IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRAD AT HYDERABAD Tuesday, August 16, 2011. Present: The Hon’ble Mr. Justice B. Chandra Kumar A.S.No. 388 of 2003 Between: B. Sakku Bai ..Appellant and State Bank of Hyderabad Represented by its Branch Manager, Huzurabad …Respondent THE HON’BLE SRI JUSTICE B. CHANDRA KUMAR APPEAL SUIT No.388 of 2003 JUDGMENT:- This appeal is directed against the judgment dated 29.11.2002 passed in O.S.No.32 of 2000 by the Senior Civil Judge, Huzurabad, whereby and whereunder, the suit filed by the plaintiff for recovery of amounts towards damages and arrears of rents was partly decreed with proportionate costs. 2. The appellant herein is the plaintiff and the respondent herein is the defendant before the Court below. For the sake of convenience, the parties will be hereinafter referred to as they were arrayed before the Court below. 3. The brief facts of the case are as follows:- The plaintiff – Smt. B.Sakkubai filed a suit before the Court below for recovery of Rs.1,80,000/- towards damages and Rs.6,000/- towards arrears of rents for the month of July, 1999, contending inter alia that she is the absolute owner of the house bearing No.19/24 situated at Huzurabad, Karimnagar District; the defendant – Bank obtained the said house on lease under a registered lease deed under Ex.A.1 for a period of 5 years from 01.02.1992; the defendant – Bank, through its letter dated 30.04.1999 informed her that it has vacated the premises and terminated the lease with effect from 31.07.1999; she got issued a legal notice directing the defendant to continue in the premises; after receipt of said legal notice, the defendant – Bank returned the keys of the premises to the plaintiff on 31.07.1999 and she refused to take the same; in spite of receipt of several legal notices, the defendant – Bank did not pay the damages to her; the defendant – Bank settled the damages caused to the premises at Rs.12,926/- and she accepted the said amount towards damages for the building and requested the defendant – Bank to arrange the payment of lease amount but the defendant – Bank did not comply with its obligation; as per note dated 06.06.2000, she is entitled for damages at Rs.1,80,000/- and Rs.6,000/- towards arrears of rent; the defendant continues to be liable to perform its obligation of payment of lease and rents and as the defendant has not complied nor intends to do so in future till the expiry of lease period. 4. The defendant contested the matter and filed counter mainly contending that it has taken the premises of the plaintiff on lease for a period of 5 years from 01.02.1992 on a monthly rent of Rs.5,000/- with an option to extend the same for another 5 years; it had informed the plaintiff through its letter dated 30.04.1999 with regard to termination of the lease with effect from 31.07.1999 with three months notice as per the terms of the lease deed; after exchange of notices, a separate letter was obtained from the plaintiff for the vacation of the premises on 14.06.1999; the plaintiff, through her husband, has agreed to undertake repairs of the building and to accept the damages caused to the building as per the estimation of the Bank’s civil contractor; since the plaintiff refused to receive the keys of the premises, a separate notice was issued to the plaintiff asking her to receive the keys; the plaintiff has agreed to settle the damages at Rs.12,926/-; the plaintiff suppressed that she filed a Writ Petition No.19979 of 1998 against the General Manager of the Bank seeking restraining the Bank from constructing any building for the purpose of establishment of their branch at Huzurabad, but the said writ petition was dismissed at the stage of admission itself and this shows the evil intention of the plaintiff to make the Bank to continue in her premises only on lease; it is not liable to pay the amount claimed by the plaintiff. 5. The defendant also filed an additional written statement contending that as per Section 106 of the Transfer of Property Act, the defendant, after issuing statutory notice to the plaintiff, vacated the premises and handed over the keys to the plaintiff and that the plaintiff is in possession and enjoyment of the premises and had leased out the premises to others. 6. To this additional written statement of the defendant, the plaintiff filed a rejoinder contending that the defendant suppressed that under what circumstances she had received the keys from the defendant; on 07.02.2000, a conditional settlement was arrived between her and the Bank under which, she agreed to receive the keys of the premises on a condition of payment of one year rents beyond July, 1999 to her; as per the conditional agreement, the Bank gave a letter to her on 08.02.2000 and, therefore, she accepted the keys of the premises from the defendant and this does not amount to express surrender by mutual agreement or implied surrender as defined under Section 111 of the Transfer of Property Act; as the conditional settlement was acted upon by the defendant – Bank, she is entitled to the suit claim. She had also denied that the defendant – Bank has followed the procedure prescribed under Section 106 of the Transfer of Property Act that the defendant had acted in the absence of any provision by giving notice to the plaintiff. 7. Basing on the above pleadings, the Court below settled the following issues for trial:- 1. Whether the plaintiff is entitled for the suit relief as prayed for; 2. to what relief. 8. Evidence was let in. On behalf of the plaintiff, she herself was examined as P.W.1 and Exs.A.1 to A.20 were marked. On behalf of the defendant, one R.Krishna Murthy was examined as D.W.1 and Exs.B.1 to B.15 were marked. 9. The Court below, on appreciation of oral and documentary evidence available on record, partly decreed the suit for an amount of Rs.6,000/- with proportionate costs. Aggrieved by the same, the plaintiff is before this Court as appellant. 10. Sri I.Aga Reddy, learned senior counsel for the appellant submits that the appellant is the owner of the house and it was leased out to the defendant – bank under Ex.A.1 for a period of five years commencing from 01.02.1992 on a monthly rent of Rs.5,000/- with a clause that the lease period shall be extended for a further period of five years and the bank shall pay the enhanced rent at the rate of 20%, i.e., Rs.6,000/- per month for another period of five years. His main submission is that there is no clause in the agreement by which the lease can be determined before the expiry of the agreed period. It is also his submission that the defendant – bank, even before the expiry of the agreed period, has vacated the premises by issuing the three months notice and thus caused loss to the plaintiff. Since the lease is terminable only at the end of the period but not earlier to that, the plaintiff is entitled for the damages as claimed by her. It is also his submission that the bank tried to introduce the second agreement, but however, the Court did not permit the defendant – bank to introduce the second agreement. Aggrieved by the said order of the Court below, the bank preferred a revision but was unsuccessful and, therefore, the alleged second agreement is not before this Court. It is also his submission that the bank relied on Clause – G of the lease deed and by interpreting the same, the bank contended that the lease is determinable even before the fixed period of lease. His main submission is that Clause – G of the lease deed envisages that the bank should keep the premises in a clean and sanitary condition and deliver vacant possession to the landlady and does not give any scope for determination or termination of the lease deed even before the lease period. In support of his contentions, learned senior counsel had relied upon the judgment in the cases between Bijoi Chandra Singh Vs. Howrah Amta Light Railway Co., Ltd.,[1], Jogendra Krishna Roy and others Vs. Krupal Harshi and Co.[2], and Subramania Chetty Vs. Somasundaram Chetty and others[3]. 11. Per contra, Sri P.A.V. Bala Prasad Learned counsel for the respondent, relying on the judgment of the Madras High Court i n Rasiklal M.Mehta v. The Hindustan Photo Films Manufacturing Co. Ltd.[4] a n d M/s. Uptron Powertronics Ltd v. G.L. Rawal[5] submitted that as the lease is an unregistered lease, it is terminable by giving a month’s notice. His main submission that though the earlier lease is a registered lease and though it was renewed, the renewal is not registered. He further submits that even the renewal of the lease requires registration and when once it is not registered, the same is terminable by giving one month notice, since the tenancy is month-to-month and is terminable as per the provisions of Section 106 of the Transfer of Property Act (for short ‘the Act’). 12. His main submission is that the defendant in this case has admittedly issued three months notice vide Ex B-2 dated:30-04-1999; subsequently the plaintiff has also leased out the premises from 1-5-2001 and the letter written by her reveals that she had been in possession of the property from the date, when the defendant had vacated the premises and these circumstances also makes her disentitled to claim damages for the subsequent period. The learned counsel appearing for the defendant further submitted that the plaintiff filed a Writ Petition against the respondent bank seeking a direction restraining the defendant-bank from constructing any building for the purpose of establishment of their Branch at Huzurabad, which was dismissed at the admission stage. 13. I have gone through the entire evidence and the pleadings of the parties. It is true that in case of premature termination of lease, the lessor is entitled to damages; but not for the rent for the unexpired period of lease, as held in Bijoi Chandra Singh’s case (1 supra). As far as the legal principles enunciated in the judgment cited by the learned counsel for the plaintiff in the above-referred case are concerned, there is no dispute with regard to the same. In view of the decisions relied on by the learned counsel for the respondent in Rasiklal M.Mehta’s case (4 supra) and M/s. Uptron Powertronics Ltd’s case ( 5 supra), renewal of the lease without registered instrument is invalid and there is no necessity to discuss other aspects of the case. Admittedly the original lease was from 1-2-1992 for a period of five years and, admittedly, that was a registered lease. Subsequently after expiry of the lease period by 1-2-1997, the lease was renewed for a further period of five years i.e., upto 31.1.2002. In the case M/s. Uptron Powertronics Ltd (5 supra) the Delhi High Court was dealing with a similar case. The appellant in that case came into possession of the suit premises by virtue of a lease deed dated: 31.5.1981,which expired by 1984. Thereafter, the parties entered into a registered lease deed on 17.7.1984 said to be from 1.5.1984. The lease was continued beyond the initial period of three years and the rent was enhanced as agreed. It was argued in that case that lease was continuous and perpetual in nature and can only be determined by mutual consent of the parties. The Delhi High Court after referring to the decision of the Apex Court in BPCL Vs. Khaja Midhat Noor[6] held that the lease of a immovable property exceeding one year can only be made by a registered instrument. Admittedly, in the present case, the lease between the parties is an unregistered one and it is therefore clear that in the absence of a registered lease, necessary consequences will follow. This means the tenancy would only be on month-to- month basis and the lease can be terminable by issuing a notice under section 106 of the Act, which, in fact, was done by issuing notice on 2.4.1997. Thus, finally it was held that since the lease was not extended by a registered instrument for the subsequent block of three years, it was only a month-to-month tenancy which can be terminated in accordance with the provisions of S. 106 of the Transfer of Property Act. The Madras High Court also taken a similar view in Rasiklal M. Mehta’s case (4 supta), wherein it was held that once the renewal of lease comes within the scope of S. 107, such lease can only be made by a registered instrument. Therefore, even if there is a clause or even there is an option for renewal of the lease in the original lease deed and when such a lease is renewed, the same amounts to entering into a fresh lease, which requires compliance of S. 107 of the Act. Therefore, the same must be through a registered document. 14. In view of the above, I hold that renewal of the lease for the subsequent period without a registered instrument has to be treated as lease for month-to-month basis and, therefore, termination of such lease by giving one-month notice under section 106 of the Act is valid. Accordingly I see no merits in this appeal and the appeal is accordingly liable to be dismissed. 15. Accordingly the appeal suit is dismissed. In the circumstances there shall be no order as to costs. _________________________ Justice B.Chandra Kumar 16th August, 2011 *BVS/Bvv [1] AIR 1923 Calcutta 524 [2] AIR 1923 Calcutta 63 [3] AIR 1914 Madras 303 [4] AIR 1976 MADRAS 194 (1) [5] AIR 1999 DELHI 377 [6] AIR 1988 SC 1470