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CASE NO.: Appeal (civil) 1906  of  1998

PETITIONER: SAMIR MUKHERJEE

       Vs.

RESPONDENT: DAVINDER K. BAJAJ & ORS.

DATE OF JUDGMENT:       18/04/2001

BENCH: Syed Shah Mohammed Quadri & S.N. Phukan

JUDGMENT:

PHUKAN, J. L...I...T.......T.......T.......T.......T.......T.......T..J

   In  this  appeal  by  special leave  the  appellant  has impugned  the  judgment of the Division Bench of Delhi  High Court  passed  in R.F.A.  No.325 of 1997 by which  the  High Court  upheld the judgment of the Additional District Judge, Delhi.

   The  respondents  filed  a  suit  for  eviction  of  the appellant  from  the  suit  land and also  for  recovery  of arrears  of  rent and damages/mesne profits.   According  to respondents   the  appellant  was  a  monthly  tenant   and, therefore,  15  days  notice terminating  the  tenancy,  as required  under Section 106 of Transfer of Property Act (for short  the  Act)  was  issued, receipt of  which  was  not disputed.   The  tenancy was created by an  oral  agreement. The  appellant  admitted  the tenancy but pleaded  that  the intention  of the parties at the time of its creation was to grant  tenancy permanently because the lease was granted  in favour  of the appellant for manufacturing purpose and since the  inception of the tenancy, the appellant was carrying on business  of  manufacturing transmission towers and  railway electrification  fittings.   On these facts it  was  pleaded that  the  lease would be deemed to be from year to year  as per the provisions of Section 106 of the Act and, therefore, notice  to  quit  ought  to have been  given  for  6  months expiring  on  last date of the year of the tenancy.   Before the Trial Court an application under Order XII Rule 6 C.P.C. was filed which was allowed, as according to the Trial Court in  the  written statement there was clear admission by  the appellant.

   Before  this  court, learned counsel for the  appellant, Mr.   Jaideep  Gupta referring to the provisions of  Section 106  of  the Act has contended that since the lease was  for manufacturing purpose, the legal presumption as envisaged in Section  106 of the Act would apply and, therefore, it was a case  of a tenancy from year to year terminable by 6 months notice  and not by 15 days notice.  The learned counsel has further contended that though under Section 107 of the Act a

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lease  from  year to year can be made only by  a  registered deed,  this  section nowhere controls the  presumption  laid down  in  Section 106 of the Act and as such the  notice  to quit  in  the  present appeal is bad in law.  In  reply  the learned  senior counsel for the respondents, Mr.  Verma  has submitted that in view of the law laid down by this court in Ram  Kumar  Das versus Jagdish Chandra Deo, Dhabal  Dev  and Anr.   [AIR  1952 SC 23 = 1952 (3) SCR 269] and  Shri  Janki Devi  Bhagat  Trust, Agra versus Ram Swarup Jain  (Dead)  By Lrs.   [1995  (5)  SCC 314], the contention of  the  learned counsel for the appellant is liable to be rejected.

   To  appreciate the respective contentions that have been put  forward  by  the  learned counsel for  the  parties  we extract  below  Sections  106  and 107 of  the  Act:   106. Duration of certain leases in absence of written contract or local  usage  In the absence of a contract or local law  or usage  to  the contrary, a lease of immovable  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 months notice expiring with  the end  of  a  year of the tenancy;  and a lease  of  immovable 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 expiring with the end of a month of the tenancy.

   Every  notice  under  this section must  be  in  writing signed  by or on behalf of the person giving it, and  either be  sent by post to the party who is intended to be bound by it  or be tendered or delivered personally to such party, or to  one  of his family or servants at his residence,  or  if such  tender  or  delivery is not practicable affixed  to  a conspicuous part of the property.

   107.   Lease  how made  A lease of  immovable  property from  year  to year, or for any term exceeding one year,  or reserving  a  yearly rent, can be made only by a  registered instrument.

   All  other  leases  of immovable property  may  be  made either  by  a  registered instrument or  by  oral  agreement accompanied by delivery of possession.

   Where  a  lease  of  immovable property  is  made  by  a registered  instrument, such instrument or, where there  are more  instruments  than one, each such instrument  shall  be executed by both the lessor and the lessee;

   Provided  that  the State Government may, from  time  to time,  by notification in the Official-Gazette, direct  that leases of immovable property, other than leases from year to year,  or  for  any term exceeding one year or  reserving  a yearly  rent,  or any class of such leases, may be  made  by unregistered  instrument  or  by   oral  agreement   without delivery of possession.

   Section  106 lays down a rule of construction, which  is@@     IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII to  apply when the parties have not specifically agreed upon@@ II as  to  whether the lease is yearly or monthly.  On a  plain reading  of  this section it is clear that  legislature  has classified  leases  in  two categories  according  to  their

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purposes and this section would be attracted to construe the duration  of  a valid lease in the absence of a contract  or local  law or usage to the contrary.  Where the parties by a contract  have  indicated  the  duration of  a  lease,  this section  would  not  apply.  What this section  does  is  to prescribe  the duration of the period of different kinds  of leases  by  legal  fiction    leases  for  agricultural  or manufacturing purposes shall be deemed to be lease from year to  year  and  all other leases shall be deemed to  be  from month   to  month.   Existence  of  a  valid  lease   is   a pre-requisite to invoke the rule of construction embodied in Section 106 of Transfer of Property Act.

   Section  107 prescribes the procedure for execution of a lease  between  the parties.  Under the first  paragraph  of this section a lease of immovable property from year to year or  for any term exceeding one year or reserving yearly rent can  be  made  only by registered instrument  and  remaining classes  of leases are governed by the second paragraph that is to say all other leases of immovable property can be made either  by  registered  instrument  or  by  oral   agreement accompanied by delivery of possession.

   In  the case in hand we are concerned with an oral lease which  is  hit by the first paragraph of Section 107 of  the Transfer of Property Act.  Under Section 107 parties have an option  to  enter  into a lease in respect of  an  immovable property  either for a term less than a year or from year to year,  for any term exceeding one year or reserving a yearly rent.   If they decide upon having a lease in respect of any immovable  property  from  year  to year  or  for  any  term exceeding  one year, or reserving yearly rent, such a  lease has  to be only by a registered instrument.  In absence of a registered  instrument  no valid lease from year to year  or for a term exceeding one year or reserving a yearly rent can be  created.   If the lease is not a valid lease within  the meaning  of  the  opening words of Section 106 the  rule  of construction  embodied therein would not be attracted.   The above  is the legal position on a harmonious reading of both the sections.

   In  Ram Kumar Das (supra), Section 106 was considered by a  bench of four judges of this court.  This court held that this section 106 lays down the rule of construction which is to  be  applied when there is no period agreed upon  between the  parties and in such cases duration has to be determined by the reference to the object for purpose for which tenancy is  created.   It  was also held that rule  of  construction embodied  in this section applies not only to express leases of  uncertain  duration  but also to leases implied  by  law which may be inferred from possession and acceptance of rent and other circumstances.  It was further held that it is not disputed  that a contract to the contrary as contemplated by Section  106 of the Transfer of Property Act need not be  an express  contract;   it  may be implied,  but  it  certainly should  be a valid contract.  On the facts of that case, the court held that the difficulty in applying this rule to the present  case arises from the fact that tenancy from year to year  or  reserving  an  yearly rent can  be  made  only  by registered  instrument  as lays down in Section 107  of  the Transfer of Property Act.

    (emphasis supplied)

   In  a recent decision of this court in Janki Devi Bhagat

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Trust,  Agra (supra) this court held that under Section  107 of  the  Transfer  of  Property Act  a  lease  of  immovable property  from year to year or for a term exceeding one year can  be made only by registered instrument and any lease  of this kind would be void unless it is so created.

   In  the  present case though the appellant  has  claimed that  it  was a lease for manufacturing purpose,  admittedly there  was no registered written lease.  Therefore, rule  of construction  as  envisaged  in  Section 106  would  not  be applicable  as  the statutory requirement of Section 107  of the  Act has not been satisfied.  The plea of the  appellant that  15 days notice terminating the present tendency is bad in law would not be sustainable.

        The  learned  counsel for the  appellant  has  very@@          IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII placed before us various decisions of different High Courts. We  find  fairly that two different views are  projected  in@@           IIIIII these  decisions.   One view is that fiction in Section  106 was not intended to override Section 107.

   In  Krishna Das versus Bidhan Chandra (AIR 1959 Calcutta 181)  and  Balwant  Singh versus L.  Murari  Lal  (AIR  1965 Allahabad  187) the courts have taken the view that  Section 106  was  not  intended  to be controlled  by  Section  107. Similar  view has been expressed by the High Courts of Assam and  Nagaland.  The contrary view has been expressed by  the Calcutta  High  Court in Sati Prasanna Mukherjee versus  Md. Fazel  (AIR  1952 Calcutta 320) and Allahabad High Court  in Kishan  Lal versus Lal Ram Chander (AIR 1952 Allahabad 634). It  is not necessary to refer to all the decisions of  other High Courts.

   On  perusal  of  these decisions we find the  view  that@@     IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII fiction  in Section 106 was not intended to be controlled by@@ IIIIIII Section  107 was due to misunderstanding of the decision  of this  court  in  Ram Kumar Das (supra) as  we  have  already indicated  that in Ram Kumar Das (supra), this court did not apply  rule  of construction of Section 106 as there was  no registered  instrument.   The High Courts taking  that  view have not laid down the law correctly.

   In  Jagat Taran Beery versus Sardar Sant Singh (AIR 1980 Delhi 7), Delhi High Court considered the views expressed by different High Courts and correctly took the view that there is  no conflict between Sections 106 and 107 of the Act  and for  application  of Section 106 a valid year to year  lease shall  be  deemed  to  exist only when it is  created  by  a registered   instrument;   non-existence  of  a   registered instrument  to  create such a lease will by  itself  exclude Section 106.

   For  the  reasons stated above, we find no merit in  the present  appeal  and accordingly it is dismissed.  Costs  on the parties.