Siri Chand (Deceased) Thr. Lrs. vs Surinder Singh

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2617 OF 2020 (arising out of SLP (C) No. 9866 of 2019)

SIRI CHAND (DECEASED) THR. LRS. ...APPELLANT(S)

VERSUS

SURINDER SINGH ...RESPONDENT(S)

J U D G M E N T

ASHOK BHUSHAN, J.

Leave granted.

2. This appeal has been filed questioning the

judgment of Punjab and Haryana High Court dated

05.09.2018 dismissing the revision filed by the

landlord-appellant.

3. Brief facts giving rise to the appeal are: -

Signature Not Verified Digitally signed by

3.1 The appellant is a landlord of a shop MEENAKSHI KOHLI Date: 2020.06.17 15:56:28 IST Reason: measuring 14 sq. yds. Respondent took the

shop on rent @Rs.2,000/- per month for 2

running a hair cutting and dressing work.

The respondent-tenant on 27.07.1993 executed

an agreement/rent deed undertaking to pay a

sum of Rs.2,000/- each month. The rent deed

was to be applicable w.e.f. 28.07.1993. The

house tax and electricity bills were

undertaken to be paid by the tenant. Rent

was to be paid up to 5th day in each month to

the owner. In event, the tenant failed to

make the payment of rent up to the prescribed

date in advance, the owner shall have right

to get the shop vacated. The shop owner, if

is in need of the shop, can serve notice of

one month and get the shop vacated from the

tenant. The tenant also undertook to make

the payment of rent money by increasing 10

per cent each year.

3.2 An application under Section 13 of East

Punjab Urban Rent Restriction Act, 1949 was

filed by the appellant-landlord dated

18.03.2006 praying for eviction of the tenant

along with arrears of rent and house tax and 3

interest on the arrears of rent. The

appellant’s case was that rent is not paid

from 28.01.2004 to 28.07.2004 and from

29.07.2004 to 28.02.2005. House tax since

1999 to 2005 amounting to Rs.22,302/- was not

paid.

3.3 The tenant filed objection to the application

and contended that rate of rent is Rs.1,000/-

per month. It was further pleaded that at

the time of taking shop in question, no other

condition was agreed or settled. However,

the signatures were obtained on some blank

paper as security by the landlord, which

appears to have been fabricated as alleged

rent note. The tenant claimed to have paying

the rent @Rs.1,000/- per month till February,

2006, after which landlord refused to accept

the rent.

3.4 The copy of the rent note dated 27.07.1993

was brought on the record as Exh. A-1. The 4

Rent Controller held Exh.A-1- rent deed as

proved. The Rent Controller held that rent

note – Exh.A-1 is not signed by both the

parties. The Rent Controller further held

that although time is not specified, but it

is not a lease deed, so not compulsorily

registrable. The Rent Controller also held

that tenant was liable to pay the house tax.

The respondent tendered rent @ Rs.2,000/-

w.e.f. 28.01.2004, which was accepted under

protest. The Rent Controller held that tenant

was in arrears of rent and house tax so the

respondent-tenant is liable to eviction from

the premises in dispute. The Rent Controller

held that there exist relationship of

landlord and tenant between the parties. The

Rent Controller allowed the application of

the appellant and directed eviction of the

respondent from the premises in question.

3.5 An appeal was filed by the tenant against the

order of the Rent Controller. The Appellate 5

Court did not agree with the findings of the

Rent Controller that document Exh. A-1 was

not compulsorily registrable. Appellate

Court observed that perusal of the document

Exh.A-1 reveals that there would be increase

in the rent to the tune of 10% every year,

hence the document was not executed for a

period of less than a year rather the

intention of the parties is clear that it was

executed for more than one year, hence the

document was required to be registered under

Section 17(1)(d) of the Registration Act,

1908. However, the Appellate Court rejected

the claim of the tenant that rate of rent was

Rs.1,000/- only. The Appellate Court after

holding that document was compulsorily

registrable took the view that the clause

regarding 10% yearly increase cannot be

relied and judgment of Rent Controller was

accordingly set aside and the appeal was

allowed.

6

3.6 The appellant aggrieved by the order of the

Appellate Court filed a revision before the

High Court. The High Court dismissed the

revision referring to the finding of the

Appellate Court that rent note – Exh.A-1 was

compulsorily registrable. The case of the

landlord to enforce condition in lease deed

regarding increase of the rent was not

relied. Aggrieved by the said judgment, this

appeal has been filed.

4. We have heard learned counsel appearing for the

appellant. No one appeared for the respondent,

though served.

5. Learned counsel for the appellant in support of

the appeal contends that rent note dated 27.07.1993,

which was signed by the tenant was valid Rent note

and was covered within the definition of lease as

given in the Registration Act, 1908. The document

was not registrable under Section 17(1)(d). It is

further contended that the Appellate Court has

without recording the finding that there was no 7

default on the part of tenant in payment of rent and

house tax has set aside the order of the Rent

Controller.

6. We have considered the submissions of the learned

counsel for the appellant and has perused the

records.

7. First issue, which has arisen for consideration

in this appeal is as to whether the rent note dated

27.07.1993, which is brought on record as Annexure P-

3 to the appeal was a document, which required

compulsory registration under Section 17(1)(d) of the

Registration Act, 1908. The second issue to be

considered is as to whether the Appellate Court could

have set aside the decree of eviction without

recording finding that there was no default on the

part of the tenant in payment of rent and house tax

etc. and the amount deposited by the tenant was

sufficient to save him from eviction. 8

8. The Registration Act, 1908 contains the

definition of a “lease” under Section 2(7), which is

to the following effect: -

“(7) “lease” includes a counterpart, kabuliyat, an undertaking to cultivate or occupy, and an agreement to lease;”

9. We may notice that in the present case, the rent

note is not claimed to be signed by the landlord-

appellant rather it is signed only by the respondent-

tenant. The trial court after considering materials

on record has returned the findings that appellant

has proved the rent note. The case of the respondent

that appellant has got his signatures on a blank

paper has not been accepted. RW1- Surinder Singh,

respondent in his cross-examination has admitted his

signatures on the rent note. The trial court also

held that by virtue of clause (9) of the rent note,

the respondent is liable to pay increased rate @10%

every year and further he was liable to pay house

tax. Landlord having paid the house tax, he was

entitled to recover the house tax from the

respondent.

9

10. Section 17(1)(d) of the Registration Act deals

with documents of which registration is compulsory.

Section 17(1)(d), which is relevant for the present

case and has been relied by the Appellate Court is as

follows: -

“17. Documents of which registration is compulsory.—(l) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:—

XXXXXXXXXXXXXX

(d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;”

11. As per Section 17(1)(d), leases of immovable

property from year to year, or for any term exceeding

one year, or reserving a yearly rent requires

compulsory registration. Whether the rent deed can

be treated to be a lease of immovable property – (i) 10

from year to year, (ii) for any term exceeding one

year, (iii) or reserving a yearly rent?

12. We need to notice the relevant clauses of the

rent deed to find out as to whether Section 17(1)(d)

was applicable in the facts of the present case

making Exh.A-1 compulsorily registrable. The

agreement/rent deed, which is written and signed by

the respondent alone contains 16 clauses, which were

promises made by the respondent written in the rent

deed. Clause 1 to 3, 9, 10, 14, 15 and 16, which are

relevant, are as follows: -

“1) I will make the payment of the sum of Rupees 2,000/- (Two Thousand only) each month in advance in cash currency up to date 5 (Five) to the owner of the shop, Sri Chand.

2) The rent deed will be applicable from 28.07.1993

3) The amount of the house tax and the electricity bills regarding the abovesaid shop will be paid by me.

XXXXXXXXXXXXXXXX

9) I will be bound for making the payment of the rent money by

increasing 10% (ten percent) each year.

11 10) If I may not make the payment of the rent up to the prescribed date in advance and then there will be right to the shop owner that he can get the shop vacated.

XXXXXXXXXXXXXXX

14) I have paid the amount of Rupees 3600/- (Three Thousand Six Hundred only) to the shop owner as a security, vacating the shop, handing over the possession to the shop owner, I will be entitled for the refunding of this security amount.

15) If the shop owner is in need of this shop and then serving the notice of one-month period, he can get the shop vacated from me, there will be no objection to me in this regard.

16) If in any situation, I may not comply with this agreement/rent deed and then there will be right to the shop owner that vacating the shop forcible, he can take over the possession from me and may dispossess me, there will be no objection and claim of mine or any of my legal heir.”

13. Clause (1) of the rent deed specifically makes it

clear that monthly tenancy was created on payment of

rent of Rs.2,000/- per month. The payment was to be

made before 5th of each month to the owner. The rent 12

deed does not provide for any specific period for

which the rent deed was executed. When a rent

deed/lease deed does not provide for a period and

when it provides for payment of rent monthly, whether

tenancy can be treated from year to year or for any

term exceeding one year or reserving a yearly rent?

The rent deed does not reserve yearly rent, hence the

third condition as noted above is not applicable.

The rent deed is not also a lease of immovable

property from year to year. There is no mention in

the rent deed that it is a lease from year to year,

hence the said condition is also not applicable.

14. Only clause which need to be, thus, considered is

as to whether the rent deed was “for any term

exceeding one year”. The present is a case where

rent deed does not prescribe any period for which it

is executed. When the lease deed does not mention

the period of tenancy, other conditions of the

lease/rent deed and intention of the parties has to

be gathered to find out the true nature of the lease

deed/rent deed. The two conditions written in the 13

rent note are also relevant to notice. First, if

payment of rent in any month is not made up to 5th of

month, owner shall have right to get the shop evicted

and second if the owner is in need of shop, he by

serving notice of one month can get the shop vacated.

This Court had occasion to consider the provision of

Section 106 of the Transfer of Property Act, 1882 and

noted the rule of construction, which is to be

applied when there is no period agreed upon between

the parties in a lease deed. In Ram Kumar Das Vs.

Jagdish Chandra Deo, Dhabal Deb and Another, AIR 1952

SC 23 after quoting Section 106 of the Transfer of

Property Act, 1882, this Court held that when there

is no period agreed upon between the parties,

duration has to be determined by referring to the

purpose and object with which the tenancy is created.

Following observations were made: -

“13. The section lays down a rule of construction which is to be applied when there is no period agreed upon between the parties. In such cases the duration has to be determined by reference to the object or purpose for which the tenancy is created. The 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 14

inferred from possession and acceptance of rent and other circumstances. It is conceded that in the case before us the tenancy was not for manufacturing or agricultural purposes. The object was to enable the lessee to build structures upon the land. In these circumstances, it could be regarded as a tenancy from month to month, unless there was a contract to the contrary……………………………………”

15. This Court further held that “it has no doubt

been recognised in several cases that the mode in

which a rent is expressed to be payable affords a

presumption that the tenancy is of a character

corresponding thereto. Consequently, when the rent

reserved is an annual rent, the presumption would

arise that the tenancy was an annual tenancy unless

there is something to rebut the presumption.”

16. Clauses of the rent note makes it clear that

there was a categorical promise that tenancy is a

monthly tenancy and rent is paid every month by 5 th of

every month. It is true that although in clause (9),

it was mentioned that the tenant will be bound for

making the rent money by increasing 10% each year,

that was promise by the tenant to increase the rent 15

by 10% each year for the period of tenancy, though

the period of tenancy was unspecified. Clause (9)

may or may not operate in view of specific clauses

reserving right of landlord to evict the tenant on

committing default of non-payment of rent by 5th of

every month or when landlord requires shop by giving

one month’s notice. Clause (9) was a contingent

clause which binds the tenant to increase the rent by

10% each year, which was contingent on tenancy to

continue for more than a year, but that clause cannot

be read to mean that the tenancy was for a period of

more than one year. We may notice a judgment of

Allahabad High Court in Kashi Nath and Ors. Vs. Abdur

Rahman Khan and Ors., AIR 1922 All. 54. Allahabad

High Court had occasion to consider an agreement

where defendant had contracted to pay eight annas a

year as a rent of the site. Section 17 of the

Registration Act, 1866 was also referred to and

relied by the High Court. The High Court held that

when the terms of the lease are looked at, one sees

that though in fact it might continue for an

undefined number of years, there was no certainty 16

that it would last for more than one year, hence

lease was held not exceeding a term of one year.

Following was held by the High Court:-

“……………………………………The terms of the kabuliyat have been read to us. Shortly, they are to the effect that the Zamindar let the site to Sheo Prasad on a payment of eight annas a year and incidental obligations but the kabuliyat provided that if the eight annas was not paid in any one year, or if the tenant failed to make the incidental payments for marriages et cetra, the lease would thereby some to an end. Furthermore, the lease would also come to an end if the lessee did not conduct himself properly towards the Zemindar. Therefore, when the terms of the lease are looked at one sees that though in fact it might continue for an undefined number of years, there was no certainty that it would last beyond the term of one year. Therefore, it did not come within the classification of Section 17(d) as being a lease for a term exceeding one year. That being so, it was not a document which had compulsorily to be registered……………………………….”

17. We may notice another judgment of Lahore High

Court in Mengh Raj Vs. Nand Lal and Ors., AIR 1939

Lah.558. In the above case, in the lease, rate of

rent was payable per mensem, condition of payment of

annual rent was also mentioned there. The High Court

noted the condition of the lease and has also applied

the provisions of Section 17(1)(d) of the 17 Registration Act, 1908 and held that the said lease

was not registrable. In paragraph 1 of the judgment,

the contents of the lease have been quoted, which are

to the following effect: -

“……………………The main provisions of the lease in question may be translated as follows:

We, Nand Lal and Murli, sweepers of Hazro, have taken on rent a house from Mengh Baj of Hazro on condition of payment of an annual rent of Rs. 40-8-0 for a period of one year certain. We agree that we will live as tenants in this house and will pay rent at the rate of Rs. 3-6-0 per mensem, month by month on a receipt being granted to us by the landlord. In default of payment of rent the landlord can eject us and recover arrears of rent in any manner he likes. After the expiry of the term it will be the option of the landlord to give the house to us on rent or eject us and give it to other tenants. We will have no objection to this. The term of the lease is from the 1st Har, Sambat 1984 to the end of Jeth, Sambat 1985. We have been tenants under the landlord for a long time and have been paying rent.”

18. After considering the conditions of the lease and

referring to Section 17(1)(d), the High Court laid

down following in paragraph 3: -

18

“3. On a construction of the above deed it is obvious that it is not a lease from year to year, nor for a term exceeding one year, and the sole question is whether or not by it a yearly rent has been reserved which brings it within the letter of the Section. In Mt. Aishan v. Municipal Committee Lahore 92 Ind.Cas. 526 Campbell J. held that a mere recital of an annual rate of rent did not constitute the lease, a lease reserving a yearly rent within the meaning of Section 17, Registration Act. The lease in that case was determinable at any time at the will of the landlord. In the present case after the expiry of one year for which the lease was granted, this lease too was determinable at the end of Jeth, Sambat 1985. In this aspect the present lease constituted no more than a tenancy-at-will after the expiry of the first year and so appears to be covered by the decision of Campbell, J. referred to above. There is considerable body of authority for the proposition that where there is a tenancy-at-will created even though the rent is fixed and is payable annually, the document is not subject to compulsory registration. Reference in this connexion may be made to Muhammad Masam Khan v. Mt. Bakhtawar (1895) 70 P.R. 1895 where a Division Bench held on a construction of the document before them that only those leases must be registered which are in terms for a period exceeding one year, a lease reserving a yearly rent, and containing no other provision establishing a tenancy-at-will, being presumably a lease from year to year.”

19. We may notice that in the above case although the

annual rent was mentioned but, however, payment of 19

monthly rent was mentioned in the lease deed. The

rent note, which we are considering contains only

monthly rent and payment month by month. As per law

laid down by this Court in Ram Kumar Das(supra) there

shall be a presumption that the tenancy in the

present case is monthly tenancy. When the clauses of

rent note are cumulatively read, the intention of the

tenant is more than clear that tenancy was only

monthly tenancy, which could have been terminated on

default of payment of rent by 5th day of any month or

by notice of one month. The rent deed did not confer

any right to tenant to continue in the tenancy for a

period of more than one year nor it can be said that

tenancy was created for a period of more than one

year. Clause (9), which noticed the promise of the

tenant of payment of rent by increasing 10% each year

was a promise contingent on tenancy being continued

beyond one year but cannot make the tenancy year to

year or tenancy for a period of more than one year.

Present was a case of tenancy for which no period was

specified and looking to all the clauses

cumulatively, we find that the rent note was not such 20

kind of rent note, which requires compulsory

registration under Section 17(1)(d).

20. We may further notice that Rent Controller had

returned a finding regarding rate of rent @

Rs.2,000/- per month and further the tenant was

liable to pay the house tax, which was not paid from

1999 to 2005 and the decree of eviction was passed

accordingly. The Appellate Court although accepted

the finding of the Rent Controller that rate of rent

was @ Rs.2,000/- and not Rs.1,000/- but merely on the

finding that landlord cannot claim 10% increase of

rent every year since the document was not registered

had allowed the appeal and set side the judgment.

There is no specific finding by the Appellate Court

regarding the liability of the tenant to pay the

house tax. The Appellate Court after holding that

document-rent deed was compulsorily registrable and

having not registered allowed the appeal. No finding

was returned by the Appellate Court that tenant was

not in default and tenant has deposited the necessary

amount to save himself from eviction. We, thus, are

of the view that the judgment of the Appellate Court 21

is unsustainable on the above ground also. We, thus,

are of the view that the judgment and decree of the

Rent Controller directing eviction ought not to have

been interfered by the Appellate Court.

21. In result, the appeal is allowed. The judgment

and decree of the Rent Controller directing eviction

of the tenant is restored. No costs.

......................J. ( ASHOK BHUSHAN )

......................J. ( M.R. SHAH )

......................J. ( V. RAMASUBRAMANIAN )

New Delhi, June 17, 2020.