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PETITIONER: SUDHIR KUMAR & ORS.

       Vs.

RESPONDENT: BALDEV KRISHNA THAPAR & ORS.

DATE OF JUDGMENT: 28/10/1969

BENCH:

ACT: Landlord and Tenant--Option of renewal in lease deed subject to lessor’s consent-When lessor could withhold consent. Suit  for ejectment--Compromised-Lessee allowed to  continue in possession till a particular date on terms and conditions of  original lease Whether fresh lease or mere extension  of time  for delivery of possession    Whether  renewal  clause operative.

HEADNOTE: One of the terms of the lease relating to a cinema house was that  after the expiry of the lease, the lessee  shall  have the  option  to  renew the; lease with the  consent  of  the lessor At the end of the lease period, the lessor brought  a suit  for  ejectment,  but died  during  its  pendency.   On December  23,  1958, the suit was  compromised  between  the legal representatives of the lessor and the lessees.  By the compromise; the tenancy was continued till December 31, 1962 on  the terms and conditions of the original lease, and  the lessees were to vacate the premises on January 1, 1963.  One of  the, legal representatives sold his share in the  cinema house   to  the  appellant  who  sought  execution  of   the compromise,  decree  on January 4,  1963.   The  respondents (lessees)  contended  that the compromise  created  a  fresh lease,  that the decree was only a declaratory one and  that they were entitled to an extension of the lease on the basis of the renewal clause incorporated into the fresh lease. HELD  :  (1)  The  question whether under  the  terms  of  a compromise  the parties entered into a fresh lease  or  were only   granted  an  extension  of  time  for  de-livery   of possession   depends  upon  the  intention  of  parties   as expressed in the, compromise and the decree based on it.  On the terms of the compromise in the present case, the lessors had  granted  a fresh lease and the lessees were  given  the option to renew the lease, which was one of the terms of the original  lease, at the end of the term fixed, that is  31st December  1962.   Hence,  the direction  in  the  compromise decree to vacate at the end of the term would be ineffective and would not amount to an ejectment decree.  It is at  best a  declaration  of  the right of the lessors  to  eject  the lessees  at the end of the lease period if the lessees  fail to get a renewal. [118 B-C, G-H; 119 A-B] (2)  Merely  because  the compromise had  fixed  the  period during  which the respondents continued as lessess,  it  did not mean, that the renewal clause in the original lease  had not become one of the terms of the agreement. [119 D-E] (3)  Nor  was the renewal clause meaningless on  the  ground the  lessees were entitled to a renewal only if the  lessors consented.  The right of the lessors to give consent must be

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read  in the context of the lessees’ entitlement to get  the renewal.  So read, the lessors could withhold their  consent either  because  of the lessees’ failure to observe  one  or other  of the material terms of the lease or on  some  other reasonable  ground.   The  lessor  could  not   unreasonably withhold  consent  when the lessee exercised the  option  of renewal. [119 E-G; 120 A-B]                             115

JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos. 2557  and 2558 of 1966. Appeals  from the judgment and order dated July 23, 1965  of the Jammu & Kashmir High Court in Civil First Misc.  Appeals Nos. 20 and 30 of 1964. V.   M.  Tarkunde, P. C. Bhartari, J. B. Dadachanji,  O.  C. Mathur    -and Ravinder Narain, for the appellants. A.   K.  Sen,  Inder  Das Grover and J.  P.   Aggarwal,  for respondent No. 1. The Judgment of the Court was delivered by Hegde,  J  These connected appeals arise from  an  execution proceeding.  The question for determination in these appeals is,  whether the decree under execution is executable ?  The learned  single judge of the High Court of Jammu  &  Kashmir before whom the execution was levied came to the  conclusion that the decree is executable but the execution petitioners, who are entitled to a fraction of the interest in the.  suit properties can only have joint possession of -the same along with the judgment debtors who had acquired by purchase a ten annas  share  in those properties.  Both the  appellants  as well  as respondents 1 and 2 appealed against the  order  of the learned single judge.  The appellate bench of that  High Court  reversed the decree of the learned single judge.   It came to the conclusion that the decree is not executable and that it is merely declaratory in character.  It  accordingly dismissed  the execution petition.  Hence these  appeals  by certificate. The facts giving rise to the controversy are as follows: One  Sardar Uttam Singh Khorana leased in favour of the  1st respondent and the father of the second respondent the Uttam Talkies in Jammu including a cinema machinery and  furniture for a term of three years on a monthly rental of Rs.  3,000. One of the terms of the said lease was that after expiry  of the  lease,  the tenant shall have the option to  renew  the lease  with the consent of the landlord.  At the end of  the lease period Sardar Uttam Singh brought a suit for ejectment against  the lessees but he died during the pendency of  the suit  leaving  behind him a will by which his  son  Joginder Singh  got  six  annas share in the Uttam  Talkies  and  his another son Devinder Singh got ’a four annas share  therein. The remaining six annas share was bequeathed to a trust.  On December 23, 1958, a compromise was entered into between the legal  representatives  of the original  plaintiff  and  the defendants by which the tenancy was continued till  December 31,  1962.   We  shall  refer to  the  other  terms  of  the compromise  at  the  appropriate  stage.   Before  the  term stipulated in the compromise came to an end, Joginder  Singh sold his six annas share in the Uttam Talkies. 116 to  the  appellants  in this appeal.  The  other  ten  annas shares  were conveyed to the lessees by the owners of  those shares.  Before conveying their shares, on October 14, 1961, Devinder  Singh  and the trustees of the trust  executed  in

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favour of the lessees an agreement to renew the lease for  a period of three years from 1-1-1963 more or less on the same conditions on which it was enjoyed by -them previously.   On January  3,  1963 Devinder Singh on his own  behalf  and  on behalf  of  the  trust  filed  an  application  before   the executing court praying that satisfaction of the decree  may be   ;entered   into.   Accordingly   the   court   recorded satisfaction  of the decree by its order of the  same  date. Thereupon the appellants moved the Court for delivering khas possession  of the Uttam Talkies.  Yet  another  application was  filed by them on January 5, 1963, requesting the  court to  review  its order entering satisfaction of  the  decree. That  application was accepted by the court and  on  January 17, 1963, the learned single judge recorded satisfaction  of the decree only to the extent of the share purchased by  the lessees.  Thereafter the appellants pressed their  execution petition.   The lessees objected to the same.  As  mentioned earlier their objection was overruled by the learned  single judge  who  directed  delivery of the  joint  possession  in favour  of  the appellant as well as the lessees.   As  seen earlier that decision was overruled by the division bench. The  contention  on  behalf of the  appellant  is  that  the compromise  decree  referred  to earlier  is  an  executable decree whereas the lessees take the stand that it is  merely a  declaratory  decree.  According to them,  the  compromise entered into between the parties amounts to a creation of  a new lease and the decree superimposed on it merely  endorses the agreement entered into between the parties. The  material  portion  of the compromise  decree  reads  as follows :               "1. The defendants shall remain as lessees  of               Uttam  Talkies Residency Road, Jammu with  the               machinery   furniture  fitting  etc.  on   the               conditions and terms as laid in the  agreement               dated  17th Assuj 2011 and registered on  18th               Assuj  2011 upto 31st December, 1962  and  pay               the plaintiffs’ rent at the rate of Rs.  3,000               per  month  from  1st  January  1959  in   the               following proportion;               (a)   S. Devinder Singh-Four annas in a rupee.               (b)   S. Joginder Singh-Six annas in a rupee.               (c)   M/s.   Devinder  Singh  Gopal  Dass  and                     Manohar  Lal-Trustees six annas in a rupee.                                    117               2.    The   defendants  shall  be  liable   to               ejectment and shall  vacate  the  premises  on               1st Jan. 1963 on the terms     and  conditions               as stated above.               3.    The  rent  account upto  31st  December,               1958 has been separately settled and paid.               4.    The defendants shall have right to  quit               the  leased premises at any time  before  31st               December  1962 provided they give  two  months               previous  notice  to  the  plaintiff  in  this               behalf.  In such contingency rent due upto the               date  of handing over the possession shall  be               recoverable.               5. The parties shall bear their own costs."               The  relevant terms of the compromise  are  as               follows               "That   the  parties  have   compromised   the               abovenamed  case  and  have  agreed  that  the               defendants  shall  remain as  lessees  of  the               Uttam Talkies, Residency Road, Jammu on  terms               and  conditions on which they previously  held

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             the said premises machinery furniture fittings               etc.  upto 31st December, 1962 and pay to  the               plaintiffs  rent at Rs. 3,000 per  month  from               1st  January 1959 in the following  proportion               :-               S.    Devinder Singh-Four annas in the rupee.               S.    Joginder Singh-Six annas in the rupee.               M/s.   Devinder Singh, Gopal Dass Manohar  Lal               Trustees-six annas in the rupee.               The rent account upto 31st December, 1958  has               been separately settled and paid.               The  rest of the terms and conditions will  be               as  contained  in the agreement a  deed  dated               17th Assuj 2011 registered on 18th Assuj 2011.               The defendants shall have right to vacate  the               premises  even before 31st December,  1962  if               they  so  desire and give  2  months  previous               notice.   In  such contingency rent  upto  the               date  of handing over of possession  shall  be               recoverable.               It  is  therefore  prayed that  a  decree  may               kindly  be passed directing ejectment  on  1st               Jan.  1963 on terms and  conditions  contained               herein.               The parties will bear their own costs."               Paragraph  30 of the lease executed  by  Uttam               Singh   in   favour  of  the   lessees               which incorporates the renewal clause reads as               follows               118               "That  at the time of expiry of the period  of               three years the promisors with the consent and               consultation of promisee shall be entitled  to               take  the cinema on contract for  further  two               years  on the above conditions  provided  that               there has been no breach of any condition laid               down in the agreement." The  question whether under the terms of the compromise  the parties  entered  into a fresh lease or the  decree  holders merely  granted  an  extension  of  time  for  delivery   of possession  of the premises demised essentially  depends  on the intention of the parties who entered into the compromise as could be gathered from the compromise petition as well as the compromise decree.  It is necessary to note that in  the compromise  petition,  it is specifically  stated  that  the parties  had  agreed  "that the defendans  shall  remain  as lessees of Uttam Talkies Residency Road, Jammu on terms  and conditions  on which they previously held the said  premises machinery furniture fittings etc. upto 31-12-1962 and pay to the  plaintiff rent at Rs. 3,000 per month from 1st  January 1959 in the following proportion...... It is further  stated therein  that "the rest of the terms and conditions will  be as  contained in the agreement a deed dated 17th Assuj  2011 registered on 18th Assuj 2011".  But the last clause in  the compromise  petition reads : "it is therefore prayed that  a decree  may  kindly  be passed directing  ejectment  on  1st January 1963 on terms and conditions contained herein."  The compromise decree refers to the defendants as "lessees"  and the  compensation  payable by them as ’rent’.  At  the  same time cl. (2) of the decree says that the defendants shall be liable  to  ejectment and shall vacate the premises  on  1st January  1963 on the terms and conditions as  stated  above. The  compromise and the compromise decree speak, so to  say, in two voices.  If we had been merely left with the specific terms  incorporated  in  the  compromise  petition  and  the

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compromise decree without bringing in by reference the terms of the original lease as to matters not specifically covered in the compromise petition and the compromise decree,  there would  have  been some difficulty in spelling out  the  real intention of the parties.  But by incorporating the terms of the  old lease, to the extent not covered by the new  terms, the parties had agreed to incorporate into the new agreement the  term relating to renewal found in the  original  lease. On  an analysis of the terms of the compromise, it  is  seen that  the  lessors had granted a fresh lease of  the  cinema talkies  demised; a monthly rental was fixed in  respect  of the  same and the lessees were given an option to renew  the lease  at  the end of the term fixed though  that  right  is subject  to certain conditions.  Under these  circumstances, the  direction in the decree to vacate the suit premises  at the  end of the term fixed in the compromise  in  accordance with                             119 the  terms of the compromise would amount to an  ineffective direction.   Such  a direction cannot be  considered  as  an ejectment decree.  It is at best a declaration of the  right of the lessors to eject the lessees at the end of the  lease period if the lessees fail to get a renewal. Mr.  Tarkunde, learned Counsel for the  appellant  contended that on a proper construction of the compromise petition and the  compromise  decree, it would be seen that  the  renewal clause  was  not incorporated into  the  compromise  decree. According to him the period during which the defendants  are permitted  to  be in possession of the"  suit,  premises  is subject to no alteration under any circumstance.  Subject to that  condition  and  other  conditions  mentioned  in   the compromise  petition  the terms of the original  lease  were incorporated into the compromise petition.  We see no  basis for this contention.  A term in a lease relating to  renewal is independent of the duration of the lease fixed under  the lease  deed.   The renewal obtained by the exercise  of  the option given under the lease is an extension obtained by the exercise  of  an independent power.  Therefore there  is  no force  in  the contention that because  the  compromise  had fixed the period during which the defendants could  continue as  lessees, the renewal clause in the original  lease  deed did  not become one of. the terms of the agreement.  We  are unable to consider the clause in the compromise referring to the original lease as a barren clause or that it is not wide enough to reach the renewal clause. Mr. Tarkunde next contended that the renewal clause referred to earlier is a meaningless term as the lessees are entitled to  a renewal only if the lessors consented.  He urged  that there  can  be a renewal only if both the  lessors  and  the lessees agreed, but in that event there is no need to have a term  providing  for  renewal.  We are unable  to  read  the renewal clause as Mr. Tarkunde wants us to do.  No term in a contract  should be considered as superfluous if it  can  be given  some  reasonable  meaning.  The  clause  in  question definitely  says  that lessees are entitled for  a  renewal. The right of the lessors to give consent must be read in the context of the lessees’ entitlement to get a renewal of  the lease.   If  so  read,  it is clear  that  the  lessors  can withhold  their  consent  either  because  of  the  lessees’ failure to observe one or other of the material terms of the lease  or  on  some other reasonable  ground.   The  lessors cannot withhold their consent capriciously or  unreasonably. A  covenant  against  assigning  and  letting,  charging  or parting with possession of the demised property or any  part thereof without licence or consent of the landlord is deemed

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to  be subject to a proviso to the effect that such  licence or consent is not to be unreasonably withheld.  That is  the position  both  under the English law as well as  under  the Indian  law.   About that there is no dispute.   If  in  the matter of introducing a stranger to the 120 demised  property, the law insists that the  lessors  should not  unreasonably  withhold  his consent, it  follows  as  a matter   of  reason  and  logic  that  the   lessor   cannot unreasonably withhold his consent, when the lessee exercises his option to renew the lease on the strength of one of  the terms in the lease deed. On a consideration of all the terms in the compromise  peti- tion, we are satisfied that the parties intended to create a fresh lease and not that the lessees were only permitted  to be in possession of the leasehold for the prescribed  period as licensees. For the reasons mentioned above, these appeals fail and  are dismissed with costs.  One set. V.P.S.                                       Appeals dismissed. 121