contemplated by section 106?
Obscurity arises in this regard because it is not clear whether the words "in the absence of an agreement to the contrary" in section 116 are to be projected back as to cover also the contrary provision in the original lease. The obscurity also arises from the fact that the reference in section 116 to section 106 is, on one possible construction, to be taken as confined to the period of the tenancy-year to year or month to month-and nothing definitely is stated about the period of notice to be given for termination of the lease.
103.7. Conflict of decisions.-
Judicial decisions on the, subject are not uniform. In an Allahabad case,1 a lease for manufacturing purposes provided for three months" notice instead of the usual six months' notice. The lessee held over. It was held that the provision for three months continued to apply, the reason being that the words "in the absence of an agreement to the contrary" refer not only to the existence of an agreement as to the terms of holding over, but also as to the period of notice.
It may be noted that in the Allahabad case, Ghulam Hasan and Kaul, B. dissented from an earlier Calcutta case2-3 taking a contrary view. In contrast, there are decisions4-5 which take the view that the provision in the original lease waiving or reducing the period of notice is not carried over to the reviewed lease under section 116, Transfer of Property Act.
1. Suiti Devi v. Banarsi Das, AIR 1949 All 703 (Ghulam Hasan and Kaul, JJ.).
2. Dasarathi Kumar v. Sarat Chandra, AIR 1934 Cal 135.
3. Other cases are:
(a) Manmohan Nath v. Peary Mohan, AIR 1919 Cal 54 (Fletcher & Walmsley, JJ.); (b)Badal v. Ram Bharose, AIR 1938 All 649;
(c) Lalman v. Mullo (Mt.), AIR 1925 Oudh 173, following Khuda Baksh v. Abid Hussain, 12 Oudh Cases 279 (Pandit Sundar Lal, J.C.).
4. Rain Lachan Baid v. Kumar Kamakhya Narain Singh, AIR 1923 Pat 201.
5. Kodali Bapayya v. Yadavalli Venkata, AIR '1953 Mad 884 (887).
103.8. True position-recommendation.-
On a careful consideration of the matter, it seems to us that it is not the intention of the legislature that the provision as to the duration of lease contained in the original lease should also be attracted where section 116 governs the matter. While provisions like a convenant to pay rent in advance or a convenant for repair or a provision for reentry on non-payment or rent can be taken as incorporated in the renewed lease, the time by which the lease shall expire, should not be held to be a term of the tenancy arising by holding ever under this section. In order to avoid further controversy in the matter, we recommend that a suitable sub-section should be inserted1 in section 116, after renumbering the present section as sub-section (1).
1. Saila Bala Dassee v. H.A. Tappassier, AIR 1952 Cal 455 (Venkataramaiah, Judge High Court of Karnataka).
103.9. Special law.-
At this stage, we may refer to a suggestion relevant to the section. It has been stated that in view of the special provisions of the Bombay Rent Act, 1947, the landlord is not entitled to claim possession of the premises except under the provisions of the Rent Act. In other words, the Rent Act superimposes a disability on the landlord as to claiming possession, except on the grounds mentioned in the Rent Act, and the Rent Act does not create any new rights as such.
It is further stated that it often happens that even after the notice to quit, the landlord accepts the rent and the Bombay High Court has taken the view that mere acceptance of rent after the operation of the Bombay Rent Act, would not lead to the result that there is a fresh tenancy. There is no special provision in the Rent Act, as such on the subject. In view of the Bombay ruling, mere acceptance of rent after the determination of the lease is no ground for holding that the tenancy is renovated.
In the absence of any special provision under the Rent Act, however, section 116 of the Transfer of Property Act has got to be considered; and the section makes no exception in favour of any special law. The suggestion is that for the sake of clarification,1 a proviso should be inserted in section 116 to the effect that the first part of the section would not apply to a case where the relations of the landlord and tenant are governed by any special Act. We appreciate the desirability of a specific provision on the subject.2 We would provide that mere acceptance of rent attributable to rent control legislation should not be construed as holding over.
By way of example of the correct position, we may refer to a recent case3 holding that unless the tenant prove that the landlord consented to his continuance in possession as a tenant, mere acceptance of rent after termination of the original tenancy would not suffice to create a new tenancy, where the tenancy is governed by rent control legislation.
1. File No. F. 3(3)/55-L.C., Part I, S. No. 76(iv)-Suggestion by Shri R.K. Ranade, District Judge, Kolhapur.
2. See discussion in 49 CWN (Journal) 52, commenting on the case in 49 CWN 430 (433).
3. Hari Prasad v. Mathmal Chunilal, (1974) Mah LJ 637 (cited in the Yearly Digest) following AIR 1961 SC 1067.
103.10. Recommendation to add the words "in writing".-
It has been stated1 that the words "otherwise assents to his continuing in possession" have been responsible for the assertion of untenable please and delay in the disposal of cases. This, it has been suggested, can be remedied by adding the words "in writing" after the words "assents" and before the words "to his".
We have, after careful consideration, decided to accept the suggestion in substance and we recommend that it should be adopted in a modified form-we would put it as a matter of written evidence. Although it would, in one sense, narrow down the scope of the section, it would introduce a test which will lead to greater certainty in practice, and we think that so far as acts other than the acceptance of rent are concerned, certainty is desirable to avoid disputes and that they should be evidenced in writing.
1. File No. 3(3)/55-L.C., Part I (S. No. 93) (Suggestion by Mr. Justice E.S. Venkataramaiah, Judge High Court of Karnataka).
103.11. Recommended redraft.-
The following redraft of section 116 is recommended in the light of the above discussion:-
"116. (1) If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or underlessee or otherwise by an act evidenced in writing assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which are property is leased, as specified in section 106.
(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire. But C continues in possession of the house and pays the rent to A. C's lease is renewed from month to month.
(b) A lets a farm to B for the life of C. C dies, but B continues in possession with A's assent evidenced in writing. B's lease is renewed from year to year.
Exception.-Where, by virtue of legislation relating to the control of rents and protection of tenants against eviction, the lessee or under-lessee is entitled to continue in possession after determination of the lease, nothing in sub-section (1) shall apply to such lessee or under-lessee, where the acceptance of the rent is attributable to such legislation.
(2) Subject to the provisions of sub-section (1)
(a) the provisions of section 106 shall apply as to the termination of the lease governed by that sub-section, and
(b) the terms of the lease that has determined shall not apply for the purpose of termination of the lease governed by that sub-section."