Civil Appeal No 114 of 1950
Appeal from a judgment and decree of the High Court of Patna Shearer and Reuben JJ dated 5th November 1948 in Appeal No 2064 of 1946 271 which arose out of a decree of the District Judge of Purulia in Title Appeal No 116 of 1945
The facts are stated fully in the judgment
MC Setalvad Attorney General for India Nandial Untwalia with him for the appellant
B C De Jyotirmoy Ghose with him for the respondent
November26
The Judgment of the Court was deliv ered by MUKHERJEA J
This appeal is on behalf of the defendant and it arises out of a suit commenced by the plaintiff respondent in the Court of the Subordinate Judge at Chai bassa for recovery of possession of the land described in schedule to the plaint on the allegation that the defendant was a monthly tenant in respect of the same and that the tenancy was determined by a notice to quit
The suit was decreed by the trial court and the decision was affirmed on appeal by the District Judge Purulia and on Second Ap peal by a Division Bench of the High Court of Patna
The defendant has now come up to this court on the strength of a certificate granted under section 110 Civil Procedure Code
Mr Setalvad appearing on behalf of the defendant appellant stated to us at the outset that he would not dispute the validity or sufficiency of the notice to quit served upon his client if on the facts of this case he is held to be a monthly tenant under the plaintiff in respect of the premises in suit
His contention in substance is that the defendant was at no point of time a monthly tenant under the plaintiff or his predecessor
There might have been according to the learned Counsel two tenancies for one year each for two successive periods but on the expiry of the second yearly lease which happened on 7th December 1926 the defendant ceased to be a tenant and no fresh tenancy was created by holding over as is contemplated by section 116 of the Transfer of Property Act
As there was no holding over there could not be any question of a monthly tenancy being brought into existence 272 under the provision of section 116 of the Transfer of Property Act and the present suit of the plaintiff having been admittedly brought more than 12 years after the deter mination of the second yearly lease is barred by limitation under Article 139 of the Indian Limitation Act
The whole controversy in this appeal thus centres round the point as to whether the defendant was in fact a monthly tenant under the plaintiff at the date when the notice to quit was served upon him
To appreciate the respective contentions that have been put forward upon this point by the learned Counsel on both sides it will be necessary to narrate briefly the material facts in their chronological order
The property in suit is a plot of land measuring 4 bighas 12 cuttas and is comprised in old Survey plot No 578 of village Jugselai in the district of Singhbhum
The entire village forms part of the Dhalbhum estate of which the plaintiff is admittedly the present proprietor
One Charan Bhumiji was the  Prodhan of village Jugselai from some time before 1913 and on 24th July 1913 the father of the defendant by a registered Patta took a lease of about 31 bighas of land appertaining to Survey plot No 573 from this Prodhan for purposes of cultivation
It is not disput ed that the property in suit is covered by this Patta
At that time the proprietor of the Dhalbhum estate was Raja Satrughna and he died in 1916 leaving behind him a will by which the entire estate was bequeathed to the present plain tiff
The plaintiff s claim under the will was challenged by one Partap Chandra Deo Dhabal who succeeded in getting his name recorded as proprietor of the zemindari in the Singhbhum Collectorate
Thereupon the plaintiff instituted a suit being Title Suit No 67 of 1921 in the Court of the Subordinate Judge at Midnapore for establishment of his title to the zemindari and the suit was decreed by the trial Judge
Against this decision the defendant Pratap Chandra Deo Dhabal took an appeal to the High Court of Calcutta and during the pendency of this appeal the High Court appointed a Receiver who was put in 273 possession of the entire estate
On 8th December 1924 the defendant executed a registered Kabuliyat in favour of the Receiver by which he purported to take settlement of the land in suit for a period of 10 years at a rental of Rs 46 per annum and a selami of Rs 250
There was a covenant in the lease which looks like one for perpetual renewal and it was to the effect that on the expiry of the term if the lessor did not require the land for his own purposes and decided to re settle it the lessee would be entitled to fresh settlement on enhancedrent and on such terms as might be then agreed upon between the parties
It appears from the record that the selami money amounting to Rs 250 was paid by the defendant to the Receiver several months before the Kabuliyat was executed and the rental amounting to Rs 46 was paid for the first time on 8th of March 1925
The next payment of rent was made in the succeeding year on 16th of March 1926
Admittedly no further payment of rent was made by the lessee either to the Receiver or to the proprietor since then up to this period
The High Court dismissed the appeal preferred by Pratap Chandra Deo Dhabal some time in 1924 and this order of dismissal was affirmed by the Judi cial Committee in May 1927
The Receiver was then dis charged and the plaintiff got possession of the entire estate in July 1927
On April 15 1937 the plaintiff brought a suit for ejectment being Title Suit No 2 of 1937 against the defendant in respect of this property in the Court of the Subordinate Judge at Chaibassa
The claim was based substantially upon the terms of the Kabuliyat executed by the defendant on 24th of December 1924 and the suit was in fact one for ejectment of a lessee on the expiration of the period provided for in the lease
It was only the renewal clause in the Kabuliyat that was challenged as invalid and inoperative not only because it was vague and indefinite but also on the ground that the Receiver acted beyond his authority in entering into a stipulation of this character
36 274 The defendant in his written statement resisted the plaintiff s claim for possession primarily on the ground that he had acquired permanent rights in the land under the Prodhan s Patta of 1913 and continuous occupation of it since then for more than 12 years
The Kabuliyat of 1924 he attempted to ignore altogether
It was said that it was executed only to avoid trouble and harassment at the hands of the Receiver and that being inoperative as a lease it could not in any view affect the prior rights which he acquired under the Patta of 1913
The trial judge decreed the suit
On appeal the judg ment was reversed by the District Judge and the plaintiff s suit was dismissed simply on the ground that the notice to quit that was served on the defendant was ineffectual in law to determine the tenancy
The District Judge found first of all that the Prodhan s Patta was void and inoperative in law and could not create any rights in the defendant inas much as the Prodhan had no authority to settle lands of this character
The Kabuliyat of 1924 was also held to be inef fectual as not amounting to a lease as defined by the Trans fer of Property Act
It was held however by the District Judge that apart from the Kabuliyat a tenancy was created by payment and acceptance of rent in the years 1925 and 1926 and after 1926 the defendant occupied the position of a monthly tenant by holding over under section 116 of the Transfer of Property Act
Such tenancy could be determined by fifteen days  notice expiring with the month of tenancy but as the notice which was served by the plaintiff upon the defendant did not fulfil this requirement the plain tiff s suit was bound to fail
The District Judge though he dismissed the suit gave the plaintiff a declaration to the effect that the defendant was liable to eviction on service of fifteen days  notice expiring with the end of the Bengali month of the tenancy
Against this decision the plaintiff took an appeal to the High Court of Patna and the appeal came up for hearing before Harries CJ and Fazl Ali J
The learned Judges affirmed the finding of the lower appellate court that 275 the Prodhan s Patta did not create any rights in the defend ant and that the Kabuliyat of 1924 was also ineffectual as a lease to give the defendant any tenancy right
The learned Judges further held that the defendant did not acquire any permanent right in the land by prescription or otherwise and that by reason of the payment of rent to the Receiver in the years 1925 and 1926 he became a tenant from month to month
In these circumstances the High Court con curred with the District Judge in holding that the notice to quit was insufficient for the purpose of determining the tenancy
It seems that the defendant made a strenuous endeavour before the High Court to establish that as the Patta of 1913 as well as the Kabuliyat of 1924 were both invalid and inoperative he was never a tenant in respect of the land in suit and no tenancy could be created by the two payments of rent inasmuch as the Receiver had no authority to receive them
It was contended therefore that the plaintiff was in possession of the land as a trespasser all along and thus acquired a good title by adverse possession
The High Court though it held definitely that the defendant was a tenant from month to month nevertheless kept open the question as to whether the payment of rent to the Receiver was tantamount to payment to the plaintiff
It was held that as the notice to quit was defective that was suffi cient for dismissal of the suit and the declaration made in the decree of the lower appellate court that the defendant was liable to be evicted on service of fifteen days  notice expiring with the Bengali month of the tenancy was directed to be deleted
This judgment of the High Court was pro nounced on the 5th of May 1942
Soon after this on 18th July 1942 the plaintiff served a notice to quit on the defendant asking him to vacate the land on the 7th of August following and as the defendant refused to give up possession the present suit was brought on 22nd July 1943
The plaint in the present suit is a very simple oneit proceeds entirely on the findings record ed by the High Court in the previous litigation
The right to 276 possession is not based on the terms of the Kabuliyat of 1024
The plaintiff avers that by reason of the payment of rent on 8th March 1925 and 16th March 1926 the defendant became a tenant from month to month under him and the tenan cy was determined by a proper notice to quit
The defendant in his written statement raised several pleas in answer to the plaintiff s claim
He reiterated his rights under the Patta of 1913 and urged that by reason of his holding possession of the land on assertion of a perma nent tenancy right for a long period of time he acquired a valid title to the property
As regards the Kabuliyat of 1924 it is said in one part of the written statement that the defendant executed this document under misapprehension of facts without knowing the contents thereof
But at anoth er place it is stated that the Kabuliyat was binding on the plaintiff and he was not entitled to institute a suit in contravention of its terms without in any event refunding the selami money
The defendant admitted what he denied in the earlier suit that the payments made to the Receiver amounted to payments to the plaintiff himself although this question was left open by the High Court on the previous occasion
The other pleas raised in the written statement are not material except that a specific point was taken challenging the sufficiency of the notice to quit that was served upon the defendant
On these pleadings a number of issues were framed
The trial judge held on a consideration of the materials placed before him that the Prodhan s Patta was a void and inopera tive document and conferred no rights on the defendant
He negatived the case which the defendant attempted to make in course of hearing that the Kabuliyat executed by him was obtained by threat and coercion
It was held by the Subordi nate Judge in accordance with the decisions of the Patna High Court on the point that the Kabuliyat could not operate as a lease under the Transfer of Property Act and conse quently the defendant did not acquire the rights of a lessee under the same
He held however 277 that by payment and acceptance of rent a new tenancy was created de hors the Kabuliyat and as the new tenancy was for building purposes it
was a tenancy from month to month under section 106 Transfer of Property Act terminable by fifteen days notice
As the notice was proper and suffi cient the trial judge decreed the plaintiff s suit
Against this judgment the defendant took an appeal to the court of the District Judge Purulia and the District Judge dismissed the appeal and affirmed the judgment of the trial court
It appears that two points were raised by the defend ant before the District Judge in support of his appeal one was that the Kabuliyat of 1924 was effective as a lease and consequently the defendant could not be ejected in contra vention of the terms thereof
At the same time it was con tended that there was no tenancy at all held by the defend ant under the plaintiff inasmuch as the payments made to the Receiver could not be regarded as payments to the plain tiff
The first point the District Judge pointed out was contrary to the express decisions of the Patna High Court while the second was contradictory to the defendant s own admission in the written statement
The defendant then came up in Second Appeal before the High Court of Patna and the appeal was heard by a Division Bench consisting of Shearer and Reuben JJ
The learned Judges agreed in dismissing the appeal and affirming the decree made by the courts below but the grounds upon which they based their decision are not identical
As regards the nature of the tenancy created by implication of law in consequence of the Receiver having accepted payment of rent from the defendant it was held by Reuben J that when the Receiver accepted rent in 1925 it should be presumed that the parties intended to create a tenancy for one year and when he accepted rent again in 1926 such acceptance amount ed to his assenting to the defendant s holding over and in view of the purpose for which the tenancy was created the defendant from that time became a tenant from 278 month to month under the provision of section 116 Transfer of Property Act
Shearer J felt difficulty in accepting this view though in his opinion if a periodic tenancy was created at all it was from month to month and not from year to year
There are observations however in the latter part of the judgment of Shearer J which would go to show that in his opinion the creation of two leases each for one year could be fairly gathered from the admitted facts of the case
The learned Judge was not sure however as to whether the defendant ever became a tenant of the plaintiff
He discussed the nature of the renewal clause contained in the Kabuliyat and held it to be void for uncertainty
He also negatived the defendant s plea on the strength of adverse possession
His conclusion was that whatever view might be taken regarding these points the defendant had no valid defence to the plaintiff s claim for eviction and consequently the decision of the courts below was right
It is the propriety of this decision that has been challenged before us in this appeal
Mr Setalvad in support of his client s case has not called in aid the Prodhan s Patta of 1913 nor has he placed any reliance upon the Kabuliyat of 1924 and the covenant for renewal contained therein
He has not disputed before us that the payments made to the Receiver were in reality payments to the plaintiffs and has conceded that a tenancy could be created by implication by reason of his client having paid and the Receiver having accepted rents in re spect of the suit premises
His contention as indicated already is that by reason of the payment and acceptance of rent there were two tenancies for one year each creat ed for two successive years but the relationship of landlord and tenant between the parties came to an end on the expiration of the second annual lease
As there was no holding over by the defendant since then as contemplated by section 116 Transfer of Property Act there was no subsist ing tenancy at any time after December 1926 and the plain tiff s suit instituted in the year 1943 was obviously time barred
279 Mr De appearing for the plaintiff respondent has on the other hand contended that the tenancy that was created by payment and acceptance of rent in the year 1925 was from the beginning a tenancy from month to month under the provi sion of section 106
Transfer of Property Act
Alterna tively he has argued that if a tenancy for one year only was created in the year 1925 then after the expiration of that one year s lease the defendant held over and the Receiver s assent to his continuing in possession is evidenced by acceptance of rent from him in the year 1926
The tenancy thus created would be a tenancy from month to month under section 116 Transfer of Property Act
Lastly it is argued that even if two successive tenancies were created for one year each the facts admitted and proved would go to show that the tenant held over after the second annual lease and consequently a tenancy from month to month came into existence in accordance with the provision of section 116 Transfer of Property Act even though no rent was demanded by the landlord after 1926
The contro versy between the parties so far as this appeal is con cerned therefore narrows down to the following three points  1 What was the nature of the tenancy created by ac ceptance of rent by the Receiver from the defendant on the 8th of March 1925  If it was a tenancy from month to month it is not disputed on behalf of the defendant that no question of holding over would at all arise and the plain tiff would be entitled to succeed
2 If in 1925 a tenancy was created for one year can the landlord s assent to the defendant s continuing in possession be inferred from the fact that rent was accepted from the defendant in March 1926  3 If the payment and acceptance of rent in March 1926 brought into existence a tenancy for another year was there any subsequent tenancy created after the second year although there was no demand or acceptance of rent by the landlord since then  280 So far as the first point is concerned the courts below have proceeded on the view that a registered instru ment signed by the landlord was necessary to create
a valid lease for ten years
That view was not questioned before us and we express no opinion on this point
Proceeding there fore on the assumption that even though the parties might have intended to create a lease for 10 years no operative ease came into existence the only facts admitted are that the defendant remained in possession of the land belonging to the plaintiff with the permission of the Receiver who represented the plaintiff s estate and paid rent to the latter
From these facts a tenancy could be fairly presumed and the point for determination is what was the duration of the tenancy that was created in the present case Section 106 of the Transfer of Property Act lays down 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 les see by fifteen days  notice expiring with the end of a month of tenancy
 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 sec tion applies not only to express leases of uncertain dura tion but also to leases implied by law which may be inferred from possession and acceptance of rent and other circum stances
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 281 regarded as a tenancy from month to month
unless there was a contract to the contrary
The question now is whether there was a contract to the contrary in the present case  Mr Setalvad relies very strongly upon the fact that the rent paid here was an annual rent and he argues that from this fact it can fairly be inferred that the agreement between the parties was certainly not to create a monthly tenancy
It is not disputed that the contract to the con trary 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
If it is no contract in law the section will be operative and regulate the duration of the lease
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 there to
Conse quently 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
But the difficulty in applying this rule to the present case arises from the fact that a tenancy from year to year or reserving a yearly rent can be made only by registered instrument as laid down in section 107 of the Transfer of Property Act1
The Kabuliyat in the case before us is undoubtedly a registered instrument but ex concessis it is not an operative document at all and cannot consequently fulfil the requirements of section 107 of the Transfer of Property Act
This position in fact is not seriously controverted by Mr Setalvad but what he argues is that a lease for one year certain might fairly be inferred from the payment of annual rent and a stipulation like that would not come within the mischief of section 107 of the Transfer of Property Act
His contention is that the payment of an annual rent as was made in the present case is totally inconsistent with a monthly lease
We are not unmindful of the fact that in 1 Vide Debendra Nath vs Syama Prasanna  1126 37 282 certain reported cases such inference has been drawn
One such case has been referred to by MrJustice Reuben in his judgment1 where reliance was placed upon an earlier decision of the Calcutta High CoUrt3
A similar view seems to have been taken also in Matilal vs Darjeeling Municipality3
But one serious objection to this view seems to be that this would amount to making a new contract for the parties
The parties here certainly did not intend to create a lease for one year
The lease was intended to be for a period exceeding one year but as the intention was not expressed in the proper legal form it could not be given effect to
It is one thing to say that in the absence of a valid agreement the rights of the parties would be regulat ed by law in the same manner as if no agreement existed at all it is quite another thing to substitute a new agreement for the parties which is palpably contradicted by the admit ted facts of the case
It would be pertinent to point out in tiffs connection that in the Second Appeal preferred by the plaintiff against the dismissal of his earlier suit by the lower appellate court the High Court definitely held that the defendant s tenancy was one from month to month under section 106 Transfer of Property Act and the only question left open was whether payment to the Receiver amounted to payment to the plaintiff himself
In this suit the defendant admitted in his written statement that payment to the Receiver had the same effect as payment to the plaintiff and the trial judge took the same view as was taken by the High Court on the previous occasion that by payment to and acceptance of rent by the Receiver the defendant became a monthly tenant under section 106 Transfer of Property Act
In his appeal before the District Judge which was the last court of facts the only ground upon which the defendant sought to challenge this finding of the trial judge was that the Receiver was an unauthorised person because of the decision of 1 Aziz Ahmad vs Alauddin Ahmad AIR 1933 Pat 485
2 Md Moosa vs Jaganund 3 17 CLJ 167
283 the Judicial Committee which set aside his appointment and consequently acceptance of rent by such person could not create a monthly tenancy
This shows that it was not the case of the defendant at any stage of this suit that because one year s rent was paid a tenancy for one year was brought into existence
We think therefore that on the facts of this case it would be quite proper to hold that the tenancy of the defendant was one from month to month since its inception in 1924
This view finds support from a number of reported cases1 and in all these cases the rent payable was a yearly rental
On this finding no other question would arise and as the validity of the notice has not been questioned before us the plaintiff would be enti tled to a decree in his favour
The appeal thus fails and is dismissed with costs
Appeal dismissed


Summary:
The rule of construction embodied in section 106 of the Transfer Property Act 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
270 The contract to the contrary contemplated by the said sec tion need not be an express contract it may be implied but it should be a valid contract
If the contract is invalid the section will regulate the duration of the lease
When the rent reserved is an annual rent a presump tion would arise that the tenancy was an annual tenancy unless there is something to rebut this presumption
But under section 107 of the Transfer of Property Act a tenancy from year to year or reserving an yearly rent can be made only by a registered instrument
The defendant executed a registered kabuliyat to the Receiver who was managing an estate pending a suit purport ing to take a plot of land on lease for a period of ten years at a rental of Rs 46 per annum and paid the first year s rent of Rs 46 on the 8th March 1925 and the next year s rent on the 16th March 1926
No further rent was paid by the defendant to the Receiver or to the proprietor after that date
The proprietor treating the defendant as a monthly tenant served notice to quit on him on the 18th July 1942 asking the latter to vacate on the 7th August 1942 and instituted a suit for ejectment in July 1943
The kabuliyat was found to be inoperative in law and the defend ant contended that the payment and acceptance of annual rent in 1925 and 1926 did not create a monthly tenancy but two tenancies for one year each for two successive years that the relation of landlord and tenant came to an end on the expiration of the second annual lease and as there was no holding over the suit was time barred Held i that from the facts a tenancy could be pre sumed to have come into existence from 1924 ii as the purpose of the tenancy was for building structures on the land under sec
106 of the Transfer of Property Act the tenancy must be presumed to be one from month to month in the absence of a contract to the contrary iii a contract that the tenancy was for one year certain could not be inferred in the present case from the fact that an annual rent was paid in 1925 and 1926 inasmuch as the kabuliyat though inoperative in law showed that the parties never intended to create a lease for one year iv on the facts of the case it was quite proper to hold that the tenancy was one from month to month since its inception in 1924 and the suit was not time barred
Debendra Nath vs Shyama Prasanna and Sheikh Akloo vs Emaman ILR approved
Aziz Abroad vs Alauddin Abroad AIR 1933 Pat 485 Md Moosa vs Jaganand and Matilal vs Darjeel ing Municipality 17 CLJ 167 referred to