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PETITIONER: BHUNESHWAR PRASAD & ANR.

       Vs.

RESPONDENT: UNITED COMMERCIAL BANK & ORS.

DATE OF JUDGMENT:       25/08/2000

BENCH: S.S.M.Quadri, Y.K.Sabharwal

JUDGMENT:

     Y.K.SABHARWAL, J.

     The  appellants and respondents 3 to 7 are owners  and landlords  of  the premises in question.  United  Commercial Bank-respondent  No.1 is the tenant.  Respondent No.2 is  an officer of the bank.

     A  suit seeking a decree of eviction of the bank  from the  premises  was filed by the owners.  It has been,  inter alia,  alleged in the plaint that the bank was inducted as a tenant  in  the  premises for a fixed period of  five  years commencing  from 1st April, 1981 to 31st March, 1986 through a registered deed of lease.  The bank was given an option to get  the  lease  renewed for two terms of  five  years  each provided  it gives notice for renewal of the lease each time one  month  prior to the expiration of the period of  lease. The  bank  exercised  this option one month  prior  to  31st March,  1986  and accordingly the lease was renewed for  the period from 1st April, 1986 to 31st March, 1991 at a monthly rent  of  Rs.  10,876/-.  It seems that before  31st  March, 1991,  the  bank did not exercise option for renewal of  the lease.   The  bank was asked to vacate the premises by  31st May,  1991 under plaintiff’s letter dated 22nd April,  1991. Now, the bank by letter dated 24th April, 1991 requested the plaintiffs  for renewal of lease but the plaintiffs did  not agree  and  requested for vacation of the premises.  It  has also been stated in the plaint that after expiry of lease on 31st  March, 1991, the bank used to deposit the rent in  the account  of  the  plaintiffs in their branch  but  that  was without  their  consent  and mere payment  of  rent  without consent  would  not  create any fresh  tenancy.   Under  the aforesaid  circumstances, the owners sought eviction of  the bank on the sole ground of expiry of the period of the lease under  clause (e) of sub-section (1) of Section 11 of  Bihar Buildings  (Lease, Rent and Eviction) Control Act, 1982 (for short ‘the Act’).

     The  suit  was  resisted  by  the  bank,  inter  alia, pleading  that  the  bank  has been  in  occupation  of  the premises as tenant since 1963 and from time to time the rent has  been  enhanced.   The bank has claimed to be  a  tenant month  to  month.   The  bank   pleaded  that  it  regularly deposited the rent in the account of the plaintiffs and they were  withdrawing  the rent so deposited every  month  after 31st  March,  1991  at  the enhanced rate  of  rent  of  Rs.

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13,595/-  per  month  in place of Rs.  10,876/-.   The  bank pleaded that the amount is being paid as monthly rent as per its letter dated 7th September, 1991 addressed to the owners and  after  discussion,  they  agreed to  receive  the  said enhanced  rent  and are withdrawing the same.  It  has  thus been  claimed that the bank is not tenant for any fixed term period but is a monthly tenant.

     A  decree for eviction on the ground above stated  was passed  by  the  trial court directing the bank  to  deliver vacant  possession  of the premises to the  plaintiffs.   In revision petition, however, judgment and decree of the trial court  has  been  set  aside by the High  Court.   The  said judgment is under challenge in this appeal.

     The  High Court has recorded the finding of fact  that even  after expiry of period of lease, rent of the  premises at the increased rate, as per request of the plaintiffs, was regularly  deposited  by the defendant in their bank in  the accounts  of  the  plaintiffs which have  been  subsequently withdrawn by them.  Admittedly, the rent under the lease for the  period  up  to 31st March, 1991 was Rs.   10,876/-  per month.   The High Court has further held that the plaintiffs asked the bank as per their letter dated 5th September, 1992 to  deposit  the rent of the premises at the increased  rate and  the  bank  deposited rent at the  enhanced  rate  which amount  was  withdrawn by the plaintiffs.  The amount  being deposited by the bank after 31st March, 1991 was at the rate of  Rs.   13,595/- per month.  The High Court has held  that "it  is  admitted position that the plaintiffs accepted  25% increased amount of monthly rent of the premises in question which is evident from Exs.  B-3 and B-4." The question to be considered,  therefore,  is as to the effect of  payment  of enhanced  rent by the bank to the owners.  Does it create or not  a fresh tenancy from month to month within the  meaning of  Section  116 of the Transfer of Property  Act?   Learned counsel  for the appellants contends that mere acceptance of rent  does not create tenancy from month to month because of the protection from eviction available to the bank under the provisions of the Act.

     The  present  is  not  a   case  of  the  payment  and acceptance  of  the rent which was stipulated in  the  lease deed.   It is also not the case where standard rent fixed by any  authority  has  been  paid.    The  increased  rent  as aforestated  was deposited after 31st March, 1991.  The same was  accepted  by  withdrawal of the amount.   In  terms  of letter  dated 5th September, 1992, in fact, the owners asked for  payment  of the rent "hitherto deposited." It has  been established  on the record that the rent demanded, deposited and  withdrawn  was increased rent.  In the light  of  these established  facts, we would examine whether in law  monthly tenancy  as  contemplated by Section 116 of the Transfer  of Property Act, 1882 came into existence or not.

     Mr.   Sanyal, learned senior counsel appearing for the appellants  contends  that  Section 116 of the  Transfer  of Property  Act would not be attracted merely on acceptance of rent.   Reliance is placed upon a decision of Federal  Court in  Kai  Khushroo Bezonjee Capadia v.  Bai Jerbai  Hirjibhoy Warden  & Anr.  [1949 Federal Court Reports 262].  We  agree that  to  bring  a  new tenancy into  existence  within  the meaning  of Section 116, there should be an agreement as the section  contemplates  that on one side, there should be  an offer  of  taking  a  fresh  demise  evidenced  by  lessee’s

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continuing  occupation  of the property after the expiry  of the  lease  and on the other side, there must be a  definite assent   to   this   continuance  of   possession   by   the lessor/landlord  and  that  such an assent of  the  landlord cannot  be  assumed  in  cases of tenancies  to  which  Rent Restriction  Acts  apply  on account of  the  immunity  from eviction  which  a  tenant enjoys even after the  expiry  of lease.   In such cases, the landlord cannot eject him except on  specified grounds mentioned in the Rent Restriction Acts and  thus  the  acceptance of rent by the  landlord  from  a statutory tenant, whose lease has already expired, would not be  taken  as  evidence of new agreement of tenancy  and  it would  not  be  open  to  such a  tenant  to  urge  that  by acceptance  of rent, a fresh tenancy was created.  We do not expect  a lessor not to accept the rent when, in view of the protection  granted  by the Rent Restriction  laws,  without existence  of one or the other ground, he is precluded  from seeking  eviction  of the lessee and in such a  case,  there would  be  no question of creation of tenancy from month  to month.  Under these circumstances, mere acceptance of amount equivalent  to  rent or the standard rent would not  attract Section  116.   Assent  to lessee continuing  in  possession would  be  absent  in  such cases.   However,  an  agreement creating fresh tenancy within the meaning of Section 116 can be  implied from the conduct of the parties.  In Ganga  Dutt Murarka v.  Kartik Chandra Das and Ors.  [(1961) 3 SCR 813], while  affirming  the  dictum laid down in  Khushroo’s  case (supra),  it  was held that apart from an express  contract, conduct  of the parties may undoubtedly justify an inference that  after  determination of the contractual  tenancy,  the landlord  had entered into a fresh contract with the tenant, but  whether  the conduct justifies such an  inference  must always  depend  upon  the facts of each case.   In  Bhawanji Lakhamshi  and  Ors.   v.  Himatlal Jamnadas Dani  and  Ors. [1972  (1)  SCC  388], again the question that came  up  for consideration  was as to whether a fresh tenancy was created or  not  by  acceptance  of rent by  the  lessor  after  the termination  of  the tenancy by efflux of time.  This  Court declined  the prayer to reconsider Ganga Dutt Murarka’s case (supra)  and  held  that  acceptance by  landlord  from  the tenant,  after  the  contractual  tenancy  had  expired,  of amounts  equivalent  to rent or amounts which was  fixed  as standard  rent  did not amount to acceptance of rent from  a lessee  within the meaning of Section 116 of the Transfer of Property  Act.   The present is not a case of acceptance  of amounts equivalent to rent or amounts fixed as standard rent but acceptance of increased rent.  It was also observed that "we  do not say that the operation of Section 116 is  always excluded  whatever  be  the circumstances  under  which  the tenant pays the rent and the landlord accepts it." The whole basis  of Section 116 is that a landlord is entitled to file a suit for ejectment and obtain a decree for possession and, therefore,  his acceptance of rent after expiry of lease  is an  unequivocal act referable to his desire to assent to the tenant  continuing possession.  It would be absent in  cases where  there  are the restrictions as contemplated  by  Rent laws.   In such cases, therefore, it is for the tenant where it  is  said  that the landlord accepted the rent not  as  a statutory  tenant but only as a legal tenant indicating  his assent to tenant’s continuing possession, to establish it.

     In  the present case, the bank from the conduct of the owners has established that the acceptance of increased rent was  in  token  of owners assent to the bank  continuing  in possession after expiry of the lease, thereby creating lease

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from  month  to month within the meaning of Section  116  of Transfer  of Property Act, 1882.  The High Court has rightly reversed the judgment and decree of the trial court.  Before parting  we may make it clear that we are not concerned with the  proceedings for fixation of the rent if pending  before the  appropriate authorities under the Act, as the same  are not  the  subject matter of this appeal and the fixation  of the standard rent and from when it is payable is a matter to be decided by the said authorities in accordance with law.

     For the aforesaid reasons, we dismiss the appeal.  The parties are, however, left to bear their costs.