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PETITIONER: BADRILAL

       Vs.

RESPONDENT: MUNICIPAL CORPORATION OF INDORE

DATE OF JUDGMENT06/12/1972

BENCH: ALAGIRISWAMI, A. BENCH: ALAGIRISWAMI, A. DUA, I.D. VAIDYIALINGAM, C.A.

CITATION:  1973 AIR  508            1973 SCR  (3)  15  1973 SCC  (2) 388  CITATOR INFO :  R          1984 SC 143  (5)

ACT: Madhya  Pradesh  Municipal Corporation Act, s.  80-Terms  of lease accepted by Commissioner-Resolution of Corporation not to grant lease Effect of. Tenant  by  sufferance-It  should be  given  notice.  before eviction.

HEADNOTE: The  appellant was a lessee of a plot of land  belonging  to the  respondent-corporation.   When  the  respondent  issued notice to the appellant directing him to vacate the land  on the date of expiry of the lease, the appellant applied for a grant  to  him of a lease for 99 years or at  least  for  10 years.   The  respondent passed a resolution that  the  land would  be  given to the appellant if  he  deposited  certain amount  as  upset  price and paid a higher  rent,  and  that otherwise possession of the land should be taken back.   The appellant  did pot comply with the terms but made a  counter offer., Having failed in his appeal to the Minister, 7 years after the resolution passed by the respondent, he offered to pay  a  part of the amount fixed by the resolution  and  the balance in instalments.  This was accepted by the  Municipal Commissioner.  The appellant did not pay any amount and  the respondent  filed a suit for eviction.  During the  pendency of  the  suit the appellant offered to pay  the  full  upset price,  the rent that may be found due, as well as costs  of the suit and requested that permanent lease for 99 years may be  granted to him.  He also sent a cheque for part  of  the amount (the rent having been calculated at the old rate) but after  receiving  reminders from the Commissioner  paid  the balance  a  few days later.  The respondent  however  passed another  resolution  refusing  to grant  the  lease  to  the appellant. The trial court and the first appellate court dismissed  the suit  holding that the appellant was a tenant holding  over. The  High  Court in second appeal decreed the  suit  of  the respondent-Corporation. Dismissing the appeal to this Court, HELD:(1) No contract was concluded between the parties as  a

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result of the payments by the appellant. [18 G] The Commissioner cannot enter into a contract by himself and can do so only if it is sanctioned by the Corporation  under s. 80 of the Madhya Pradesh Municipal Corporation Act.   Nor was  it  open to the Commissioner to make any offer  to  the appellant  or  to  accept any offer from  the  appellant  in respect  of the land except with the sanction of  the  muni- cipal  council.   Even  the offer made  by  the  respondent- corporation by its resolution came to an end with the filing of the suit by the ’Corporation and the Corporation,  cannot be  deemed  to have kept it open.  The  appellant’s  offer,’ after  the  suit  was  filed, was a new  offer  and  it  was rejected  by  the  only authority  competent  to  accept  it namely, the Corporation. [18 G-H; 19 D-G] (2)  The deposit of the rent by the appellant and acceptance of  it  by  the Commissioner cannot be deemed  to  make  the appellant a tenant holding over. [20 B] 16 The  payment  was at the old rate by the appellant  and  its acceptance by the Commissioner was not an acceptance of rent as  such and in clear  recognition of the tenancy  right  of the   appellant.   It  cannot  amount  to  the   Corporation consenting to the appellant continuing as a tenant by paying the  old  rates of rent.  There is thus no question  of  the appellant being a tenant holding over.  He had become only a tenant  by  sufferance and hence there was no need  for  any notice before he could be evicted. [2O A-C] Kai Khushroo Bezonjee Capadia v. Bai jerbai Hirjibhey Warden Anr.  [1949-50] F.C.R. 262 at 270 and Bhawanji  Lakhmshi  v. Himatla Jamnadas Dani [1972] 1 S.C.C. 388 followed.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1243  of 1967. Appeal  by special leave from the judgment and decree  dated May  7, 1966 of the Madhya Pradesh High Court, Indore  Bench in Second Appeal No. 475 of 1962. S.   V. Gupte and Rameshwar Nath for the appellant. V.   M.  Tarkunde,  P.  C. Bhartari, J.  B.  Dadacharji  and Ravinder Narain, for the respondent. The Judgment of the Court was delivered by Alagiriswami, J. This is an appeal by special leave  against the  judgment of the High Court of Madhya Pradesh in  Second Appeal No. 475 of 1962 on the files of that Court. The  appellant became a lessee of a plot of  land  measuring 10,375  sq. feet (721 Chasmas) situate at  28,  Parsimohalla Street   No.  5,  Sanyogtaganj,  Indore  belonging  to   the Municipal  Corporation  for a period of 10  years  in  1919. This  lease was renewed  from time to time and the  last  of such  renewals was in the ye 1939 for a period of 10  years. The lease expired on 30th September, 1949.  On 24-5-1949 the respondent, Municipal Corporation of Indore, issued a notice to  the appellant directing him to vacate the land on  30-9- 1949.   Thereupon he applied to the  Municipal  Commissioner either  to  grant him a lease for 99 years and  it  was  not possible  to renew it at least for a period of 10  years.  0 19-12-1949 the Municipal Council passed a resolution to  the following effect: "Opinion  of  the Lease Committee is  accepted.   The  land, situated   in  Parsimohalla,  Sanyogitaganj,  be  given   to applicant  Badrilal  Bholaram  only in case he is  ready  to               deposit  Rs.   ’16,212 of the lease  rent  and               upset price as per Schedule rate in accordance

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             with  letter No. 3239 dated 26-10-49  sent  to               him  by the Municipal  Commissioner               otherwise  the  said land be taken  back  into               possession." 17 On 31-12-1949 the Municipal Commissioner wrote Ex.  P.20  to the appellant informing him that the land would be given  to him  on long lease on condition that he-paid an upset  price of Rs. 16,212 and an annual lease rent at Rs. 9 per  Chasma. He  was  further  informed that if  he  accepted  the  said condition  he should deposit the upset price within 15  days and  submit  an  application giving his  consent,  and  that otherwise  steps would be taken to take back  possession  of the  land.   The appellant wrote (Ex.  P. 1 8  on  9-1-1950) that  the  upset  price and rent claimed  by  the  Municipal Council  was too much and requested that the rent and  upset price  be modified and during the pendency of  his  petition proceedings before the Commissioner be stayed.  He then seem to  have filed a petition for revision before  the  Minister incharge  of municipalities and this was dismissed  on  7-9- 1952.   Almost 4 years later on 14-5-1956 he wrote Ex. D.  2 to  the Commissioner requesting that an amount of  Rs.  8212 may  be accepted and he may be permitted to pay the  balance in  annual instalments of Rs. 1000 each.  On  20-6-1956  the appellant  was  informed by the Commissioner by  letter  Ex. D.3  that he should deposit the sum of Rs. 8212  within  two days  and  thereafter  the  balance  would  be  realised  in instalments.   The appellant not having paid the amount  the Municipal  Commissioner again wrote on 30-7-1956 giving  him two  days time to deposit the amount of Rs. 8212.  On  20-2- 1957 the Commissioner again wrote to the appellant directing him  to  deposit  the whole of Rs. 16,212  within  two  days telling  him  that on his failure to do so  steps  would  be taken for evicting him from the land. The  suit out of which this appeal arises was filed on  16th September, 1957.  The appellant filed his written  statement on  20th  January, 1958 and the issues were framed  on  24th March, 1958.  At this stage the defendant wrote Ex.  D.4  on 17-3-1959 in the following terms : "I  beg to say that it has been approved by you to  give  me the plot of land at H.N. 85 Parsimohalla on permanent  lease of  99 years after having received the upset price from  me. I agree to pay whatever lease rent found due against me upto 31-3-1951  besides reasonable costs of the suit and  I  have deposited today vide cheque number E/2/104221 dated  17-3-59 in the Indore Bank, Sanyogitaganj and I undertake to pay  in cash  any  amount  found  due against  me  at  the  time  of execution of the lease deed." The  Commissioner wrote Ex.  D.5 to the defendant  on  23-4- 1959  asking him to deposit the upset price of Rs.  1.6,212, rent according to the new rates after deducting a sum of Rs. 824-6-0 already paid by the appellant up to 31-3-54, as also the court expenses. 63ISup.C.I./73 18 Along  with  his letter dated 17-3-1959  the  appellant  had apparently sent a cheque for Rs. 16,601.93. The balance  not having  been paid, as demanded in the letter Ex.   D.5,  the Commissioner  wrote  again on 28-5-1959 and sent  a  further reminder  on 19-8-1959 giving the appellant four days’  time for  paying  the ’balance which was actually  paid  only  on 22-9-1959.  The Municipal Council passed a resolution on 31- 5-1960  refusing-to  grant the lease to  the  appellant  and directing the Municipal Commissioner to take back possession of the land.

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Curiously the appellant somehow pleaded that he was a perma- nent  lessee of the land but that claim obviously could  not be  and was not seriously pressed before this Court  by  Mr. Gupte,  learned counsel appearing for him.  The Trial  Court surprisingly  held  that he became a permanent  tenant,  the Trial Court as well as the 1st Appellate Court held that the appellant  was a tenant holding over.  Both of them  decided in favour of the appellant.  The, High Court observes at one place that the appellant’s position after 30-9-1949 was that of  a lessee holding over and not that of a trespasser,  but there  is  no  discussion as to why it  considers  that  the appellant  was a lessee holding over.  We shall later  point out  that  the  appellant cannot be deemed to  be  a  lessee holding  over.  The High Court, also held that there was  no compromise of the suit by any person authorised to do so  on behalf  of the Corporation.  It also held that there was  no acceptance  of rent with the sanction of the Council.  As  a consequence   it   allowed  the  appeal  and   decreed   the plaintiff’s suit. Before this Court Shri Gupte appearing for the appellant did not  contend that there was a compromise of the  suit.   His contention  on the other hand Was that a concluded  contract emerged  when  the appellant paid a sum of  Rs.  5697.93  on 22-9-59  pursuant  to  the letter of  the  Commissioner  and therefore the suit could not continue.  He also argued  that the  appellant  would  be entitled to  the  benefit  of  the provisions  of Section 53A of the Transfer of  the  Property Act,  and that in any case he was a tenant holding over  and would  be entitled to the benefit of provisions  of  Section 106 and 1 1 6 of the Transfer of the Property Act. We  may straight away say that we find ourselves  unable  to agree  with  the  contention  that  there  was  a  concluded contract between the Municipal Council and the appellant  on 22-9-1959.   There  is  no dispute that  in  this  case  the Commissioner cannot enter into a contract by himself and can do so only if it is sanctioned by the Municipal  Corporation under section 80 of the Madhya Pradesh Municipal Corporation Act.  The resolution of the Corporation dated 9-12-1949  was specific that the land would be given to the appellant if he deposited  the upset price and rent in accordance  with  the letter dated 26-10-1949 sent by the Municipal 19 Commissioner to the appellant and otherwise the land  should be  taken  back  into possession.  That  letter  is  not  on record.   Apparently, it was on the same terms as  Ex.P.  20 dated 31-12-1949.  It could not be otherwise.  The appellant did not comply with the terms of that letter.  He went on to make  a  counter offer by Ex.  P. 19  dated  9-1-1950.   He, appealed to the Minister and having failed there, he  waited nearly  7 years after the Corporation s resolution to pay  a part of the amount and pay the balance in instalments.  This was  accepted  by the Municipal Commissioner  on  20-6-1956. But  we must make it clear that the  Municipal  Commissioner had no power in view of the resolution of the Corporation to accept  the  appellant’s  offer.  He was  given  a  specific mandate  and was not authorised to enter  into  negotiations with the appellant regarding the lease.  The amount was  not paid in spite of two further letters and the suit was  filed on 16-9-1957.  The Municipal Commissioner had no power to go on accepting the offers from the appellant more than 15 days after  his letter to him on 31-12-1949; nor could he  accept any  terms other than those mentioned in  the  Corporation’s resolution  either within those 15 days or later.  Even  the offer  made by the Corporation’s resolution came to  an  end with  the  filing  of  the  suit,  which  was  a  clear  and

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unequivocal  revocation of the resolution.   Thereafter  the Corporation  cannot be deemed to keep open its offer of  the year  1949.  Nor was it open to the Commissioner  either  to make any offer to the appellant or to accept any offer  from the  appellant  in  respect  of the  land  except  with  the sanction  of  the Municipal Council.  The  appellants  offer made on 17-3-59, a year and a half after the suit was filed, was  a new offer and it was rejected by the  only  authority competent  to accept it i.e. the Corporation  on  31-5-1960. The  correspondence carried on by the Commissioner with  the appellant was wholly beyond his powers. The offer made by the appellant in 1959 cannot have anything to do with the resolution passed by the Municipal Council in 1949.   The  offer  was  of a different  set  of  terms  and included an offer to pay the costs of the suit and that also had in fact been deposited by the appellant at the  instance of the Commissioner.  That indicates the new situation  that had  come into existence and establishes beyond  doubt  that this was a fresh offer.  We therefore hold that no  contract came into existence between the parties on 22-9-1959. It  was  then urged by Mr. Gupte that the  appellant  having deposited the rent up to 31-3-1954 and the Municipal Commis- sioner having accepted it he should be deemed to be a tenant holding  over.  Leaving aside for the moment the  contention put  forward on behalf of the Corporation that this  payment was  made  behind  its back, it has to  be  noted  that  the payment  was at the rate prevailing before 30-9-1949 and  on that date the 20 Corporation having passed a resolution specifying a new rate rent of Rs. 9 per Chasma the payment at the old rate by  the appellant  and its acceptance by the Municipal  Commissioner was  not  an  acceptance  of  rent  as  such  and  in  clear recognition  of  the  tenancy right of  the  appellant.   It cannot amount to the Corporation consenting to the appellant continuing  as  a tenant by paying the old  rates  of  rent. There  is thus no question of the appellant being  a  tenant holding  over.  But a person who was lawfully in  occupation does  not become a trespasser, even if he does not become  a tenant  holding  over but is a tenant  by  sufferance.   The position  at  law  was explained in  Kai  Khushroo  Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden & Anr.(1) as  follows : "On  the  determination of a lease , it is the duty  of  the lessee  to deliver up possession of the demised premises  to the  lessor.   If  the  lessee or  a  sub-lessee  under  him continues in possession even after the determination of  the lease,  the landlord undoubtedly has the right to eject  him forthwith;  but if he does not, and there is neither  assent nor dissent on his part to the continuance of occupation  of such  person, the latter becomes in the language of  English law  a tenant on sufferance who has no lawful title  to  the land but holds it merely through the laches of the landlord. If  now  the  landlord  accepts rent  from  such  person  or otherwise  expresses  assent  to  the  continuance  of   his possession,  a  new  tenancy  comes  into  existence  as  is contemplated by S. 116, Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month  in               accordance  with the provisions of S.  116  of               the Act." At page 272 it was pointed out :’ "It can scarcely be disputed that the assent of the landlord which is founded on acceptance of rent must be acceptance of rent  as such and in clear recognition of the tenancy  right

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asserted  by the person who pays it." The same position  was explained in a recent decision of this Court to which one of               us was a party in Bhanwnji Lakhamshi v. Himat-               lal  Jamnadas  Dani(2).  At page  391  it  was               observed : "The  act of holding over after the expiration of  the  term does not create a tenancy of any kind.  If a tenant  remains in  possession  after 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  in possession after the determination (1)[1949-50] F.C.R. 262 at 270.     (2) [1972] 1 S.C.C. 389.               21 of  the term with the consent of the landlord and  a  tenant doing  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 of the concluding  words of  Section  116 of the Transfer 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  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  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  other- wise.   In  Kai  Khushroo Bezonjee  Capadia  v.  Bai  Jerbai irjibhoy Warden and Another, the Federal Court had  occasion to  consider  the  question of the  nature  of  the  tenancy created under section  116 of the Transfer of  Property  Act               and   Mukherjea,   J.,   speaking   for    the               majority  said  that  the  tenancy  which   is               created  by the "holding over" of a lessee  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 tenancy  into  existence,               there must be a bilateral act.  It was further               held that the assent of the landlord which  is               founded   on  acceptance  of  rent   must   be               acceptance  of  rent  as  such  and  in  clear               recognition  of the tenancy right asserted  by               the person who pays it." The  appellant being merely a tenant by sufferance there  is no need for any notice before he could be evicted.  Thus the judgment of the High Court is correct, in so far as it  held the appellant was liable to be evicted. The  appeal  is  dismissed with  costs.   The  petition  for reception of additional evidence is also dismissed. V.P.S.                                                Appeal dismissed. 22