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Ram Kumar Das Vs. Jagadish Chandra Deb Dhabal Deb and Another

  Supreme Court Of India Civil Appeal/114/1950
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Case Background

Appeal from a judgment and decree of the High Court of Patna which arose out of a decree of the District Judge of Purulia This appeal is on behalf of ...

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PETITIONER:

RAM KUMAR DAS

Vs.

RESPONDENT:

JAGADISH CHANDRA DEB DHABAL DEBAND ANOTHER.

DATE OF JUDGMENT:

26/11/1951

BENCH:

MUKHERJEA, B.K.

BENCH:

MUKHERJEA, B.K.

SASTRI, M. PATANJALI (CJ)

DAS, SUDHI RANJAN

BOSE, VIVIAN

CITATION:

1952 AIR 23 1952 SCR 269

CITATOR INFO :

D 1968 SC 794 (8)

E&D 1977 SC2425 (4)

RF 1980 SC 226 (11,14,15)

ACT:

Transfer of Property Act (IV of 1882), ss. 106,

107--Duration of lease--Presumption--Kabuliyat for 10

years--Payment of annual rent for two years only--Kabuliyat

inoperative--Nature of possession after the two years

--Whether adverse, as tenant from year to year, or as month-

ly tenant--Applicability of s. 106 to implied tenan-

cies--Presumption from payment of annual rent.

HEADNOTE:

The rule of construction embodied in s. 106 of the

Transfer Property Act 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.

270

The contract to the contrary contemplated by the said sec-

tion need not be an express contract; it may be implied, but

it should be a valid contract. If the contract is invalid

the section will regulate the duration of the lease.

When the rent reserved is an annual rent, a presump-

tion would arise that the tenancy was an annual tenancy

unless there is something to rebut this presumption. But

under s. 107 of the Transfer of Property Act a tenancy from

year to year or reserving an yearly rent can be made only by

a registered instrument.

The defendant executed a registered kabuliyat to the

Receiver who was managing an estate pending a suit, purport-

ing to take a plot of land on lease for a period of ten

years at a rental of Rs. 46 per annum and paid the first

year's rent of Rs. 46 on the 8th March, 1925, and the next

year's rent on the 16th March, 1926. No further rent was

paid by the defendant to the Receiver or to the proprietor

after that date. The proprietor, treating the defendant as

a monthly tenant served notice to quit on him on the 18th

July, 1942, asking the latter to vacate on the 7th August,

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1942, and instituted a suit for ejectment in July, 1943. The

kabuliyat was found to be inoperative in law and the defend-

ant contended that the payment and acceptance of annual rent

in 1925 and 1926 did not create a monthly tenancy but two

tenancies for one year each for two successive years, that

the relation of landlord and tenant came to an end on the

expiration of the second annual lease, and, as there was no

holding over, the suit was time-barred:

Held (i) that from the facts a tenancy could be pre-

sumed to have come into existence from 1924; (ii} as the

purpose of the tenancy was for building structures on the

land, under sec. 106 of the Transfer of Property Act the

tenancy must be presumed to be one from month to month in

the absence of a contract to the contrary; (iii) a contract

that the tenancy was for one year certain could not be

inferred in the present case from the fact that an annual

rent was paid in 1925 and 1926, inasmuch as the kabuliyat,

though inoperative in law, showed that the parties never

intended to create a lease for one year; (iv) on the facts

of the case it was quite proper to hold that the tenancy was

one from month to month since its inception in 1924 and the

suit was not time-barred.

Debendra Nath v. Shyama Prasanna (11 C.W.N. 1124) and

Sheikh Akloo v. Emaman (I.L.R. 44 Cal. 403) approved.

Aziz Abroad v. Alauddin Abroad (A.I.R. 1933 Pat. 485),

Md. Moosa v. Jaganand (20 I.C. 715) and Matilal v. Darjeel-

ing Municipality (17 C.L.J. 167) referred to.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 114 of

1950. Appeal from a judgment and decree of the High Court

of Patna (Shearer and Reuben JJ.) dated 5th November, 1948,

in Appeal No. 2064 of 1946,

271

which arose out of a decree of the District Judge of Purulia

in Title Appeal No. 116 of 1945. The facts are stated fully

in the judgment.

M.C. Setalvad, Attorney-General for India, (Nandial

Untwalia, with him) for the appellant.

B. C. De (Jyotirmoy Ghose, with him) for the respondent.

1951. November26. The Judgment of the Court was deliv-

ered by

MUKHERJEA J.---This appeal is on behalf of the defendant

and it arises out of a suit commenced by the plaintiff-

respondent, in the Court of the Subordinate Judge at Chai-

bassa, for recovery of possession of the land described in

schedule to the plaint, on the allegation that the defendant

was a monthly tenant in respect of the same, and that the

tenancy was determined by a notice to quit. The suit was

decreed by the trial court and the decision was affirmed, on

appeal, by the District Judge, Purulia, and on Second Ap-

peal, by a Division Bench of the High Court of Patna. The

defendant has now come up to this court on the strength of a

certificate granted under section 110, Civil Procedure Code.

Mr. Setalvad, appearing on behalf of the defendant-

appellant, stated to us at the outset that he would not

dispute the validity or sufficiency of the notice to quit

served upon his client, if on the facts of this case he is

held to be a monthly tenant under the plaintiff in respect

of the premises in suit. His contention, in substance, is

that the defendant was at no point of time a monthly tenant

under the plaintiff or his predecessor. There might have

been, according to the learned Counsel, two tenancies for

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one year each for two successive periods, but on the expiry

of the second yearly lease, which happened on 7th December,

1926, the defendant ceased to be a tenant and no fresh

tenancy was created by holding over as is contemplated by

section 116 of the Transfer of Property Act. As there was no

holding over, there could not be any question of a monthly

tenancy being brought into existence

272

under the provision of section 116 of the Transfer of

Property Act, and the present suit of the plaintiff having

been admittedly brought more than 12 years after the deter-

mination of the second yearly lease, is barred by limitation

under Article 139 of the Indian Limitation Act. The whole

controversy in this appeal thus centres round the point as

to whether the defendant was in fact a monthly tenant under

the plaintiff at the date when the notice to quit was

served upon him. To appreciate the respective contentions

that have been put forward upon this point by the learned

Counsel on both sides, it will be necessary to narrate

briefly the material facts in their chronological order.

The property in suit is a plot of land, measuring 4

bighas 12 cuttas, and is comprised in old Survey plot No.

578 of village Jugselai in the district of Singhbhum. The

entire village forms part of the Dhalbhum estate, of which

the plaintiff is admittedly the present proprietor. One

Charan Bhumiji was the " Prodhan" of village Jugselai from

some time before 1913 and on 24th July, 1913, the father of

the defendant, by a registered Patta, took a lease of about

:31 bighas of land appertaining to Survey plot No. 573 from

this Prodhan for purposes of cultivation. It is not disput-

ed that the property in suit is covered by this Patta. At

that time the proprietor of the Dhalbhum estate was Raja

Satrughna and he died in 1916, leaving behind him a will by

which the entire estate was bequeathed to the present plain-

tiff. The plaintiff's claim under the will was challenged

by one Partap Chandra Deo Dhabal who succeeded in getting

his name recorded as proprietor of the zemindari in the

Singhbhum Collectorate. Thereupon the plaintiff instituted a

suit (being Title Suit No. 67 of 1921) in the Court of the

Subordinate Judge at Midnapore for establishment of his

title to the zemindari and the suit was decreed by the trial

Judge. Against this decision, the defendant Pratap Chandra

Deo Dhabal took an appeal to the High Court of Calcutta and

during the pendency of this appeal, the High Court appointed

a Receiver who was put in

273

possession of the entire estate. On 8th December, 1924, the

defendant executed a registered Kabuliyat in favour of the

Receiver, by which he purported to take settlement of the

land in suit for a period of 10 years at a rental of Rs. 46

per annum and a selami of Rs. 250. There was a covenant in

the lease, which looks like one for perpetual renewal, and

it was to the effect that on the expiry of the term, if the

lessor did not require the land for his own purposes and

decided to re-settle it, the lessee would be entitled to

fresh settlement on enhanced,rent and on such terms as might

be then agreed upon between the parties. It appears from the

record that the selami money, amounting to Rs. 250, was paid

by the defendant to the Receiver several months before the

Kabuliyat was executed, and the rental amounting to Rs. 46

was paid for the first time on 8th of March, 1925. The next

payment of rent was made in the succeeding year, on 16th of

March, 1926. Admittedly, no further payment of rent was made

by the lessee either to the Receiver or to the proprietor

since then, up to this period. The High Court dismissed the

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appeal preferred by Pratap Chandra Deo Dhabal some time in

1924 and this order of dismissal was affirmed by the Judi-

cial Committee in May 1927. The Receiver was then dis-

charged and the plaintiff got possession of the entire

estate in July 1927. On April 15, 1937, the plaintiff

brought a suit for ejectment (being Title Suit No. 2 of

1937) against the defendant in respect of this property in

the Court of the Subordinate Judge at Chaibassa. The claim

was based substantially upon the terms of the Kabuliyat

executed by the defendant on 24th of December, 1924, and the

suit was, in fact, one for ejectment of a lessee on the

expiration of the period provided for in the lease. It was

only the renewal clause in the Kabuliyat that was challenged

as invalid and inoperative, not only because it was vague

and indefinite but also on the ground that the Receiver

acted beyond his authority in entering into a stipulation of

this character.

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274

The defendant in his written statement resisted the

plaintiff's claim for possession primarily on the ground

that he had acquired permanent rights in the land under

the Prodhan's Patta of 1913 and continuous occupation of

it since then for more than 12 years. The Kabuliyat of

1924, he attempted to ignore altogether. It was said that it

was executed only to avoid trouble and harassment at the

hands of the Receiver and that, being inoperative as a

lease, it could not, in any view, affect the prior rights

which he acquired under the Patta of 1913.

The trial judge decreed the suit. On appeal, the judg-

ment was reversed by the District Judge and the plaintiff's

suit was dismissed simply on the ground that the notice to

quit that was served on the defendant was ineffectual in law

to determine the tenancy. The District Judge found, first of

all, that the Prodhan's Patta was void and inoperative in

law and could not create any rights in the defendant, inas-

much as the Prodhan had no authority to settle lands of this

character. The Kabuliyat of 1924 was also held to be inef-

fectual as not amounting to a lease as defined by the Trans-

fer of Property Act. It was held, however, by the District

Judge that apart from the Kabuliyat, a tenancy was created

by payment and acceptance of rent in the years 1925 and 1926

and after 1926 the defendant occupied the position of a

monthly tenant by holding over under section 116 of the

Transfer of Property Act. Such tenancy could be determined

by fifteen days' notice, expiring with the month of tenancy,

but as the notice, which was served by the plaintiff upon

the defendant, did not fulfil this requirement, the plain-

tiff's suit was bound to fail. The District Judge, though

he dismissed the suit, gave the plaintiff a declaration to

the effect that the defendant was liable to eviction on

service of fifteen days' notice, expiring with the end of

the Bengali month of the tenancy. Against this decision,

the plaintiff took an appeal to the High Court of Patna, and

the appeal came up for hearing before Harries C.J. and Fazl

Ali J. The learned Judges affirmed the finding of the lower

appellate court that

275

the Prodhan's Patta did not create any rights in the defend-

ant and that the Kabuliyat of 1924 was also ineffectual as

a lease to give the defendant any tenancy right. The

learned Judges further held that the defendant did not

acquire any permanent right in the land by prescription or

otherwise and that by reason of the payment of rent to the

Receiver in the years 1925 and 1926 he became a tenant from

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month to month. In these circumstances the High Court con-

curred with the District Judge in holding that the notice to

quit was insufficient for the purpose of determining the

tenancy. It seems that the defendant made a strenuous

endeavour before the High Court to establish that as the

Patta of 1913 as well as the Kabuliyat of 1924 were both

invalid and inoperative, he was never a tenant in respect of

the land in suit and no tenancy could be created by the two

payments of rent, inasmuch as the Receiver had no authority

to receive them. It was contended, therefore, that the

plaintiff was in possession of the land as a trespasser all

along and thus acquired a good title by adverse possession.

The High Court, though it held definitely that the defendant

was a tenant from month to month, nevertheless kept open the

question as to whether the payment of rent to the Receiver

was tantamount to payment to the plaintiff. It was held

that as the notice to quit was defective, that was suffi-

cient for dismissal of the suit, and the declaration made in

the decree of the lower appellate court that the defendant

was liable to be evicted on service of fifteen days' notice,

expiring with the Bengali month of the tenancy, was directed

to be deleted. This judgment of the High Court was pro-

nounced on the 5th of May, 1942.

Soon after this on 18th July, 1942, the plaintiff served

a notice to quit on the defendant, asking him to vacate the

land on the 7th of August following, and as the defendant

refused to give up possession, the present suit was brought

on 22nd July, 1943. The plaint in the present suit is a

very simple one;it proceeds entirely on the findings record-

ed by the High Court in the previous litigation. The right

to

276

possession is not based on the terms of the Kabuliyat of

1024. The plaintiff avers that by reason of the payment of

rent on 8th March, 1925, and 16th March, 1926 the defendant

became a tenant from month to month under him and the tenan-

cy was determined by a proper notice to quit.

The defendant in his written statement raised several

pleas in answer to the plaintiff's claim. He reiterated his

rights under the Patta of 1913 and urged that by reason of

his holding possession of the land on assertion of a perma-

nent tenancy right for a long period of time, he acquired a

valid title to the property. As regards the Kabuliyat of

1924, it is said in one part of the written statement that

the defendant executed this document under misapprehension

of facts without knowing the contents thereof. But at anoth-

er place it is stated that the Kabuliyat was binding on the

plaintiff and he was not entitled to institute a suit in

contravention of its terms, without in any event refunding

the selami money. The defendant admitted, what he denied

in the earlier suit, that the payments made to the Receiver

amounted to payments to the plaintiff himself, although this

question was left open by the High Court on the previous

occasion. The other pleas raised in the written statement

are not material, except that a specific point was taken,

challenging the sufficiency of the notice to quit that was

served upon the defendant.

On these pleadings a number of issues were framed. The

trial judge held on a consideration of the materials placed

before him that the Prodhan's Patta was a void and inopera-

tive document and conferred no rights on the defendant. He

negatived the case, which the defendant attempted to make in

course of hearing, that the Kabuliyat executed by him was

obtained by threat and coercion. It was held by the Subordi-

nate Judge in accordance with the decisions of the Patna

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High Court on the point that the Kabuliyat could not operate

as a lease under the Transfer of Property Act, and conse-

quently the defendant did not acquire the rights of a lessee

under the same. He held, however,

277

that by payment and acceptance of rent a new tenancy was

created de hors the Kabuliyat, and as the new tenancy was

for building purposes, it. was a tenancy from month to month

under section 106 Transfer of Property Act, terminable by

fifteen days notice. As the notice was proper and, suffi-

cient, the trial judge decreed the plaintiff's suit.

Against this judgment, the defendant took an appeal to the

court of the District Judge, Purulia, and the District Judge

dismissed the appeal and affirmed the judgment of the trial

court. It appears that two points were raised by the defend-

ant before the District Judge in support of his appeal: one

was that the Kabuliyat of 1924 was effective as a lease and

consequently the defendant could not be ejected in contra-

vention of the terms thereof. At the same time it was con-

tended that there was no tenancy at all held by the defend-

ant under the plaintiff, inasmuch as the payments made to

the Receiver could not be regarded as payments to the plain-

tiff. The first point, the District Judge pointed out, was

contrary to the express decisions of the Patna High Court,

while the second was contradictory to the defendant's own

admission in the written statement.

The defendant then came up in Second Appeal before the

High Court of Patna and the appeal was heard by a Division

Bench, consisting of Shearer and Reuben JJ. The learned

Judges agreed in dismissing the appeal and affirming the

decree made by the courts below, but the grounds upon which

they based their decision are not identical. As regards the

nature of the tenancy created by implication of law in

consequence of the Receiver having accepted payment of rent

from the defendant, it was held by Reuben J. that when the

Receiver accepted rent in 1925, it should be presumed that

the parties intended to create a tenancy for one year and

when he accepted rent again in 1926, such acceptance amount-

ed to his assenting to the defendant's holding over; and in

view of the purpose for which the tenancy was created, the

defendant from that time became a tenant from

278

month to month under the provision of section 116, Transfer

of Property Act. Shearer, J., felt difficulty in accepting

this view though in his opinion if a periodic tenancy was

created at all, it was from month to month and not from

year to year. There are observations, however, in the latter

part of the judgment of Shearer, J., which would go to show

that in his opinion the creation of two leases, each for one

year, could be fairly gathered from the admitted facts of

the case. The learned Judge was not sure, however, as to

whether the defendant ever became a tenant of the plaintiff.

He discussed the nature of the renewal clause contained in

the Kabuliyat and held it to be void for uncertainty. He

also negatived the defendant's plea on the strength of

adverse possession. His conclusion was that whatever view

might be taken regarding these points, the defendant had no

valid defence to the plaintiff's claim for eviction and

consequently the decision of the courts below was right. It

is the propriety of this decision that has been challenged

before us in this appeal.

Mr. Setalvad, in support of his client's case, has not

called in aid the Prodhan's Patta of 1913; nor has he placed

any reliance upon the Kabuliyat of 1924 and the covenant for

renewal contained therein. He has not disputed before us

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that the payments made to the Receiver were in reality

payments to the plaintiffs, and has conceded that a tenancy

could be created by implication by reason of his client

having paid and the Receiver having accepted rents in re-

spect of the suit premises. His contention, as indicated

already, is that by reason of the payment and acceptance of

rent, there were two tenancies for one year each, creat-

ed for two successive years; but the relationship of

landlord and tenant between the parties came to an end on

the expiration of the second annual lease. As there was no

holding over by the defendant since then as contemplated by

section 116, Transfer of Property Act, there was no subsist-

ing tenancy at any time after December, 1926, and the plain-

tiff's suit instituted in the year 1943 was obviously time

barred.

279

Mr. De, appearing for the plaintiff-respondent, has, on

the other hand, contended that the tenancy that was created

by payment and acceptance of rent in the year 1925 was from

the beginning a tenancy from month to month under the provi-

sion of section 106. Transfer of Property Act. Alterna-

tively, he has argued that if a tenancy for one year only

was created in the year 1925, then after the expiration of

that one year's lease the defendant held over and the

Receiver's assent to his continuing in possession is

evidenced by acceptance of rent from him in the year

1926. The tenancy thus created would be a tenancy from

month to month under section 116, Transfer of Property Act.

Lastly, it is argued that even if two successive tenancies

were created for one year each, the facts admitted and

proved would go to show that the tenant held over after the

second annual lease and consequently a tenancy from month to

month came into existence in accordance with the provision

of section 116, Transfer of Property Act, even though no

rent was demanded by the landlord after 1926. The contro-

versy between the parties so far as this appeal is con-

cerned, therefore, narrows down to the following three

points :--

(1) What was the nature of the tenancy created by ac-

ceptance of rent by the Receiver from the defendant on the

8th of March, 1925 ? If it was a tenancy from month to

month, it is not disputed on behalf of the defendant that no

question of holding over would at all arise and the plain-

tiff would be entitled to succeed.

(2) If in 1925 a tenancy was created for one year, can

the landlord's assent to the defendant's continuing in

possession be inferred from the fact that rent was accepted

from the defendant in March, 1926 ?

(3) If the payment and acceptance of rent in March,

1926, brought into existence a tenancy for another year,

was there any subsequent tenancy created after the

second year, although there was no ,demand or acceptance of

rent by the landlord since then ?

280

So far as the first point is concerned, the courts

below have proceeded on the view that a registered instru-

ment signed by the landlord was necessary to create. a valid

lease for ten years. That view was not questioned before us

and we express no opinion on this point. Proceeding, there-

fore, on the assumption that even though the parties might

have intended to create a lease for 10 years, no operative

]ease came into existence, the only facts admitted are that

the defendant remained in possession of the land belonging

to the plaintiff with the permission of the Receiver who

represented the plaintiff's estate, and paid rent to the

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latter. From these facts a tenancy could be fairly presumed

and the point for determination is, what was the duration of

the tenancy that was created in the present case? Section

106 of the Transfer of Property Act lays down:

"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 les-

see, by fifteen days' notice expiring with the end of a

month of tenancy."

The section lays down a rule of construction which is

to be applied when there is no period agreed upon between

the parties. In such cases the duration has to be determined

by reference to the object or purpose for which the tenancy

is created. The rule of construction embodied in this sec-

tion applies not only to express leases of uncertain dura-

tion but also to leases implied by law which may be inferred

from possession and acceptance of rent and other circum-

stances. It is conceded that in the case before us the

tenancy was not for manufacturing or agricultural purposes.

The object was to enable the lessee to build structures upon

the land. In these circumstances, it could be

281

regarded as a tenancy from month to month. unless there was

a contract to the contrary. The question now is, whether

there was a contract to the contrary in the present case ?

Mr. Setalvad relies very strongly upon the fact that the

rent paid here was an annual rent and he argues that from

this fact it can fairly be inferred that the agreement

between the parties was certainly not to create a monthly

tenancy. It is not disputed that the contract to the con-

trary, 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. If it

is no contract in law, the section will be operative and

regulate the duration of the lease. It has no doubt been

recognised in several cases that the mode in which a rent is

expressed to be payable affords a presumption that the

tenancy is of a character corresponding there to. Conse-

quently, when the rent reserved is an annual rent, the

presumption would arise that the tenancy was an annual

tenancy unless there is something to rebut the presumption.

But the difficulty in applying this rule to the present case

arises from the fact that a tenancy from year to year or

reserving a yearly rent can be made only by registered

instrument, as laid down in section 107 of the Transfer of

Property Act(1). The Kabuliyat in the case before us is

undoubtedly a registered instrument, but ex-concessis it is

not an operative document at all and cannot consequently

fulfil the requirements of section 107 of the Transfer of

Property Act.

This position in fact is not seriously controverted by

Mr. Setalvad; but what he argues is that a lease for one

year certain might fairly be inferred from the payment of

annual rent, and a stipulation like that would not come

within the mischief of section 107 of the Transfer of

Property Act. His contention is that the payment of an

annual rent, as was made in the present case, is totally

inconsistent with a monthly lease. We are not unmindful of

the fact that in

(1) Vide Debendra Nath v. Syama Prasanna, 11 C.W.N. 1124,

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1126

37

282

certain reported cases, such inference has been drawn. One

such case has been referred to by Mr.Justice Reuben in his

judgment(1), where reliance was placed upon an earlier

decision of the Calcutta High CoUrt(3). A similar view

seems to have been taken also in Matilal v. Darjeeling

Municipality(3).

But one serious objection to this view seems to be that

this would amount to making a new contract for the parties.

The parties here certainly did not intend to create a lease

for one year. The lease was intended to be for a

period exceeding one year, but as the intention was not

expressed in the proper legal form, it could not be given

effect to. It is one thing to say that in the absence of a

valid agreement, the rights of the parties would be regulat-

ed by law in the same manner as if no agreement existed at

all; it is quite another thing to substitute a new agreement

for the parties which is palpably contradicted by the admit-

ted facts of the case.

It would be pertinent to point out in tiffs connection

that in the Second Appeal preferred by the plaintiff against

the dismissal of his earlier suit by the lower appellate

court, the High Court definitely held that the defendant's

tenancy was one from month to month under section 106,

Transfer of Property Act, and the only question left open

was whether payment to the Receiver amounted to payment to

the plaintiff himself. In this suit the defendant admitted

in his written statement that payment to the Receiver had

the same effect as payment to the plaintiff, and the trial

judge took the same view as was taken by the High Court on

the previous occasion, that by payment to and acceptance of

rent by the Receiver, the defendant became a monthly tenant

under section 106, Transfer of Property Act. In his appeal

before the District Judge, which was the last court of

facts, the only ground upon which the defendant sought to

challenge this finding of the trial judge was that the

Receiver was an unauthorised person because of the 'decision

of

(1) Aziz Ahmad v. Alauddin Ahmad, A.I.R. 1933 Pat. 485.

(2) Md. Moosa v. Jaganund 20 I.C. 715 (3) 17 C.L.J. 167.

283

the Judicial Committee which set aside his appointment and

consequently acceptance of rent by such person could not

create a monthly tenancy. This shows that it was not the

case of the defendant at any stage of this suit that because

one year's rent was paid, a tenancy for one year was brought

into existence. We think, therefore, that on the facts

of this case it would be quite proper to hold that the

tenancy of the defendant was one from month to month since

its inception in 1924. This view finds support from a

number of reported cases(1), and in all these cases the rent

payable was a yearly rental. On this finding no other

question would arise and as the validity of the notice has

not been questioned before us, the plaintiff would be enti-

tled to a decree in his favour. The appeal thus fails and is

dismissed with costs.

Appeal dismissed.

Agent for the appellant: R.C. Prasad.

Agent for the respondents: S.P. Varma,

Vide Debendra Nath v. Syama Prasanna, 11 C.W.N. 1124;

Sheikh Akloo v. Emaman, I.L.R. 44 Cal. 403.

284

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10

Reference cases

Description

Supreme Court's Landmark Ruling on Implied Tenancy and Lease Duration

The landmark Supreme Court judgment in Ram Kumar Das v. Jagadish Chandra Deb Dhabal Deb remains a cornerstone for understanding the Transfer of Property Act, particularly the legal principles surrounding the lease duration presumption. This pivotal 1951 ruling, readily accessible on CaseOn, clarifies the nature of a tenancy when an initial long-term lease agreement is legally void but rent has been paid and accepted by the landlord. It meticulously untangles the relationship between Section 106 and Section 107 of the Act, providing enduring guidance for property law practitioners.

The Core Legal Dilemma: A Factual Breakdown

The case revolved around a defendant who executed a registered 'kabuliyat' (a tenant's agreement to lease) for a ten-year period, with an annual rent of Rs. 46. This kabuliyat, however, was legally inoperative as a long-term lease because it wasn't a registered instrument executed by both the lessor and lessee as mandated by the Transfer of Property Act. The defendant paid the annual rent for two consecutive years (1925 and 1926) and then ceased all payments. Years later, in 1942, the property owner (proprietor) treated the defendant as a monthly tenant and served a notice to quit, subsequently filing a suit for ejectment.

The Central Question Before the Court

The primary issue was to determine the nature of the tenancy that arose from the defendant's possession and the payment of annual rent, given the invalidity of the original 10-year lease agreement. The appellant (tenant) argued that the payment of annual rent created two distinct one-year leases, the second of which expired in 1926. Since more than 12 years had passed since then, he claimed the suit was time-barred. The respondent (landlord) contended that the tenancy was, by legal default, a month-to-month tenancy from its inception, making the 1942 notice valid.

Governing Legal Principles: Sections 106 and 107 of the TPA

The Supreme Court's analysis hinged on the interplay between two crucial sections of the Transfer of Property Act, 1882:

  • Section 106 (Duration of certain leases in absence of written contract or local usage): This section establishes a legal presumption. It states that in the absence of a contract to the contrary, a lease for agricultural or manufacturing purposes is deemed to be a year-to-year lease. For any other purpose (such as for building, as in this case), it is deemed to be a month-to-month lease.
  • Section 107 (Leases how made): This section outlines the formal requirements for creating a lease. It mandates that 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 registered instrument.

Supreme Court's Analysis: Weaving Facts and Law

The Court systematically dismantled the appellant's arguments by applying these principles to the facts of the case.

The Presumption of Section 106 Takes Precedence

The Court acknowledged that a tenancy was indeed created by implication through the tenant's possession and the landlord's acceptance of rent. However, the critical question was its duration. The appellant's main argument was that the payment of an annual rent constituted a "contract to the contrary" under Section 106, which should override the default presumption of a monthly tenancy.

The Supreme Court rejected this contention, delivering a crucial clarification: a "contract to the contrary" must be a valid and legally enforceable contract. According to Section 107, any lease reserving a yearly rent must be created by a registered instrument. Since the annual rent payments were made under a void kabuliyat and not a valid registered lease deed, the implied agreement for a yearly tenancy was legally invalid. In the absence of a valid contract, the legal presumption established by Section 106 must apply.

This intricate interplay between Sections 106 and 107 can be complex. For legal professionals on the go, resources like the 2-minute audio briefs on CaseOn.in offer a quick and effective way to grasp the nuances of such critical rulings.

The Rejection of a One-Year Lease Theory

The Court also dismissed the idea that the annual rent payment created a tenancy for one year certain. It reasoned that this would amount to the court creating a new contract for the parties that was contrary to their original (though legally failed) intention of a ten-year lease. The law doesn't substitute a new agreement; it only regulates the rights of the parties when their intended agreement fails to take legal effect.

The Final Verdict

The Supreme Court concluded that with no valid contract in place to suggest a yearly tenancy, the default rule under Section 106 was the only applicable law. Since the purpose of the tenancy was for building structures (categorized as "any other purpose"), it was deemed a tenancy from month to month from its very inception in 1924. Therefore, the suit was not time-barred, the notice to quit was sufficient, and the landlord was entitled to eject the tenant. The appeal was dismissed.

Judgment in a Nutshell

In essence, the Supreme Court held that when a lease for over a year is void for want of a valid registered instrument, the nature of the resulting tenancy is determined by the default presumption in Section 106 of the Transfer of Property Act. The mere payment and acceptance of an annual rent do not automatically create a year-to-year tenancy, as such an implied agreement would be invalid under Section 107. The purpose of the lease thus becomes the deciding factor, leading to a month-to-month tenancy for all non-agricultural and non-manufacturing purposes.

Why This Case Matters for Lawyers and Law Students

This judgment is a foundational text in property law for several reasons:

  1. Clarifies the Hierarchy: It establishes a clear operational hierarchy between Section 106 and Section 107 of the TPA. The formal requirements of Section 107 must be met for a year-to-year tenancy to exist, and an implied agreement cannot override this statutory mandate.
  2. Defines "Contract to the Contrary": It provides an authoritative interpretation that the "contract to the contrary" mentioned in Section 106 must be a legally valid and enforceable contract.
  3. Guidance on Defective Leases: It offers indispensable guidance for litigation involving defective or unregistered lease deeds, which are common in practice. It clarifies how to determine the rights and liabilities of parties in such situations.

For any student or practitioner of property law, understanding this case is crucial for mastering the principles of implied tenancies and the statutory framework that governs them.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute legal advice. It is recommended to consult with a qualified legal professional for advice on any specific legal issues.

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