D.D.A. V/s. M/S.ANANT RAJ
AGENCIES PVT.LTD
CA No. 3783 OF 2016 @ SLP(C)
No. 6978 of 2012
Coram:
V. GOPALA GOWDA, ARUN MISHRA
Date of decision- 12th April,
2016
Ratio decidendi
Ø Acceptance
of rent, pursuant to a demand, does not amount to a renewal of lease.
Ø Any right,
title or interest purported to be created during termination of lease is void ab
initio in law
Brief facts
The Delhi Improvement Trust
vide renewable lease deed dated 06.01.1951 granted lease of plot no.2,
Jhandewalan, “E” Block, Delhi in favour of original lessee Balraj Virmani
initially for a period 20 years. After enactment of the Delhi Development Act,
1957, all properties, movable or immovable, vested in the Delhi Improvement
Trust came to be vested in the DDA.
Said lease period expired on
10.08.1968 as the lease period commenced w.e.f. 11.08.1948.
Original lessee approached the
DDA for renewal of his lease vide his letter dated 23.2.1967.
Before expiry of the original
lease period, notices were issued to the original lessee by the office of DDA
on 09.02.1968 and 16.02.1968 to the original lessee alleging certain breaches
of the terms and conditions.
15 days time was given to
remedy the said breaches.
The original lessee replied to
the said show cause notice through various communications. However, no further
communication was issued by the DDA in this regard.
The DDA vide notice dated 01.09.1972
decided not to renew the lease and terminated the same on account of
non-observation of the terms and conditions.
Aggrieved by the decision of
the DDA, the original lessee filed original suit for perpetual injunction.
The learned Sub-Judge has
found notice dated 01.09.1972 of the DDA to be arbitrary, illegal and without
jurisdiction.
Upon appeal by DDA, learned
ADJ affirmed the aforesaid judgment.
DDA preferred Second Appeal
vide RSA No. 06 of 1983.
During the pendency of the
said second appeal an application vide CM No. 13336 of 2007 was moved under
Order 22 Rule 10 of the CPC for substitution of M/s Anant Raj Agencies Pvt.
Ltd.-the respondent.
The High Court by its judgment
and order dated 31.05.2011 has dismissed RSA No. 6 of 1983 filed by the DDA
holding that its act of demanding and accepting rent tantamounts to renewal of
lease.
Hence, this appeal by way of
special leave has been filed by the DDA raising certain substantial questions
of law urging various grounds.
Amongst the others, below was
DDA contention:
1.
That the High Court has failed to appreciate
that the original lessee has admittedly breached the terms and conditions
contained in the lease deed and thus, not entitled to the renewal of the same
in his favour.
2.
That the deposit of the rent by the original
lessee and its acceptance by the office of the DDA is administrative in nature
and would not be construed as an estoppel or waiver of the DDA’s right in
respect of the property in question unless a specific intention to this effect
is communicated to the original lessee.
Amongst the others, below was Respondent’s
contention:
1.
in view of the settled principle of law as well
as the precedents laid down by the Hon’ble Apex Court in a catena of cases that
the exercise of option for renewal cannot be stalled on account of the alleged
breaches of the terms and conditions of the lease when no steps were taken by
the DDA to assert its right and power in respect of re-entry into the property
in question till the option for renewal of lease exercised by the lessee.
2.
that after the expiry of the first term of the
lease and acquiescence of the DDA in letting the original lessee to continue in
possession of the said property, the lessee became a tenant at will in respect
of the said property.
The Hon’ble Court decided below
issue:
1.
Whether the original lessee has acquired any
right, in respect of the property in question after the termination of lease by
efflux of time on 10.08.1968 and also by termination notice dated 01.09.1972,
in the Page 14 CA @ SLP(C) No. 6978 of 2012 14 absence of renewal of lease
by the DDA in writing as provided under Clause III(b) of the lease deed, by
virtue of payment of rent in the office of the DDA?
The Hon’ble Court relied upon
Shanti Prasad Devi & Anr.
v. Shankar Mahto & Ors (2005) 5 SCC 543:
“………..on expiry of period
of lease, mere acceptance of rent for the subsequent months in which the lessee
continued to occupy the lease premises cannot be said to be a conduct
signifying “assent” to the continuance of the lease even after expiry of lease
period……….”
Sarup Singh Gupta v. S.
Jagdish Singh & Ors (2006) 4 SCC 205
………. mere acceptance of rent
did not by itself constitute an act of the nature envisaged by Section 113,
Transfer of Property Act showing an intention to treat the lease as subsisting……….
To avoid any controversy, in the event of termination of lease the practice
followed by the courts is to permit the landlord to receive each month by way
of compensation for the use and occupation of the premises, an amount equal to
the monthly rent payable by the tenant. It cannot, therefore, be said that mere
acceptance of rent amounts to waiver of notice to quit unless there be any
other evidence to prove or establish that the landlord so intended……” (emphasis supplied by the Court)
The Hon’ble Court on basis of
aforesaid judgment held
“…….Therefore,
in the instant case, as per clause III(b) of the lease deed and Sections 21 and
22 of the DD Act read with Rule 43 of the Nazul Land Rules and in the light of
Shanti Prasad Devi, Sarup Singh Gupta and Ashoka Marketing Ltd. cases (supra),
there cannot be an automatic renewal of lease in favour of the original lessee
once it stands terminated by efflux of time and also by issuing notice
terminating the lease. Merely accepting the amount towards the rent by
the office of the DDA after expiry of the lease period shall not be construed
as renewal of lease of the premises in question, in favour of the original
lessee, for another period of 20 years as contended by the respondent……….”
……………………..
The Hon’ble Court further declared regarding the status
of occupant of leased premises after termination of lease deed:
“………….in
the absence of renewal of lease, the original lessee, in relation to the
property in question, is that of an unauthorised occupant as he had
continued in occupation of the property in question as an ‘unauthorized person’
in terms of Section 2(g) of the Public Premises (Eviction of Unauthorised
Occupants) Act, 1971……..”
The Hon’ble Court further decided
below issue:
Whether the respondent herein
acquires any right in respect of property in question by getting substituted in
place of the original lessee by virtue of a compromise decree, between the
original lessee and the respondent, based on a sale deed dated 14.10.1998
executed by the original lessee, by invoking Order 22 Rule 10 of the CPC during
the pendency of the appeal before the High Court?
……………………………
“The
sale of the property in question to give effect to the compromise decree in
aforesaid suit is void ab initio in law for the reason that the original lessee,
in the absence of renewal of lease in his favour himself had no right, title or
interest, at the time of execution of sale deed, in respect of the property in
question. It is well settled position of law that the person having no right,
title or interest in the property cannot transfer the same by way of sale deed…
Thus, in the instant case, the sale of the property in question by the original
lessee in favour of the respondent is not a valid assignment of his right in
respect of the same. ……….”
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