Lessees continued in possession of leased land after tenancy expired by efflux of time, paying rent under rent-control protection. The Supreme Court held there was no holding over within s. 116 since neither party's intention to create a new tenancy was proved, dismissed the appeal, and allowed three months to vacate.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
890
BHAW ANJI LAKHAMSID & ORS.
v.
HIMATLAL JAMNADAS DANI & ORS.
December 14, 1971
[C.~ A. VAIDIALINGAM AND K. K. MATHEW, JJ.]
Transfer oj Property Act. s. 116 arrd Bombay Rems, Hotel and Lodging House Rates (Control) Aci, 1947-Contractual renGncy determined by ¢lux of time-Tene1ncy thereafter protected by statuteTenant continuing in possession and landlord accepting rent-Without proof that both parties had the necessary intention r.here is no 'holding over' by the tenant within meaning of s. 116 oj Transfer of Property Act.
c
The appe1lants were lessees of a plot of land in Bombay. The lease w~ granted in 1948 and was determined by efflux of time on September 30, 1958. However the appellants continued to occupy the land and to pay rent to the essors. On August 7, 1959 the lessors gave notice purporting to terminate the tenancy in the land by the end of September 1959 on the ground inter alia that the lessors required the plot for the purpose of putting up construction on it. Since the appellants did not vacate the premises the bssors filed a suit on October 22, 1959 in the Small Causes Court, Bombay. The appellants contended in defence that the land was not required by the lessors bona fide for purposes of construction. They further .contended that they were tenants holding over within the meaning of s. 116 · of the Transfer of Property· Act, and that since the landlord had accepted rent after the tenancy had determined by effiux of time a nw lease had come into being and as the original lease was for a manufacturing purpose the new lease was by implication for the same purpose and consequently six months' notice was required for its termination by the lessors. The Trial Court held that the plaintiff required the plot bona fide for constructing a new building within the meaning of clause (i) of sub-section (1) of sction 13 of the Bombay Rents, Hotel and Lodging House Rates (Comrol) Act, 1947. The Court also helc1 that the tenancy tcrmin3.ted by efftux of time, but that the )cssecs continued in possession .hy virtue of the immunity from -eviction conferred by the aforesaid Bombay Act and so they were not holding over within the meaning of s. 116 of the Transr·r of Property· Act. The Trial Court '3CCordingly dcrced the suit. In appeal the lppell:ltc Court confirmed the d-ecree. The High Court rejected the appellants' petition under Art. 227 of the Constitution. ln appel to this Co,.trt by special lc<.vc.
D
E F G
HELD : The act of holding over after the expiration of the term dres not create. a tenanc~ of any kind. Tf a tenant remains in possession after G the determination of the L:!ase the common law rule is thLlt he is a tenant on sufferance. A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without1 his consent. The forme·r i~ a tenant on suffe'rence in English law nnd the latter a lr!n::mt holding over a tenant-at-will. In view of the concluding words of s, 116 of the Transfer of Property Act a lease holding over is in a bett.cr position than H a tenant-at-will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy. What the section contemplates is that on one side there should be an offer of taking a new lease evidenced by the lcs~ce dr sub-lessee rcm!linin!!
BHAWANJI v. IDMATLAL (Mathew,./.)
89.t
A in possession of the property after his term was over and on the otb:r side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise. The basis. of the section is thus a bilateral contract between the erstwhile landlord and the erstwhile tenant. If the tenant has the statutory right to remain in possession, and if he pays the rent, that will not normally be referable to an offer for his continuing in possession which can be converted into B a contract by acceptance thereof hy the landlord. 1894 B-D; 897 0-H)
In the case of normal tenancy a landlord is entitled where he does. not accept th~ rent after the notice to quit, to file a suit in ejectment and obtain a dceree for possession, and so his acceptance of rent is an Unequivocal act referable only to his desire to assent tl> the. tenant continuing in possession. T.hat is not so where a Rent Act e"-ists; and if the tenant says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenant's continuing in posc session it is for the tenant to establish it. [898 B-C]
In the present case neither the landlord's desire that the appellants should continue in possession ndr the necessary animus on the part of the tenant had been proved. The parties had not been shown to be ad ~dem. !898 D]
Ac.k:ordingly it must be held that there was no holding over by theD appellants and the appeal must be dismissed. Ganga Dutt Murarku v. Kartjk Chandra Das, L19611 3 S.C.R. 813~ re-affirmed .
.Kai Khushroo Bezon;ee Capadia Y. Bai lcrbai Hirjibhoy Warden & Atlr., 1949-50] F.C.R. 262. Davies v. Bri~tow, [1920] 3 K.B. 428. Morriwon v. 1acobs, [1945] 1 K. B. 577 and Mangilal v. Sugan Chand, A.I.R. 1965 S.C. 101, applied.
E Manujendra Dutt v. Purendu Prosad Roy Chowdhury & Ors., [1967] l S.C.R. 475, distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1546 of 1969.
V. Jo,.f. Tarkunde, S. K. Dholakia and S.- K. Bagga, for appellants Nos. 1 and 3. F
S. K. Bagga. for appellant No. 2.
D. V. Pntel,. A. G. Parikh and B. R. Agarwalt~. for the respondents.
The Judgment __ of the Court was delivered by
G
Mathew, J. This is an appeal, by special leave, from the judgment of the High Court of Bombay dismissing a petition filed under Article 227 of the Constitution praying for issue of an approprivate writ or order quashing the order dated 28-2-1968 passed by the Full Bench, Small Causes Court, Bombay, in appeal No. 95 of 1963 from the order dated 21-2-1963 passed by the Judge. 1l Small Causes Court, Bombay, in R.A.E. Suit No. 9293 of 1959.
In this appeal we are CQncerned with a plot of land admeasur· ing 2108 square yards in Survey No. 171, Hissa No. 7. at
[1972] 2 S.C.R.
SUPREME COURT REPORTS
892
A
Ghatkopar. Thjs plot belonged to one Jamnadas Chhotalal Dani. On 15-11-1948, Jamnadas executed two leases in favour of one Bhawanji Lakhamsi and Maoiibhai J~habhai, defendants 1 and 2. The subjecrrnatter.of the first lease was two plots, the one · referred ·to above and another in the same area measuring 805 square yards. The subject matter of the second lease was a t4ird plot in ~the same ar.ea.
The leases were for :! period of ten years and in respect f the first plotthe rent payable was Rs. 7'i/- a month. In both the leases there was an option clause which entitled the lessees to surrender th~ leased property by 30-9-1953. The' lessees sur:rendered the two plots, other than the plot with which we are concerned, in pursuance of the option clause, on 15-1-19 51, with the I'~sult that the lease in respect of the first plot continued. Jamna'das died on 14-8-1951, but before his death he had made a gift of the leased property in favour of the three respondentb. The lease in respect' of the p1ot in question here determined by efflux of time on 30-9-1958. But the lessees continued to remain in · possession paying- rent at the rate of Rs. 75/- per month.
On 7·8-1959, the lessors gave notice purporting to terminate the tenancy by the end of September, 1959. They stated in the notice that the lessees had sub-let the premises and that the lessors reQuired the plot for the purpose of putting up constructions on it. Since the lessees did not vacate the premises, !f:he lessors filed ·the suit on 22-10-1959 in the Small Causes ·Court of Bombay.
The lessees contended that they qid not sub-let the premises and that the lessors did not bona-fide require the premises for the purpose of construction. They also contended thaf by the acceptance of rent by the lessors after the termination of the tenancy by emux of time, a fresh 1enancy was creattul, that the original lease was granted for erecting a saw mill-a manufacturing purpos~ and so the lease created by fielding over was, by implication, also for a manufacturing pUfpOSe, and therefore, lessees were entitled to six months' notice expiring with the end of the :Nar of the enancy, and that the tenancy created by holdin over was not validly determined by the one month's notice.
The trial court held that there was no clear evidence of the ub-lettin of the premises, but that the plairrtiffs required the plot bona fide for constructing a new building within the meaning of cla\lse ( i) o.f sub-section ( 1) of Section 13 of the Bombay Rents, Hotel and Lodging }louse ates (Control) Act, 1947, hereinafter :c#Iled the Ac,t. '[be court also held that the tenancy termjnated ;tiY efflux of .!ime, .but .th.at tb..e Jsees continued in pos'iession :by .Vbti)~ ·of the -mm.unity ]rqm .vi.ci<?l) conferred by .the Ac.t and .s.o;·,ey re .no.t )lold.i.n 9vr WiOWl.t~~ ,njei.ng ·or ,s~~?n ~16 - ' - ' - ' . ~ - . -... ; 1 .
B
c
D
E
F
G
H
BHAWANJI V. HIMATlAL (Mathew, J.)
893
A of the Transfer of Property Act, notwithstanding the fact that rent was accepted by the lessors from month to month after 30-9-1958, and that it ~as not necessary to .ive the lessees six months' notice expjrin with the end of the year of -the tenancy, for terminating ihat tenancy. In appeal, the Full Bench of the Small Causes Court confirmed the dec1·ee of the trial court. It was to quash this decree B that the petition under Article 227 was filed before the High Court.
894
[1972] 2 S.C.R.
SUPREME COURT REPORTS
that acceptance by the landlord from the tenant after the contractual tency had expired, of amounts· equivaient to rent, or amounts which were fixed as standard rent, did not amount to acceptan Q.f rent from a lessee within the meaning of section 116 of the Transfr of Property ACit.
. The act _gf holdin_g over after the expiration of the term does not create a tenancy of any kind. If a tenant remains in passes- sion afiter the determination of the lease, the common law rule is that he is a tenant on sufferance. A distinction should be drawn between a tenant continuing ill possession after the determination of the term with the consent of the landlord and a tenant doi:ng so without his consent. The former is a tenant at sufferance in English Law and the latter a tenant holding over or a tenant at will. In view of1 the concluding words of section 116 of the Trans· fer of Property Act, a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession •after the detrmination of the, tenancy will create a new tenancv. What the section contemplates is that on one side there should be an offer of taking a new lease evidenced by the lessee or sub-lessee remaining in possession of the property after his 'term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise. In Kai Khushroo Bezonjee Capadia v. Bai lerbai Hirjibhoy Warden and another(l), the Federal Court had occasion to consider the question of the nature of the tenancy created under section 116 of the Transfer of })roperty 'Act and Mukherjea J. speaking for the majority said, that the tenancy which is created by the "holding over" of a Iesee or under-lessee is a new tenancy in law even though many of the terms of the old lease might be continued in it, by implication; and that to bring a new tenancv into exisence, there must be a bilateral act. It was further held that the assent ot the landlord which is founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancv right asserted by the person who pavs it. Pataniali Sastri J., in his dissenting iudszment, has substantially agreed with the maiority as regards the nature of the tenancy created by section 116 of the Transfer of Property At, and that is evident from th·~ followingobserva~ tions :-
"Turning n.ow to the main point, it win be seen that the s'ec'tion postulates the Jessee remaining in possess1on after the determination of the lease which is conduct indicative, in ordinary circumstances of hi~ desire to continue as a tenant under the lessor and implies a ~acit offer to take a new tenancy from the expiration of the
A
B
c
E
' F
G
H
(1) [1949·50] F.C.R. 262.
BHAWANJI v. HIMATLAL (Mathew, J.)
895·
A old on the same terms so far as they are applicable to the new situation, and when the lessor assents . to the lessee , so continuin.e; in possession, he tacitly accepts the latter's offer and a fresh tenancy results by the implied agree. ment of ifue parties. When, further, the lessee in that situ· ation tenders rent and the lessor accepts it, their con8 duct raises more :radily and clearly the implication of an aeement between 1he parties to create a fresh rtenancy.,
Mere acceptance of amounts equivalent to rent by a landlord from a tenant in posSP..,ssion after a lease had been determined, either by efflux of rtim~~ or by notice to qurt, and who enjoys c statutory _immunity from eviction except on well defined ground~ as in the Act, cannot be re.e;arded as evidence of a new agreement of tenancy. In Ganga Dutt Murarka v. Kartik Chandra. Das, (1 ) this Court observed as follows :-
(t) [1961) 3 S.C.R. 813.
[1972] 2 S.C.R.
89&
SUPREME COUlt T REPO:R TS
A
Court is removed, the right to obtain possession by the lessor under 'the ordinary law springs into action and the exeris of the lessor's right to evict the tenant will- not unless the statute provides otherwise, be conditioned/1
In Davies v. Bristow (I) the Court held that where a tenant of a house to w.hich the Increase of Rent, & c. (War Restrictions) Acts apply, holds ever after tlie expiry of a notice to quit, and pays rent, the landlord js not to be taken by accepting it to assent to a renewal of the tenjlllcy on the o1d tem1s, for he has no choice but to· accept the rent; he could not sue in trespass for mesne profits, for those Acts provide that the tenant, notwithstanding the notice to ...Quit, shaH not be regarded as a trespasser so long as he pays llie rent and perfonns the other conditions of the lease. In Morrison v. Jacobs(2 ), Scott L.J. said:
''The sole question before the court js whether after the expiration of the contractual tenancy 1he mere fact of the landlord receiving rent for the dwelling house from the tenant affords any evidence that the landlord had entered on a new contractual tenancy to take the place of the tenancy which had expired. In my opinion, it does not. The true view is that the landlord takes the rent, knowing that the tenant is granted a statutory tenancy by the Rent Restrictions Acts and that his right to ~ain possession of his dwellin_g house depends entirely on his establishing tha't he brings himself within the conditions laid down by the Acts." In the same case, MacKinnon J. srud:
"At common law, if at the expiration of a tenancy a landlord has acquired a right to claim possession aainst his rtenant and instead of exercising that right he allows him to remain in the house and accepts rent from him as before, the parties by their conduct may, with reason. be held to have entered into a new contract of demise. But the essential factor in those circumstances is that the landlord vo1untarily abstains frcm turning the tenant out. When the tenant remains in poss.esion. not by reason of any such abstention by the ,)andlord, but because the Rent and Mortgage Inte. rest Restrictions Acts deprive the landlord of his former power of eviction, no such inference can properly be drawn.· That is the very obvious and .cogent basis of the decision ]n Davies v. Bristow".
lt was argued on behalf of the apoe11ants, on the basi5 of the {}ecision of this Cou'rt in Manujendra Dutt v. Purendu Prosad Roy
---- -- (1) {1920] 3 K.B. p. 428.
(2) [1945]1 K.B. p. 577.
B
c
D
E
F
G
B
•.
BHAWANJI v. JUMATLAL (Mathew, J.)
897
Learned counsel for the appellants argued that' whenever rent is accepted by a landlord from a tenan~ whose tenancy has been determined, but who continues in possession, a tenancy by holding G over is created. The argument was that the assent of the lesso.r alone and not that of the lessee was material for the purposes of section 116. We are not inclined to accept this contention. We have alre.adv shown that the basis of the section is a bilatera 1 contract betweon the erstwhile landlord and the erstwhile tenant. If the tenant has the statutory right to remain in possession and if he pavs the rent, that will not normally be referable to an' offer H for his continuing in possession which can be convertJa..d into a cotrct by acceptance thereof by the landlord. We do not say {1) (1967] 1 S.C.R.' 475. (2) A.J.R. 1965 S.C. 101.
[1972] 2 S.C.R.
· SUPREME COURT REPORTS
898 '
~
A I I j I ! I i !
1hat the bPeiation of section i 16 js . ·always .· excluded ··whatever .might be · th~ circumstancs under which th tenant pays the rent .and the. landlord acceptS it. . We have earlier reyrred. to the observations of this Coun in· Ganga Dutt Murarka v. Kart1k Chandra Das(1 ) reding some of the circumstances in which a fresh con~ tract of tenancy may be inferred. We have already held .the who!e basis of ·section 116 of the Transfer· of Property Act lS that, tn case of norn:lal tenancy, a landlord is entitled, where he does not accept ~ rep.t a(ter the notic-e to quit, to file a suit in ejectment and obtain a decree for· J}()Sscssion, and so his acceptance of rent is an unequivocal act referable only to his desire to assent to the tenant continuing in possession. That is not so where Rent Act exists; and if the tenanf says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenant's continuin~ in possession, it is for the tenant to estab· lish it. No attempt has been made to establish it in this case and there is no evidence, apart from the acceptance of the rent by thl! landlord, to indicate even remotely that he desired the appellants to continue in possession after he termination of the tenancy. Besides, as we have already indicated. the animus of the tenant in tendering the rent is also material. If he tenders the rent al\ the rent payable under the statutory tenancy, the landlord cannot by accepting it as rent, create a tenancy by holding over. · In such a case the parties would not be id idem and there will be no consensus.· The dec;hion in GanRa Dutt Murarka v. Kflrtik Chandra Das(1 ). which followed the principles laid down by the Federal Court in Kai Khushrllt> Bezonjee Capadia v. Bai Jerbai Hirjibhuy Warden and another(~) is correct and does not · require reconsideration.
B
c
0
E
We. therefore, come to 111e conclusion that there was no hold· in~ over by the appellants and if that be so. the question whether the tcnancv created by holding over was for manufacturing pur· pose and therefore the landlord wns bound to give six months~ notice for the determination of the tenancy by holding over does not arise for consideration.
AppeJJant!i• couel prayed tat othe appellants may be given some trme fr vacatme the premtses. This Court, when passing tbe order on July 31. 1969, on the applition for stay by the appellants had observed :
. "Pcti!ioner undertakes to vacate the premises withIn such time a! may be fb.ed by this Court."
(l) (I 'JISl)•) S.C.R.IItl
(2) {1949--SOl F.C.R. !6~
G
If
BHAWANJI v. HIMATLAL (Mathew;].)
899
.A
We accordingly arant three months' time from today to the appel~ lants to vaat the premises, and they have to comply with the undertakin~ given to this Court and s;eferred to above.
We dismiss the appeal with costs.
B .. , (' h. ,,
Appeal dismined.
1 issue framed by the court
Does a tenant remaining in possession under statutory protection after lease expiry, with the landlord accepting rent, constitute holding over under s. 116 Transfer of Property Act creating a new tena
Colour shows how this judgement treated each authority
Ganga Dutt Murarka v. Kartik Chandra DasFollowed¶54
[1961] 3 S.C.R. 813 · Who else cites this
Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy WardenApplied¶60
[1949-50] F.C.R. 262
Davies v. BristowApplied¶88
[1920] 3 K.B. 428
Morrison v. JacobsApplied¶89
[1945] 1 K.B. 577
Mangilal v. Sugan ChandApplied¶107
A.I.R. 1965 S.C. 101 · Who else cites this
Manujendra Dutt v. Purendu Prosad Roy ChowdhuryDistinguished¶104
[1967] 1 S.C.R. 475 · Who else cites this
1 provisions across 1 enactments
Bhawanji Lakhamsi
Motibhai Jhabhai
Himatlal Jamnadas Dani
C.A. Vaidialingam
K.K. Mathew
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
