TMI Blog1949 (3) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... f to defendant 1 for a period of five years commencing from 1st September 1932, with an option of renewal for a further period of five years the rent reserved being ₹ 625, a month. At the end of five years, the lessee ex. ercised theoption of renewal and the lease continued up to 31st August 1942 when it came to an end by efflux of time. During the period of the lease defendant 1 created a sublease in favour of defendant 2 in September 1932 in respect of the upper floor of the demised premises at a rental of ₹ 210/- per month and on 1st May 1940 he granted a sub-lease of the ground floor to defendant 3 at a monthly rental of ₹ 172. On 21st July 1942 the plaintiff wrote a letter to defendant l formally demanding vacant possession of the demised premises by the 31st of August following when the lease was due to expire, and defendant l passed this letter on to defendants 2 and 3 requesting the latter to comply with its directions. On 17th August 1942 a reminder was sent by the plaintiff to defendant 1 and in this letter it was stated inter alia that the premises were required by Government for war purposes and that the military authorities would take possession of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank on or about 5th January 1943. On that date the plaintiff addressed two letters to the two defendants which were worded in identical manner and stated inter alia that these cheques had been accepted by him as part deposits towards his claim for compensation for illegal use and occupation of the premises by defendants 2 and 3 since 1st September 1942, and that they were accepted without prejudice to the plaintiff's rights and contentions under the Rent Act. The claim for ejectment, it was asserted, which the plaintiff had made previously, would not be affected in the least by receipt of these monies. Stamped receipts acknowledging receipt of these amounts were sent to the two defendants along with the letters. From the month of December 1942, up to 1st September 1943 rents paid by defendants 2 and 3 for the portions of the house in their occupation were accepted by the Receiver appointed by the mortgagees as mentioned above, and in the receipts granted by the Receiver it was stated that they were given without prejudice to the rights of the plaintiff or the occupiers of the premises who paid these rents. The Receiver gave up possession of the property on and from 1st Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and proved, a case of holding over within the meaning of Section 116, T.P. Act, has been made out by defendants 2 and 3 and they could claim the status of tenants as contemplated by that section. 8. Before I advert to the arguments advanced on this point by the learned Counsel for the plaintiff appellant, it may be convenient to examine the language of Section 116, T.P. Act. Section116 runs as follows: If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106 9. On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised premises to the lessor. If the lessee or a sub-lessee under him continues in possession even after the determination of the lease, the landlord undoubtedly has the right to eject him forthwith; but if he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tenancy contemplated by Section 116, T.P. Act, is a new tenancy which is brought into being after the expiry of the old, if and when the conditions laid down in the section are fulfilled. The essential thing in a new tenancy is that the parties must be ad idem as to its terms. If this agreement or consensus is wanting, no tenancy can possibly come into existence, and the position of the lessee, whose lease has expired, must be considered to be that of a trespasser. It is said by the learned Counsel that this is exactly what has happened in the present case. On the one hand, defendants 2 and. 3 when they remitted rents to the plaintiff did so, not for entering into a fresh agreement with the plaintiff but only to discharge what they conceived to be their existing legal obligation as statutory tenants under the provision of the Bombay Rent Restriction Order. On the other hand, the plaintiff did not accept the rents paid by defendants as rents at all, but only as compensation for wrongful use and occupation of the premises by the latter. Thus the parties were not ad idem upon the basis of which a new tenancy could be founded. 13. This argument, though plausible at first sight, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that defendants 2 and 3 asserted, though wrongfully, that they were statutory tenants and purported to pay rents in that capacity. There was, therefore, no offer of fresh tenancy implied in their payment of rent which could be said to have been accepted by the plaintiff. I do not think that this contention is right. From the letters that were exchanged between the parties, it would appear that on 17th August 1947 the plaintiff intimated to defendant l that the entire premises had been hired by Government for military purposes and that the sub tenants must vacate the portions in their occupation before 1st September following when the military authorities were due to take possession of the house. On 21st August 1942 the solicitor for defendant 2 wrote to the plaintiff a letter, requesting him to send a copy of the document relating to the hiring of the bungalow by the Government or else to arrange for inspection of the same immediately, so that his client might ascertain the exact position and approach the Government, if necessary, in connection with the matter. The plaintiff refused to accede to this request and on 29th August 1942 wrote to defendant 2's solicitor stating int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand, the specific case set up by him was that the plaintiff had entered into negotiations with him prior to the expiry of the lease and agreed to accept him as a tenant in respect of the ground floor of the premises at ₹ 200 a month. The plaintiff, it is said, subsequently turned round and demanded ₹ 400 as rent per month and that is why defendant 3 thereafter did send and continue to send only ₹ 172 as rent every month. 18. From the evidence adduced in this case it is just probable that when the plaintiff was refusing to accept rents from defendants 2 and 3 and threatening to eject them as trespassers, the latter were advised by their legal advisers to claim protection under the Rent Restriction Act. This seems to be the idea entertained by defendant l when he wrote to the plaintiff on 3rd September 1942. The claim, however, was never put forward specifically by defendant 3 and so far as defendant 2 is concerned, the state-ments of her solicitor, as referred to above, were nothing else but a lawyer's protest against the continued assertion of the plaintiff that defendant 2 was a trespasser out and out whose possession of the premises was entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in the conduct of these defendants and noncertainty as to the character in which these payments were offered to be made. The cheques sent by defendants 2 and 3 on 30th September and 6th October 1942 respectively were returned by the plaintiff and there is no doubt that at that time he had no intention of treating these defendants as tenants or accepting any rents from them. There was obviously a change when the second set of cheques were sent to the plaintiff in November 1942. This time they were not returned to the defendants and the plaintiff kept them in his hands for some time and then sent them on to his bankers. Curiously enough this synchronizes with the appointment of a Receiver by the mortgagees who was to take possession of the house on 20th November 1942. It may be that it was this circumstance which brought about a change in the mind of the plaintiff. But whatever the motive might have been, the fact re. mains that the plaintiff cashed these cheques and appropriated the monies which were paid by the defendants as and by way of rents and rents only, The protest or the explanation of the plaintiff came only on 5th of January 1943 when the plaintiff intimated to defenda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se expired by efflux of time on 31st August 1942. During the term of the lease the lessee sublet a portion of the house to respondent 1 (defendant 2) at a monthly rent of ₹ 210 and another portion to respondent 2 (defendant 3) at a monthly rent of ₹ 172, being himself in possession of the rest of the house. On the termination of the lease, the lessee delivered vacant possession of the portion in his Occupation, but the respondents in spite of demand refused to vacate the portion respectively sublet to them, but sent cheques every month in purported payment of the rents respectively due from them. Although appellant at first returned the cheques sent for the months of September and October refusing to recognise respondents as tenants, he paid those cheques into his banking account when they were again sent to him in November. A cheque sent by respondent 1 in December for the rent of November was similarly dealt with. On 5th January 1943 the appellant wrote to the respondents acknowledging the receipt of those cheques but accepting them without prejudice to his rights and contention under the Rent Act and refusing to recognise the respondents as tenants. Meanwhile, on 20t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and without prejudice to his rights and contentions could not be deemed to be acceptance of rent within the meaning of Section 116. He accordingly decreed the suit. 25. On appeal a Division Bench of the Court (Chagla Ag. C.J. and Coyaji J.) disagreed with the view of the trial Judge as to the true' effect of the lessor's acceptance of rent under Section 116. Distinguishing the decision in Navnitlal Chunilal v. Babu Rao A.I.R. (32) 1945 Bom. 132, a case decided under Section 113, they were of opinion that, while the Court could under that section take into consideration not only the payment and acceptance of rent but also all the facts and surrounding circumstances, under Section 116 a statutory contract between the landlord and the person holding over comes into existence as soon as the landlord accepts rent. and that no other question with regard to the intention of the landlord for accepting rent can arise under Section 116. On this view, they held that a tenancy from month to month was established on the facts of the case and, no notice to quit having admittedly been given by the appellant, his suit must fail. The learned Judges did not consider it necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus: If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106. 28. It is argued by the Advocate.General of Bombay that property here means the whole property which is the subject of the lease and, therefore the section has no application where only a portion or portions of the property have been sub-leased by the lessee. I am unable to agree. Section 108(j) recognises the right of a lessee to sub lease the whole or any part of his interest in the property leased, and where the lessor finds, on the expiry of the term, a number of under-lessees continuing in occupation and accepts rents from one or more of them, there is no obvious reason why Section 116, which expressly includes under-lessees also within its scope, should not have application. There is no warrant, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under-lessee holding over and not an option exercisable by the lessor alone. 30. Mr. Setalyad on behalf of the respondents brought to our notice a decision of the Bombay High Court, Meghji Vallabhdas v. Dayaljilal Co. A.I.R. (11) 1924 Bom. 322, where Fawcett J. held that the assent of the lessor and not that of the lessee was material for the purposes of Section 116. The decision appears to be based on a too literal construction of the language employed and does not give effect to the true meaning of the section. 31. I am accordingly of opinion that the learned appellate Judges in the Court below approached the question from a wrong angle in that they regarded the cashing of the cheques sent by the respondents for September and October rents as conclusive evidence of a statutory con-tract of tenancy under Section 116 and failed to consider whether, in all the circumstances of the case, it could reasonably be inferred that the appellant and the respondents, between whom there had been neither privity of contract nor privity of estate, were ad idem as to the creation as between themselves of the relationship of landlord and tenant on a contractual basis. 32. As has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iously returned by the appellant but also another cheque for ₹ 210 being the rent for October and asked for duly receipted bills for September and October. When the appellant's solicitor returned these cheques also, stating that they had no instructions to accept them, respondent l's solicitors sent them to the appellant direct. 34. In the meantime respondent 2's solicitors by their letter dated 8th September 1942 addressed to the appellant's solicitors put forward an agreement to let respondent 2 continue in possession on payment of ₹ 200, p. m. from 1st September 1942. The appellant's solicitors, however, denied any such agreement by their letter of even date. Respondent 2's solicitors wrote back on 11th September 1942 saying that the denial was false to the appellant's knowledge as will be proved at the proper time and place and that the appellant was trying to exact exorbitant rent from our client on false excuses . They added that even the rent of ₹ 200 per month agreed to by our client with a view to avoid trouble is higher than the standard rent. It may be noted that standard rent is the rent payable under the Rent Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months till September 1943 were, as already stated, received from the respondents by the receiver, without prejudice to the rights of Mr. Capadia as well as of Mr. Warden or Mr. Marshall, as the case may be, and from October 1943 onwards till the date of suit the rents were received by the appellant himself without prejudice to my rights and contentions . 36. The question is whether it can be inferred from these facts that there was consensus ad idem between the parties to a contract of tenancy from first September from 1942. 37. The learned appellate Judges in the Court below, viewing the question from the standpoint of appellant's election by conduct, based their conclusion on the fact that the appellant deli-berately and advisedly got the cheques sent by the respondents as rent cashed through his bankers. They referred to the previous conduct of the appellant in refusing to accept the cheques and treating the respondents as trespassers as far from helping the plaintiff, going to show that he took a different view and came to a different conclusion when he cashed the cheques. They attached special significance to the appellant's cashing of the cheques on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tenancy between the appellant and the respondents. The facts of the case are, in my opinion, such as rebut any presumption of a monthly tenancy under Section 116, T.P. Act. 39. There is not much force in the suggestion that the mortgagees' intervention by appointing a receiver for the collection of rents and calling upon the respondents to pay the rents to him suddenly induced a definite change of attitude on the part of the appellant in regard to his relationship with the respondents. Even if the amounts of the cheques cashed by the appellant on 23rd November 1942 had been collected by the Receiver, the appellant would have received credit for those sums in the mortgagee's account. There is nothing to show that the appellant was so pinched for money that receiving a sum of about ₹ 750, the amount of those cheques, into his own hands rather than getting credit for it at the hands of his mortgagee would have induced him to recognise the respondent as his tenants and thereby bring them within the protection of the Bent Restriction Acts, so as to place it beyond his power thereafter to evict them. In fact he paid off the entire debt in a few months there-after. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be implied from such payments and receipt of rent on the principle underlying Section 116, T.P. Act Their Lordships summed up the position on the facts as follows: The landlord was receiving the rent, but protecting himself by giving receipts in the names of the original mukarraridars. In their Lordships' option the effect of this was that the rent was paid and received by the parties respectively without prejudice to their above mentioned contentions until the question of the rights in respect of the lease was settled. The position here, as I have endeavoured to show, is more or less similar. Rejecting the contention based on Section 116 their Lordships went on to observe: In their Lordships' opinion this is not a case of the lessee or under-lessee holding over within the meaning of the section, but even if the case were to be considered on the assumption that the provisions of the section were applicable, the facts of this case would go to show, as already stated, that, the parties in paying and accepting rent after the expiration of the lease for lives were acting without prejudice to their respective contentions, and it would have to be held that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Baron Bramwell put it in the same case: His act would be taken to be rightful and bind him rather than his words make his act wrong. But the position is different where the tenancy is at an end either by expiry of a notice to quit or by effluxion of time. In such a case the continuance in possession by the former tenant would be wrongful and he would be liable to pay, not rent, but only compensation for use and occupation. If in such circumstances, the lessor received the money sent as rent it could not be said that he took it wrongfully, and if he made it clear that he received it without prejudice to his right to insist that the tenancy had come to an end, there could be no question of his words making his act wrong, or of his electing to affirm the tenancies. A fresh tenancy could arise only by agreement of the parties and whether an agreement could be implied is a matter of proper inference to be drawn from the conduct of the parties in the light of the surrounding circumstances. 43. The distinction between cases of forfeiture and cases of termination of tenancy has been pointed out in Davies v. Bristou (1920) 3 K.B. 428 and Penrhos College v. Butler (1920) 3 K.B. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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