Partly allowed

M/S Siya Ram Brothers v. Shri Om Prakash Bhargava

Allahabad HC8 Jan 2019CLRE/12/2000

Case brief

AI extract

What is this about?

Civil revision challenging a decree for rent recovery and eviction. The High Court upheld the eviction decree but set aside the arrears decree where the landlord conceded. Tenancy termination by notice stands; mere rent acceptance deemed not to waive the notice.

What did the court decide?

Eviction decree upheld; recovery of arrears decree set aside. Tenant granted six months possession balance vacant possession tendered and rent paid.

M/S Siya Ram Brothers Vs Shri Om Prakash… — Contract and Commercial Disputes | Allahabad HC (2019)

AFR

Court No. - 19

Case :- CIVIL REVISION No. - 12 of 2000

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Revisionist :- M/s. Siya Ram Brothers Opposite Party :- Shri Om Prakash Bhargava Counsel for Revisionist :- J.C.Joshi,Manish Goyal,Ram Chandra,Sunita Agarwal

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Counsel for Opposite Party :- Rajesh Tandon,Arun Kumar Shukla,Komal Mehrotra, R.K. Tandan,Rahul Sahai

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Hon'ble Manoj Kumar Gupta,J.

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The instant revision under Section 25 of the Provincial Small Causes Court Act, 1887 calls into question the judgment and decree dated 07.12.1999 passed by the court of Small Causes in SCC Suit No. 40 of 1998 decreeing the suit of the plaintiff-respondent for recovery of arrears of rent and taxes and for eviction.

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The suit was instituted alleging that the revisionist was tenant of a shop on the ground floor of House No. 96/2, Colonelganj, Kanpur Nagar on payment of Rs. 2,500/- per month as rent and Rs. 450/- as water tax, and sewer tax at the rate of 18 percent, total Rs. 2950/-. The tenancy was terminated by a notice dated 01.06.1998 served upon the revisionist on 06.06.1998. It was specifically pleaded that as the rent of the shop exceeded Rs. 2000/- per month, therefore U.P. Act No. 13 of 1972 was not applicable. It was admitted that rent and municipal taxes stood paid upto August 1998. The plaintiffs claimed mesne profits, arrears of taxes, apart from decree of eviction. In respect of municipal taxes, it was admitted that taxes @ Rs.450/- per month was paid for some time. It was asserted that the said amount was paid on account of misrepresentation, though a lesser amount was payable.

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The suit was contested by the revisionist by filing a written statement in which it was not denied that the rent of the premises was Rs. 2400/- per month. The revisionist further asserted that rent up to 31st August, 1998 stood paid to the plaintiff-opposite party. The revisionist

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also alleged that after service of notice the plaintiff had accepted rent and taxes for the period upto August, 1998 when sent to him by cheque along with covering letter dated 16.9.1998, consequently, the notice stood waived.

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The trial court framed three points for determination. While deciding the first point regarding rate of rent, it held that the rent was Rs. 2500/- per month apart from taxes @ 18%, total amount being Rs. 2950/-. The second question for determination framed by the trial court was whether the tenancy stood terminated by notice dated 01.06.1998. While deciding the said issue, the trial court held that the notice was duly served upon the revisionist. The trial court thereafter proceeded to consider the main contention of the revisionist regarding waiver of notice in view of Section 113 of the Transfer of Property Act, 1882 (for short 'the Act')on account of the fact that the plaintiff-opposite party had accepted cheque of Rs. 40,754.50 on 16/17.09.1998. The trial court did not agree with the contention of the revisionist that the notice stood waived thereby as it did not find any intention on part of the plaintiff to treat the lease as subsisting. The third issue decided by the trial court is with regard to alleged arrears of rent and taxes. It found the revisionist in default of a sum of Rs.6,870/- and accordingly decreed the amount in favour of the plaintiff and against the revisionist.

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Sri Manish Goyal learned counsel for the revisionist vehemently submitted that the finding recorded by the trial court that notice did not stood waived, is manifestly illegal. According to him the trial court has failed to take into consideration the entire facts including the pleadings of the parties; therefore, the finding recorded on the question of waiver is illegal. In support of his contention, it is urged by him, that after issuance of notice dated 01.06.1998 culminating in filing of the suit, the plaintiff opposite party had entered into a settlement through negotiations. It was agreed between the parties that an amount of Rs. 40,754.50 would clear of the entire dues and accordingly a cheque of Rs.40,754.50 along with covering letter dated 16.09.1998 giving full particulars was handed over

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to Shri S.L. Goyal, Advocate of the plaintiff which was duly encashed by the plaintiff. It is urged that the acceptance of the said amount by the plaintiff-opposite party on 16/17.09.1998 had resulted in waiver of the notice. The court below has altogether ignored from consideration the said material aspect. In support of his contention he has placed reliance upon the following judgments:-

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Sarup Singh Gupta vs. S. Jagdish Singh and others, 2006 (2) AWC 1925 (SC).

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Shanti Prasad Devi and another vs. Shankar Mahto and others, AIR 2005 SC 2905

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Associated Hotels of India Ltd vs. S.B. Sardar Rajnit Singh, AIR 1968 SC 933

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C. Albert Morris vs. K. Chandrasekaran and others, (2006) 1 SCC 228.

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Sri Manish Goyal also submitted that the decree of arrears of rent and taxes passed against the revisionist is wholly illegal inasmuch as the specific plea of the revisionist was that after payment of Rs. 40,754.50/-, no further amount remained unpaid but without determining the said issue, the trial court has accepted the case of the plaintiff-opposite party as gospel truth.

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Sri Rahul Sahai learned counsel for the plaintiff opposite party on the other hand, while placing reliance upon the same judgments of the Supreme Court in Sarup Singh Gupta and Shanti Prasad Devi urged that the finding recorded by the trial court repelling the submission that notice stood waived is perfectly in accordance with the law laid down by the Supreme Court in the said judgments. He submitted that the plaintiffopposite party, in the plaint specifically clarified that after issuance of notice demanding Rs.47,625.50 when cheque of Rs.40,654.50 was handed over to Shri S.L. Goyal, Advocate, the same was accepted in partial discharge of the obligation of the revisionist towards rent and municipal taxes payable for the building under his tenancy. He further submitted that

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for the said reason the suit was instituted for recovery of the balance amount of Rs. 6,870/-. The rent for the month of July and August 1998 was accepted by way of damages for use and occupation and did not result in waiver of the notice. The notice was followed by filing of the suit on 05.11.1998 evincing a clear intention that plaintiff-opposite party had not waived the notice nor has treated the lease to be subsisting.

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With regard to the second submission, regarding decree for arrears of rent and municipal taxes, he submitted that although it has been passed strictly in accordance with law but to cut short the controversy, he is ready to give up the said part of the decree and would not claim its execution.

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The issue raised is no more res-integra. In Associated Hotel of India Limited , the Supreme Court observed that waiver is an intentional relinquishment of a known right. There can be no waiver unless the person against whom the waiver is claimed had full knowledge of his right and of facts enabling him to take effectual action for the enforcement of such rights. After considering the said principle, the Supreme Court in that case repelled the contention that the plaintiff therein had waived his right to seek eviction of the appellant on the ground of subletting.

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In C. Albert Morris , the issue for consideration was whether the acceptance of rent by the landlord after termination of the lease agreement by valid notice would result in its waiver. In paragraph 26 of the Law Report the court observed as under:-

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" Though the arguments of the learned Senior Counsel appearing for the appellant are attractive on the first blush yet on a careful reconsideration of the same, it has no merits. The judgments cited by the learned Senior Counsel appearing for the appellant are not only distinguishable on facts but also on law. Much argument was advanced on the receipt of the rent by the landlord after the cancellation of the lease. The consensus of judicial opinion in this country is that a mere continuance in occupation of the demised premises after the expiry of the lease, notwithstanding the receipt of an amount by the quondam landlord, would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in

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possession. In this context, we may refer to the judgment of this Court in Raptakos Brett & Co. Ltd. v. Ganesh Property. In para 13 of the said judgment, this Court held as under:

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"13. In view of the aforesaid settled legal position, it must be held that on the expiry of the period of lease, the erstwhile lessee continues in possession because of the law of the land, namely, that the original landlord cannot physically throw out such an erstwhile tenant by force. He must get his claim for possession adjudicated by a competent court as per the relevant provisions of law. The status of an erstwhile tenant has to be treated as a tenant at sufferance akin to a trespasser having no independent right to continue in possession "

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(emphasis supplied)

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Again in paragraph 29 of the same judgment, the Supreme Court quoted with approval a passage from judgment in R.V. Bhupal Prasad vs. State of A.P., (1995) 5 SCC 698 and thereafter concluded by observing thus:-

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" We are, therefore, of the opinion that mere acceptance of rent by the landlord, the first respondent herein, from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer on the erstwhile tenant the status of a tenant or a right to be in possession. We answer this issue accordingly ."

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(emphasis supplied)

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The next authority of the Supreme Court cited by the parties in Sarup Singh Gupta , bears a striking resemblance with the facts of the instant case. Therein two notices to quit were given on 10.02.1979 and 17.03.1979. The suit was instituted on 02.06.1979. The landlord accepted rent for the month of April and May and thereafter. The question for consideration before the Supreme Court was whether this would constitute an act on part of the landlord to treat the lease as subsisting. The Supreme Court while considering the said issue doubted the correctness of judgment of Culcutta High Court cited before it and observed thus:-

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“Learned Senior Counsel also relied upon a decision of a learned Single Judge of the Calcutta High Court, reported in

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AIR 1926 (Calcutta) 763, wherein it was held that where rent is accepted after the notice to quit, whether before or after the suit has been filed, the landlord thereby shows an intention to treat the lease as subsisting and, therefore, where rent deposited with the Rent Controller under the Calcutta Rent Act is withdrawn even after the ejectment suit is filed, the notice to quit is waived. In our view, the principle laid down in the aforesaid judgment of the High Court is too widely stated, and cannot be said to be an accurate statement of law. A mere perusal of Section 113 leaves no room for doubt that in a given case, a notice given under Section 111, Clause (h), may be treated as having been waived, but the necessary condition is that there must be some act on the part of the person giving the notice evincing an intention to treat the lease as subsisting. Of course, the express or implied consent of the person to whom such notice is given must also be established. The question as to whether the person giving the notice has by his act shown an intention to treat the lease as subsisting is essentially a question of fact. In reaching a conclusion on this aspect of the matter, the Court must consider all relevant facts and circumstances, and the mere fact that rent has been tendered and accepted, cannot be determinative .”

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(emphasis supplied)

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In paragraph 7 of the said judgment, the Supreme Court noted with approval the law laid down in its earlier judgment in Shanti Prasad Devi and after noticing the facts and circumstances of that case, held as under:-

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“ In the instant case, as we have noticed earlier, two notices to quit were given on 10th February, 1979 and 17th March, 1979. The suit was filed oh June 2, 1979. The tenant offered and the landlord accepted the rent for the months of April, May and thereafter. The question is whether this by, itself constitute an act on the part of the landlord showing an intention to treat the lease as subsisting. In our view, mere acceptance of rent did not by itself constituted an act of the nature envisaged by Section 113, Transfer of Property Act showing an intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted rent which was being paid to him by the tenant It cannot, therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the practice followed by courts is

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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. In the instant case, we find no other fact or circumstance to support the plea of waiver. On the contrary the filing of and prosecution of the eviction proceeding by the landlord suggests otherwise .”

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(emphasis supplied)

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The above authorities unequivocally lay down that mere acceptance of rent would not amount to waiver, rather the intention of the landlord, while accepting the rent alongwith the attending facts and circumstances is determinative of the issue as to whether he wanted to treat the tenancy as subsisting or not. It is basically an issue of fact.

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In the facts of the instant case, it would appear that indisputably the rent of the premises was a sum exceeding Rs.2000/- and thus the protection available to a tenant under the U.P. Act XIII of 1972 was not available. The tenancy was determinable by a simple notice under Section 106 of the Transfer of Property Act, 1882 without establishing default in payment of rent as was otherwise required to be proved in case protection under the Act is available. Albeit the notice dated 01.06.1998 required the revisionist to make payment of arrears of rent and municipal taxes but it was not a notice of forfeiture of tenancy under Section 111(g) of the Transfer of Property Act but a notice simplicitor under clause (h). It clearly states that after expiry of 30 days of the receipt of notice, the tenancy would stand terminated as the plaintiff does not want to keep the revisionist as his tenant. The specific case of the plaintiff-opposite party in paragraph 5 of the plaint was that cheque of Rs. 40,754.50/- was accepted in part discharge of the amount due and payable by the revisionist without foregoing the right to claim the balance amount by taking recourse to legal proceedings.

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In Raptakos Brett & Co. Ltd. Vs. Ganesh Properties, (1998) 7 SCC 184, the Supreme Court while considering a similar plea held that

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even after termination of tenancy, a tenant cannot be thrown out of premises physically, but could be evicted in accordance with law. He therefore, continues as tenant at sufferance. The acceptance of rent from such a tenant is generally in lieu of charges for use and occupation, as observed in Sarup Singh Gupta .

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The lot of emphasis was given by Sri Manish Goyal upon paragraph 2 of the plaint, wherein the plaintiff opposite party stated that rent and municipal taxes stood paid up to 31.08.1998. It is urged that the plaintiffopposite party thereby admitted the revisionist to be his tenant and accordingly the notice given on 1st of June, 1998 stood waived. He has further submitted that in response to the allegations made in the plaint the revisionist specifically referred to the discussion between the counsel and pursuant whereof a cheque of Rs. 40754.50 was handed over and duly encashed by the plaintiff-opposite party. This according to him clearly showed an intention on part of the plaintiff to treat the lease as subsisting.

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However I am unable to accept the aforesaid contention of learned counsel for the revisionist. As noted above, the circumstance in which the plaintiff had accepted the cheque, was disclosed in the plaint itself. As also noted above, the suit was not grounded on forfeiture of tenancy for non-payment of rent but it was under Section 111(h) of the Transfer of Property Act on account of tenancy having been determined by a notice simplicitor. Concededly the notice was followed by institution of a suit and which was diligently presented by the plaintiff to its logical conclusion. All these facts when taken together, would show a clear intention on part of the plaintiff opposite party not to treat the lease as subsisting. The trial court has entered a specific finding that the defendant could not prove any fresh lease coming into existence on basis of mutual agreement, as contended by the revisionist.

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Accordingly the finding recorded by the trial court that acceptance of rent after serving the notice under Section 106 would, in the facts and circumstances of the instant case, not result in waiver, is fully justified and does not warrant any interference.

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Since Sri Rahul Sahai conceded to forgo the claims for arrears of rent and municipal taxes as decreed by the trial court, therefore the said part of the decree is hereby set aside. As a result, the instant revision succeeds in part. The decree of eviction is upheld while decree for recovery of arrears of rent and municipal taxes stands set aside.

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At this stage, Sri Manish Goyal learned counsel for the revisionist prayed for six months time to vacate, to which Sri Rahul Sahai learned counsel for the plaintiff-opposite party has no objection.

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Accordingly it is hereby provided that the revisionist shall be permitted to continue in possession for a period of six months from today provided the revisionist gives an undertaking before the court below that it would hand over vacant possession of the premises to the plaintiff on or before the expiry of six month from today and also tenders rent/damages at the rate of Rs. 5000/- as agreed to by learned counsel for the parties for a period of six months within four weeks from today. It shall be open to the plaintiff-opposite party to withdraw the said amount without furnishing any security. In case of default of any of the conditions stipulated herein the protection granted would stands vacated automatically and the decree of eviction would become executable forthwith.

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Order Date :- 8.1.2019 Rohit

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(Manoj Kumar Gupta, J.)

M/S Siya Ram Brothers v. Shri Om Prakash Bhargava

Case brief

What is this about?

What did the court decide?

M/S Siya Ram Brothers v. Shri Om Prakash Bhargava

Case brief

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What the court decided

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