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CASE NO.: Appeal (civil)  2380 of 2001

PETITIONER: PABITRA KUMAR ROY & ANR.                                     

RESPONDENT: ALITA D’ SOUZA                                              

DATE OF JUDGMENT: 27/09/2006

BENCH: A.K. Mathur & Altamas Kabir

JUDGMENT: J U D G M E N T

ALTAMAS KABIR, J.,

       The appeal raises an interesting question of law relating  to the interpretation of Sub-section (2) of Section 3 of the West  Bengal Premises Tenancy Act, 1956 (hereinafter referred to as  ’the 1956 Act’) which does not appear to have been considered  earlier for its full scope and effect.  The question relates to the  applicability of Sub-section (2) of Section 3 of the 1956 Act to  leases which were executed for periods of over twenty years   but containing a clause allowing prior determination at the  instance of either the lessor or the lessee.  Prior to 1965, the  said Section was comprised  only of  one Section which is now  numbered  as Sub-section (1).  Sub-section (2)  was added by  Amending Act XXIX of 1965.  Since we shall be considering  the provisions of Section 3 in this appeal, at some length, the  same as it stands, after amendment, is reproduced  hereinbelow for  reference:-

"3. Certain provisions of the Act not to  apply to certain leases.\027(1)  The  provisions relating  to rent and the  provisions of sections 31 and 36 shall  apply to any premises held under a lease   for residential purpose of the lessee  himself and registered under the Indian  Registration Act, 1908, where--    

(a)     such lease has been entered into  on or after the 1st December  1948, and  

(b)     such lease is for a period  not  more than  20 years,  and save  as aforesaid nothing in this Act  shall apply to any premises held  under a lease for a  period of not  less than 15 years.

(2)     Notwithstanding anything  to  the contrary in sub-section (1) but  subject to sub-section (3) of section 1,  this Act shall apply to all premises held  under a lease which has been entered  into after the commencement of the West  Bengal Premises Tenancy (Amendment)  Ordinance, 1965:

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Provided that if any such lease is for  a period of not less than 20 years and the  period limited by such lease is not  expressed to be terminable before   its  expiration at the option either of the  landlord or of the tenant, nothing in this  Act, other than the provisions relating to  rent and the provisions of sections 31  and 36, shall apply  to any premises held  under such lease."

As will  appear from the facts involved  in this appeal, by  a registered deed of lease dated 13th January, 1969, the  predecessor-in-interest of the appellants let out the ground  floor flat with one garage, measuring 1200 sq.ft., in premises  No.29/1, Bondel Road, Calcutta \026700019, to the respondent   on a rental of Rs.450/-per month.   The lease commenced   with effect from  1st January, 1969, and was for a period of 21  years. The lease deed contained a clause which permitted  the  parties to terminate the lease prior to its expiry with notice  from either  side. On 29th September, 1972, when the lease was subsisting,  the lessor served a notice determining the lease under Section  111 (g) of the Transfer of Property Act, 1882.  The lessee was  asked to quit and vacate and deliver possession to the lessor  on the expiry of the notice period.  Inasmuch as, the lessee did  not  vacate the premises, the lessor filed a suit, being Title Suit  No.3/1973, for eviction of the lessee from the suit premises  and for recovery of  arrear  rents and damages.  The said suit  was decreed by the 2nd  Subordinate  Judge at Alipore under  Section 111 of the Transfer of Property Act, 1882, on the  ground of default.  However the lessee made an application for  protection under Section 114 of the Transfer of Property Act,  1882,  and on payment of the arrear  rents, he was entitled to  retain his possession of the suit premises. Subsequently, on completion of the period of 21 years  reserved in the lease deed, in 1990, the lessor, who is  represented by the appellants herein, called  upon the lessee  (the respondent  herein) to hand  over peaceful and vacant  possession of the suit premises.  On the failure of the  respondent to do so, the lessor filed  another suit, being Title  Suit No.71/1990,  in the court of the Second Munsif, Alipore,  for ejectment.  In his written statement the respondent took a   stand that the  suit was not maintainable  since the  respondent was a tenant protected under the provisions of  the  1956 Act.  The Trial Court by its judgment and decree dated  29th June, 1996, negated the defence taken by the respondent  herein that she had been inducted as a monthly tenant and  decreed the suit upon holding that the respondent had failed  to establish her claim  of monthly tenancy. Apart from the above, the trial court also took note of the  fact that the earlier suit  had been filed under the provisions of  the Transfer of Property Act, 1882, and  at no point of time  had the respondent  taken the plea that her tenancy was  governed by the provisions of  the 1956 Act.  The trial court  took note of the fact that, on the other hand, the respondent  had herself obtained relief against eviction under Section 114  of the Transfer of Property Act, 1882.   On the said two grounds, the trial court decreed the suit  for eviction against the respondent herein. The respondent preferred an appeal against the said  judgment  and decree of the trial court, being   Title Appeal No.  246/1996.   The first appellate court also rejected the  

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respondent’s claim of having been inducted  as  a  monthly   tenant and  affirmed the judgment of the trial court by holding  that the decision in Title Suit No.3/1973  attracted the  provisions of Section 11 of the Civil Procedure Code, 1908,  relating to the applicability of the Transfer of Property Act to  the leasehold premises and held further that  the said  question could not be reopened.  It was also held by the 1st  appellate court that the tenancy created by the  deed of  lease   dated 13th January, 1969 would not be governed by the 1956  Act in view of the provisions of Section 3 (2) thereof.   In  arriving at such conclusion, the 1st appellate court referred to  and relied upon the decision of this Court in Savita Dey vs.   Nageswar Majumdar and Anr., reported in AIR 1996 SC 272. Aggrieved by the said order, the respondent preferred a  second appeal before the Calcutta High Court which was  numbered as  Second Appeal No. 595/1997.  By  judgment  and order  dated 10th September, 1999, the High  Court  allowed the second appeal upon reversing the finding of the  courts below  regarding the applicability  of the 1956 Act to  the deed of lease executed by the lessor on 13th January,  1969.  The High Court also disagreed with the finding  that the  decision  in the earlier suit (T.S. No.3/1973) operated as  res  judicata as far as  the plea  of  protection under the 1956 Act  is concerned. This appeal has been preferred against the said judgment   of reversal of the Calcutta High Court.  Appearing in support of the appeal, Mr. P.S. Mishra,  Senior Advocate, reiterated the stand of the appellant before  the courts below and submitted that the defendant-respondent  was precluded by the principle of res judicata from contending  that her tenancy was protected under the provisions of the  1956 Act.  He urged that since the respondent had obtained  the benefit of Section 114 of the Transfer of Property Act in the  earlier suit, she was estopped from raising a defence in the  later suit that her tenancy was protected under the proviso  to  Sub-section (2) of Section 3 of the  1956 Act.   It was also contended that apart from the question of res  judicata, the High Court had erroneously reversed the findings  of the  courts below regarding the applicability of the 1956 Act  to the tenancy created by the lessee having regard to the  clause which entitled both the lessor and the lessee to  terminate the lease during its  subsistence.  It was submitted  that since the lease was for a fixed period of twenty one years  and was allowed to run for the full length of its term and the  respondent remained in possession of the demised premises  throughout the period of lease, the High Court had erred in  holding that such clause brought the lease within the  protection of the 1956 Act. Mr. Mishra submitted that the decision of this Court in  Savita Dey vs. Nageswar Majumdar and Anr.(supra),  fully  supported the case of the appellant and the High Court had  erroneously reversed  the judgments  of the courts below. The application of the principles of res judicata and  estoppel was denied by Mr. Rana Mukherjee, learned advocate,  appearing for the respondent. According to him, the  respondent was not precluded from claiming that the lease  granted in her favour was protected under Section 3 (2) of the  1956 Act, merely because the provisions of Section 114 of the  Transfer of Property Act had been invoked in the earlier suit.    It was contended that the object of Section 114 of the Transfer  of Property Act, 1882, was similar to the object of Section 17  (4) of the 1956 Act and it was immaterial which of the two  provisions was invoked in a given case and, in any event, the   question was a pure question of law to which  the rule of res  judicata  would not apply  as was held by this Court in

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Mathura Prasad Bajoo Jaiswal and Ors. vs. Dossibai N.B.  Jeejeebhoy, (1970) 1 SCC 613.   Mr. Mukherjee submitted that the language of Section  3(2) of the 1956 Act made it clear that on account of the prior  determination clause the lessee enjoyed the protection of the  1956 Act. It was urged that the lease had, in fact, been  determined during its subsistence by a notice issued by the   appellants on 29th September, 1972,  followed by  a suit for  eviction on the basis thereof.  The exercise of the option of  prior determination brought the lease  within the ambit  and  protection of the 1956 Act.  It was not, therefore, a case of  uninterrupted continuance of the lease for a fixed period of 21  years on account of the break that had been effected by the  determination of the  lease within three years from the date of  its execution. There was, therefore, no error in the High  Court’s finding that on account of the clause relating to prior  determination, the lease would be governed by the provisions  of the 1956 Act notwithstanding the fact that the earlier suit  had been filed and conducted under the provisions of the  Transfer of Property Act.   On a construction of the provisions of Sub-section (2) of  Section 3 of the 1956 Act, we are unable to subscribe to the  view expressed by the High Court.  The intention of the  Legislature in amending Section 3 appears to have been to  prevent landlords from using long term leases as a camouflage  for excluding them from the protection of the 1956 Act and yet  retaining the right of prior determination. Sub-section (2)  appears to have been enacted to prevent such abuse,  inasmuch as, once the lease was determined before the fixed  period, it attracted the proviso thereof. This aspect of the matter was noticed by a Division  Bench of the Calcutta High Court in Mahindra & Mahindra  Ltd. vs. Kohinoor Debi, 93 C.W.N. Page 773, while considering  the applicability of Sub-section (2) of Section 3 of the 1956 Act  to a lease governed by Sub-section (1) thereof and it was  observed therein as follows :-

"A lease for, say, 21 years would not cease to  be, but would remain, such a lease in the eye  of law even if the lessee has been given an  option to terminate it earlier.  If a lease for a  fixed term with the right or option for removal  in favour of the lessee remains a lease for that  fixed term only, until the option is exercised, a  lease for a fixed term with the right or option  in favour of the lessee of earlier termination  should also remain a lease for a period fixed,  as the option in each case creates, enlarges,  limits or extinguishes no right, title or interest,  until exercised."  

Although, ultimately the matter was decided on other  considerations, the aforesaid exposition appears to us to be a  correct appreciation of the law.  A somewhat similar question came up for consideration  before this Court in Savita Dey vs. Nageswar Majumdar and  Anr. (supra) which had been cited before the High Court.   While considering the said decision the High Court merely  observed that in the said case what had been decided was that  the lease for a fixed period of twenty one years was not  governed by Section 3(2) of the 1956 Act having been entered  into prior to the enforcement of the amendment made to the  provision.   The High Court did not take into consideration the  decision relating to the precariousness of a tenure which was

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terminable prior to its full duration and the observation that  such suggested precariousness of the tenure did not arise in  the facts of the case because the lessee/tenant had fully  enjoyed the period of lease of twenty years, which is also the  case in the instant appeal.   Although, in the instant case, the  tenancy was terminated by notice during the fixed period of  lease, the lessee continued to occupy the demised premises  without interruption for the full period of twenty one years. The decision in Savita Dey’s case makes the position  clear that the mere inclusion of a clause for prior  determination of a lease, which is otherwise for a fixed period  of more than twenty years, will not ipso facto bring it within  the exception contemplated in the proviso to Sub-section (2) of  Section 3 of the 1956 Act.   The inclusion of such a clause may  be taken by the tenant as a defence in the event the option  under the said clause is exercised. Such a defence was not set  up by the lessee in the earlier suit when it was available to her  and the same is not available to her after the lapse of the fixed  period of the lease. As was indicated by the Calcutta High Court in the  Mahindra and Mahindra case (supra) a lease for a fixed period  does not cease to be so by the inclusion of a clause entitling   either the lessor or the lessee to determine the lease prior to  its expiry, unless  such option is actually exercised. In the impugned judgment under appeal, the High Court  went wrong in holding that it had been found that the lease in  question was governed by Section 3(2) of the 1956 Act.  To the  contrary, both the trial Court and the 1st Appellate Court held  that the deed of lease was not governed by the provisions of  the 1956 Act under Section 3(2) and such finding was reversed  by the High Court on a misapplication of the decision in Savita  Dey’s case.   The law is clear that lease deeds for periods of twenty  years or more would stand excluded from the operation of the  1956 Act except in matters relating to Sections 31 and 36  thereof, unless the same were terminable before their   expiration at the option either of the landlord or of the tenant.   In other words, if such a lease is terminated before its fixed  period expired, the proviso to Section 3(2) would be attracted  as a defence against eviction. If, however, the lease was  allowed to run its full course, both the lease and the  conditions contained therein would come to an end and would  cease to be operative and the clause for prior determination  would no longer be available as a defence against eviction.   The appeal must also be allowed on the question of  estoppel.  Having submitted to the jurisdiction of the Court  under the Transfer of Property Act and having obtained relief  thereunder, the respondent cannot in the present suit claim  protection under the provisions of the West Bengal Premises  Tenancy Act, 1956 to which she is not, in any event, entitled,   in terms of the lease deed dated 13th January, 1969. The appeal is accordingly allowed. The judgment and  decree of the High Court is set aside and that of the trial Court  is restored. The respondent is granted time till 31st December,  2006, to vacate the premises and make over peaceful  possession thereof to the appellants subject to filing of the  usual   affidavit  within fifteen days.