TMI Blog2013 (4) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... ovenants in the perpetual lease. This would not affect the rights of the lessor under the lease deed, subject of course to statutory protection, if any, to the new lessee/purchaser - We do not find any reason to issue notice on the application for condonation of delay - The application for condonation of delay and the appeal are dismissed. - CO. APP. 11/2013 - - - Dated:- 5-4-2013 - Sanjiv Khanna And Siddharth Mridul,JJ. Mr. Venkita Subramaniam, Mr. Dharmesh Shah and Mr. Rahul Bansal, Advocates. ORDER C.M.No.2197/2013 Exemption allowed subject to all just exceptions. The application is disposed of. C.M. 2196/2013 Co.Appeal 11/2013 1. There is delay of 47 days in filing of the appeal. Before issuing notice on the application for condonation of delay, we have deemed it appropriate to examine the grounds of appeal on merits. 2. The appellants‟ predecessor-in-interest had executed two registered perpetual or permanent lease deeds dated 23rd March, 1918 and 3rd November, 1927 in respect of agricultural lands in favour of Chandulal Karsandas, Mohanlal Vardhmanbhai and Lallubhai Narsinhdas Patel and Seth Rathilal Nathalal. Subsequently, Seth Rathilal Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions in Part I and IV prohibits or bar a lessee from transferring the leasehold rights in favour of a third person. Learned counsel has relied upon Section 13 (e), 13 (ee) and 15 of the said Act. The said provisions are included in Part II of the said Act. Assuming though not accepting that Part II is applicable, we do not think that there is a bar or prohibition or the Official Liquidator must surrender the leasehold rights to the appellant. Section 15 (1) of the said Act reads as under:- 15. In absence of contract to the contrary tenant not to sublet or transfer.-[(1)] Notwithstanding anything contained in any law [but subject to any contract to the contrary,] it shall not be lawful after the coming into operation of this Act for any tenant to sublet the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein: [Provided that the [State] Government may, by notification in the official Gazette, permit in any area the transfer of interest in premises held under such leases or class of leases and to such extent as may be specified in the notification.] 7. Bare reading of the aforesaid Section shows that subletting may be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r land is taken on lease by us or our heirs/successors and guardians, after deducting the lease amount for the years, which is collected by you, from the lease amount for fifteen years, we or our heirs/successors, administrators, whoever is there, shall give the amount, as is found due for the years, plus further amount for one year to you or your heirs/successors and guardians immediately, as written herein above. If those years have been completed, then, shall give the accumulated lease amount plus further lease amount for one year. That for this expenditure, by taking recourse of the law, you shall recover from us or our heirs/successors your lease amount with the expenses along with the accruing interest on the due amount and after taking the land from you, your heirs/successors, administrators and assignees, we shall hand over the land after making it into cultivable condition, duly filling or surfacing the pits, knolls, including hedge, and if do not return the land and pay the lease amount, then, you or your heirs/successors and administrators shall be entitled to recover the expenditure so incurred in the above connection, including interest thereupon and as stated hereinab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moreover, the Second Party is binding himself to retian the said land on lease for a minimum period of twenty one years and if within the said period, the Second Party has to return the land, then, by giving the lease amount of the period, which is still left out of twenty one years, at that time only, shall hand over the land to the First Party, and after completion of the period of twenty one years, the Second Party shall go on paying the lease amount, as above, until the Second Party retains the land, and if we surrender the land in between the year, then also, shall give lease amount for the entire year, but, on surrender of the land in the half term i.e. before twenty one years, the First Party has right in respect of th lease amount of the half term, which the Second party has to give, and the Second Party or the heirs/successors, guardians, attorneys, assignees of the Second Party bind themselves to give the same to the First Party and in accordance thereto, if the Second Party or the heirs/successors and guardians of the Second Party then, the First Party has absolute right to recover such amount from the Second Party or heirs/successors of the Second Party, including all e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dation. 12. Before we part on this point, it is pertinent to bring to notice the observation of Laxmidas Bapudas Darbar v. Rudravva, (2001) 7 SCC 409 which held as under: 17. It may have to be scrutinized as to what extent the provisions of Section 21 of the Karnataka Rent Act shall have an overriding effect over any other law or a contract. The Rent Acts have primarily been made, if not wholly, to protect the interest of tenants, to restrict charging of excessive rent and their rampant eviction at will. In that view of the matter, Section 21 of the Karnataka Rent Act provides that notwithstanding anything to the contrary contained in any contract, no order for eviction of a tenant shall be made by the court or any other authority. Undoubtedly, it is a provision providing statutory protection to the tenants as it is also evident from the heading of Section 21 of the Act. This prohibition is however relaxed under the proviso saying that an order for recovery of possession of the premises can be made on an application made on that behalf only on the grounds as enumerated in clauses (a) to (p) to the proviso. The non obstante clause contained under Section 21 of the Act, will ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned as follows: (i) On expiry of period of the fixed-term lease, the tenant would be liable for eviction only on the grounds as enumerated in clauses (a) to (p) of sub-section (1) of Section 21 of the Act. (ii) Any ground contained in the agreement of lease other than or in addition to the grounds enumerated in clauses (a) to (p) of sub-section (1) of Section 21 of the Act shall remain inoperative. Company Appeal 11/2013 Page 11 of 12 (iii) Proceedings for eviction of a tenant under a fixed-term contractual lease can be initiated during subsistence or currency of the lease only on a ground as may be enumerated in clauses (a) to (p) of sub-section (1) of Section 21 of the Act and it is also provided as one of the grounds for forfeiture of the lease rights in the lease deed, not otherwise. (iv) The period of fixed-term lease is ensured and remains protected except in the cases indicated in the preceding paragraph. 13. Lease hold rights of permanent nature are a capital asset and have market value, when they can be assigned or transferred to a third person unless there is a contractual or statutory bar/prohibition. Section 108 of Transfer of Property Act permits assignment. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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