Partly allowed

The A.P. State Cooperative bank Limited, v. P.N. Vijayalakshmi Devi

Telangana HC26 Apr 2010CCCA/112/2006

Case brief

AI extract

What is this about?

In a civil appeal against a decree for ejectment and mesne profits, the court upheld the tenant's eviction upholding the validity of the quit notice under Section 106 of the Transfer of Property Act, but set aside the fixed mesne profits for lack of evidence and directed a fresh inquiry.

What did the court decide?

Ejection confirmed; time granted to vacate; mesne profits fixed at Rs. 20/sq.ft/month set aside with liberty to file separate inquiry.

The A.P. State Cooperative bank Limited, Vs P.N… — Landlord and Tenant | Telangana HC (2010)

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THE HON’BLE SRI JUSTICE K.C.BHANU C.C.C.A. No. 112 OF 2006

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JUDGMENT:

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1. This appeal is preferred against the judgment and decree dated 31.03.2006 in O.S. No.361 of 2005 on the file of the III Senior Civil Judge, City Civil Court, Secunderabad, whereunder and whereby the suit filed for ejectment of the defendant and mesne profits, was decreed with costs directing the defendant to vacate the plaint schedule premises and deliver vacant possession of the same to the plaintiff within a period of two months from the date of judgment and further directing the defendant to pay to the plaintiff mesne profits @ Rs.20/per square feet per month for the carpet area of 1,692 square feet from 01.10.2003 till the date of filing of the suit and subsequently also at the same rate from the date of filing of the suit till the date of delivery of vacant and peaceful possession of the schedule premises to the plaintiff.

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2. The appellant herein is the defendant and the respondent herein is the plaintiff, in the suit. For better appreciation of facts, the parties are hereinafter referred to, as they are arrayed in the suit.

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3. The brief facts that are necessary for disposal of the present appeal may be stated are as follows. The plaintiff filed the suit stating that she leased out

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the schedule premises to the defendant for the purpose of running banking business on a monthly rent of Rs.6/- per square feet. The tenancy was month to month commencing from 1^st of every month till the end of the month as per the English calendar month. Originally, the lease was entered with M/s. Bhanu Enteprises and this was a partnership concern and subsequently due to the demise of the husband of the plaintiff, P.Seshu Babu, who was one of the partners in the above Enterprises, the plaintiff became the proprietor for the said concern. The plaintiff issued a letter to the defendant stating that as the said M/s. Bhanu Enterprises has been closed and the transactions shall be made with the plaintiff and to transfer all the accounts into the personal account of the plaintiff. As per the said lease between the parties, the lease was only for a period of six years commencing from 1.2.1997 with a provision to enhance the rent after 3 years and subsequently it was enhanced to Rs.6.90 per square feet per month and the same was being deposited into the personal account of the plaintiff. The period of lease came to an end on 1.2.2003 and there was no renewal of tenancy as such the tenancy is month to month. The plaintiff got issued a legal notice to the defendant stating that the said premises was required by them for their own business, and as such the tenancy was terminated and further requested to vacate and hand over the possession by 30.09.2003, and the said notice was received by the defendant. Managing Director of the defendant bank assured that they would vacate the premises within 3

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months, and that the defendant addressed letter dated 12.2.2004 stating that the Bank was in search of suitable premises on war footing basis and assured to vacate the premises soon. The schedule premises is located on main road of Tarnaka and the prevailing rent in the vicinity is more and it would fetch rent of Rs.20/- per square feet per month. Therefore, the plaintiff is entitled for damages and mesne profits @ Rs.20/- per square feet per moth from 1.10.2003 till the date of delivery of possession.

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4. The defendant filed written statement admitting the lease deed and the rent agreed and also the enhancement at the end of 3^rd year. The defendant also admitted issuance of notice dated 5.9.2003 by the plaintiff requesting the defendant to vacate the premises by 30.9.2003. It is stated that on 12.2.2004, the defendant addressed letter to plaintiff stating that after getting an alternative accommodation, it would vacate the premises. The defendant gave paper publications in daily news papers for a suitable accommodation. As the son of the plaintiff warned the Branch Manager of the defendant bank, if the premises was not vacated on or before 3.1.2005, the bank was constrained to file a suit against the plaintiff and her sons. The notice dated 5.9.2003 got issued by the plaintiff cannot be termed as notice of termination of lease, as it does not satisfy the requirements enshrined under Section 106 of the Transfer of Property Act, 1882. The claim of rent at Rs.20/- per square feet per month is on far higher side, as the

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premises is an old premises, and hence, the plaintiff is not entitled for any mesne profits.

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5. Basing on the above pleadings, the trial Court framed the following issues.

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1) Whether the plaintiff is competent to file the suit ?

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2) Whether the plaintiff is entitled for ejectment and mesne profits of the suit schedule property ?

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3) to what relief ?

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6. During trial, P.W.1 was examined and Exs.A1 to A15 were marked, on behalf of the plaintiff. D.W.1 was examined and Exs.B1 and B2 were marked, on behalf of the defendant.

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7. Accepting the evidence adduced on behalf of the plaintiff, the trial Court decreed the suit as above. Challenging the same, the present appeal is preferred by the appellant/defendant.

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8. Now, the points for determination are, (i) whether the plaintiff is entitled for ejectment of the defendant from the suit schedule property ? (ii) whether mesne profits of the suit schedule property can be awarded ? (iii) whether the judgment of the trial Court is correct, legal and proper ? (iv) to what relief ?

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9. The learned counsel for the appellant contended that a specific plea has been taken in the written statement with regard to defective notice issued allegedly under Section 106 of the Transfer of Property Act, 1882, but the same has not been answered by the trial Court;

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that, Ex.A14-notice does not satisfy the requirements under Section 106 of the T.P. Act and therefore it cannot be treated as notice of termination of tenancy; that, without giving an opportunity of hearing to the defendant, the judgment was pronounced; that the trial Court is very haste and therefore, he prays to remand the matter to the trial Court to consider the issue whether the quit notice under Section 106 of the T.P. Act is valid or not. He further contended that, there is no evidence or basis for fixing the mesne profits at Rs.20/- per square feet per month and the same should have to be determined by a separate enquiry.

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10. On the other hand, the learned counsel for the respondent contended that, except saying that the quit notice under Ex. A14 does not satisfy the requirements under Section 106 of the T.P. Act, the defendant has not specifically stated how it is defective or invalid under law; that, it is clear that after expiry of the term of lease of six years, the defendant was asked, by issuing the registered notice, to vacate the premises by the end of September, 2003; that thereafter the defendant had been stating to the plaintiff that the bank was in search of securing a suitable accommodation. He further contended that unless it is specifically pleaded as to how and in what manner the notice issued under Section 106 of the T.P. Act is invalid or insufficient, the question of giving any finding thereon does not arise; that the trial Court, after an elaborate consideration of the evidence on record, rightly

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decreed the suit and there are no grounds to interfere with the same.

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11. POINT No.1: Whether the plaintiff is entitled for ejectment of the defendant from the suit schedule property ?

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It is not in dispute that the plaintiff is the owner of the suit schedule premises. It is also not in dispute that the defendant and the plaintiff entered into a lease deed in respect of the suit schedule property for a period of six years commencing from 1.2.1997 on a monthly rent of Rs.10,152/- i.e. @ Rs.6/- per square feet, with a condition to enhance the rent by 15% at the end of the 3^rd year and with an option to renew the lease on mutually agreeable terms. Admittedly, six years’ term has been completed by 1.2.2003. On 5.9.2003, the plaintiff got issued a legal notice to the defendant bank terminating the tenancy and to vacate the premises by 30.09.2003.

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12. Section 106 (1) of the T.P. Act reads thus:

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“Duration of certain leases in absence of written contract or local usage : (1) In the absence of a contract or local law or usage to the contrary, a lease of immoveable 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 month’s notice; and a lease of immoveable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice.”

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Section 106 of the T.P. Act inter alia provides that a lease of the immovable property for any other purpose (other than agricultural or manufacturing purpose) shall be deemed to be a lease from month to month which may be terminated either by the lessor or lessee by fifteen days notice expiring by the end of the month of the tenancy. Sub-sections (2) and (3) are incorporated in Section 106 by the Transfer of Property (Amendment) Act, 2002 (Act 3 of 2003), which came into force from 31.12.2002. Sub-section (2) reads, ‘notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice’. Sub-section (3) reads, ‘A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section.’.

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Clause (a) of the transitory provides that the amended provisions of Section 106 shall apply to ‘all notices in pursuance of which any suit or proceeding is pending at the commencement of this Act’. Sub-section (3) validates those notices where the periods mentioned above fall short, provided the suit or proceeding is filed after expiry of the periods specified in sub-section (1).

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13. It is admitted by D.W.1 that plaintiff got issued a legal notice dated 05.09.2003 to the defendant bank to vacate the premises by 30.09.2003 and the said notice

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was responded by notice dated 19.09.2003. It is not the case of the defendant bank either in pleadings or in evidence that there was no clear 15 days time from the date of receipt of notice till the date of termination of the tenancy. The defendant received the notice on 19.09.2003, still, by virtue of sub-section (3) of Section 106, the notice under Ex.A14 is legally valid as the suit is filed long after expiry of the period of 15 days i.e. on 25.04.2005.

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14. Admittedly, the tenancy between the plaintiff and the defendant expires by efflux of time and so the question of giving statutory notice does not arise. But, in this case, the lessee was allowed to continue in possession for a period exceeding one year in view of the correspondence, and the lessee must be treated as tenant holding over month to month.

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15. There cannot be any dispute that, unless it is shown that Ex.A14, which is quit notice got issued under Section 106 of the T.P. Act, is incorrect or invalid, the question of eviction of the defendant does not arise. For that, there must be specific plea and evidence. Mere vague, bald or omnibus allegation that the requirements under Section 106 of the T.P. Act are not complied with, cannot be accepted.

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16. It is not in dispute that tenancy in this case is month to month. In such a case, for termination of tenancy 15 days prior notice is enough. The quit notice is dated 5.9.2003 whereunder the defendant bank was requested

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to vacate the premises by 30.09.2003. It is not in dispute that Ex.A14-notice has been received by the defendant bank. Therefore, it is for the defendant bank to state specifically as to how and in what manner the quit notice dated 5.9.2003 is not in accordance with law or defective or invalid. Except taking a bald plea that the requirements under Section 106 of the T.P. Act have not been complied with, there is no specific denial as to how Ex.A14-notice is invalid one. Similarly, there is no evidence to show that Ex.A14-notice is invalid or insufficient, except D.W.1 testifying that it cannot be termed as notice of termination of lease and that the notice does not satisfy the requirements enshrined under Section 106 of the T.P. Act. Therefore, practically, there is no pleading and evidence with regard to the validity or otherwise of the quit notice under Section 106 of the T.P. Act. As a matter of fact, no issue has been framed with regard to that aspect. Similarly, no reply was given by the defendant for the quit notice stating that it was defective.

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17. Further more, after receipt of Ex.A14-notice, it is clear that the defendant bank addressed letters Exs.A2, A3, A5 to A7, requesting the plaintiff to extend time for vacating the premises on the ground that the bank was trying to secure an alternative premises and after an alternative premises is found, the Bank would be shifted on war footing. Therefore, the question of recording a finding with regard to validity of the quit notice does not arise in view of the fact that there is no specific plea as to

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how the quit notice in invalid. Once a quit notice is stated to be in accordance with the provisions of the T.P. Act, the defendant bank is bound to vacate the premises. As seen from Section 106 of the T.P. Act, it is a valid one in view of the fact that 15 days’ time has been given for the defendant bank for vacating the premises in question, for which a reply was given by the Bank stating that it would vacate the premises as and when suitable accommodation is found to the bank. Therefore, the finding of the trial Court on this aspect cannot be said to be perverse or contrary to law.

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18. The contention of the learned counsel for the appellant that the defendant was not given an opportunity to argue the matter, cannot be accepted in view of the fact that in the judgment, it is clear that after hearing both sides, the judgment was pronounced. Even otherwise, when the quit notice is not shown to be invalid under law, the defendant is bound to vacate the premises. As seen from the quit notice, it is clear that it is in accordance with the provisions of Section 106 of the T.P. Act. Therefore, the finding of the trial Court with regard to evicting the defendant bank need not be interfered with. Accordingly, this point is answered against the appellant.

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19. POINT No.2: Whether mesne profits of the suit schedule property can be awarded ?

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As regards mesne profits, the trial Court determined the mesne profits. Admittedly, when earlier suit was

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decreed ex parte, it was clearly observed that mesne profits enquiry should be determined in the separate application. When admitted evidence is available, such an enquiry need not be conducted separately, and it is appropriate to determine mesne profits enquiry in the judgment itself. But, before determining the rent payable, there must be admitted evidence with regard to payment of rent. As per the lease deed, the payment of rent is at Rs.6/- per square feet per month and the same has to be enhanced by 15% after 3 years. Therefore, there is no admitted evidence available on record with regard to payment of rent at Rs.20/- per square feet per month. In such an event, the trial Court ought to have resolved this issue by a separate application after taking evidence, and ought to have determined the rent basing on the available evidence on record. Therefore, the judgment and decree in so far as ascertaining the mesne profits is without any basis, as it has to be decided in a separate enquiry.

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20. POINT No.3: Whether the judgment of the trial Court is correct, legal and proper ?

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The finding of trial Court in ordering eviction of the appellant/ defendant from the petition schedule property is correct as the quit notice got issued by the respondent/plaintiff was not shown to be invalid. But, the trial Court is not correct in quantifying the mesne profits in the absence of evidence. Mesne profits have to be determined basing on the pleading and evidence. For that purpose, separate enquiry has to be conducted.

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Accordingly, the point is answered.

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21. POINT No.4: To what relief ?

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In the result, the impugned judgment and decree of the trial court in so far as the evicting the appellant bank from the schedule premises, is confirmed. However, the appellant is granted time of four months from the date of receipt of a copy of this judgment, to vacate the schedule premises. The judgment and decree of the trial Court in so far as the ascertaining mesne profits at Rs.20/- per square feet per month is set aside, giving liberty to the plaintiff to file a separate application in the trial Court for ascertaining mesne profits.

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22. The C.C.C.A. is, accordingly, partly allowed. No costs.

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26.04.2010

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DRK

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THE HON’BLE SRI JUSTICE K.C.BHANU C.C.C.A. No. 112 OF 2006

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Date: 26.04.2010

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Between:

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A.P. State Co-operative Bank Limited, Troop Bazar, Hyderabad, rep. by its Deputy General Manager

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…appellant

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P.N.Vijayalakshmi Devi

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And

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…Respondent

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THE HON’BLE SRI JUSTICE K.C.BHANU

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C.C.C.A. No. 112 OF 2006

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26.04.2010

The A.P. State Cooperative bank Limited, v. P.N. Vijayalakshmi Devi

Case brief

What is this about?

What did the court decide?

The A.P. State Cooperative bank Limited, v. P.N. Vijayalakshmi Devi

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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