IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.08.2011 CORAM THE HONOURABLE MRS.JUSTICE R.BANUMATHI AND THE HONOURABLE MR.JUSTICE V.PERIYA KARUPPIAH O.S.A.No.77 of 2011 1. Hotel Chinnass represented by its Partner P.M. Balasubramaniam, P.M. Venkateswaran, 77, Bazullah road, T.Nagar, Chennai – 600 017. 2. P.M.Balasubramaniam, No.20, Padmavathiar Road, Jeypore Nagar, Gopalapuram, Chennai – 600 086. 3. P.M. Venkateswaran, No.20, Padmavathiar Road, Jeypore Nagar, Gopalapuram, Chennai – 600 086. ..Appellants/Defendants 1 to 3 Vs. 1. Tamilnadu Kalvi Kappu Arakkattalai registered Trust represented by its Managing Trustee, 77, (New No.32), Bazullah Road, T.Nagar, Chennai – 600 017. 2. Hotel Aboorva Sangeetha, represented by its Managing Partner P.H.Padmanabhan, 77, Bazullah Road, T.Nagar, Chennai – 600 017. ..Respondents/Plaintiff/ 4th Defendant Appeal filed under Clause 15 of the Letter Patent against the order of the learned single Judge made in C.S.No.341 of 2003 dated 28.09.2010. https://hcservices.ecourts.gov.in/hcservices/ For Appellants : Mr.M.Vaidhyanathan For Respondents : Mr.M.Sriram along with Ms.Suganyadevi Duraisamy for R1. J U D G M E N T (The judgment of the Court was delivered by V.PERIYA KARUPPIAH.,J) This appeal is directed against the judgment and decree passed by the learned single Judge made in C.S.No.341 of 2003 dated 28.09.2010 2. The brief facts of the case of the plaintiff/first respondent are as follows: The plaintiff is a Trust which was registered in the year 1976. The object of the Trust is to offer relief to the poor by way of education and medical relief and to establish and maintain educational institutions and workshops for imparting general, technical professional, industrial and other means of education and training and to establish hostels, choulteries, rest homes, orphanages, homes for the benefit of poor and destitute and others. The Trust has been exempted from payment of Income Tax under Section 80-G vide letter No.DIT(E)No.212(137)176 dated 28.06.2002. The property bearing Door No.77(New No.32) Bazullah Road, Theagaraya Nagar, Chennai-17 is one of the immovable properties owned by the Plaintiff Trust. So far as the registered office of the Trust is concerned, the same is situate at a portion in No. 77(New No.32) Bazullah Road, Theagaraya Nagar, Chennai-17. The third defendant approached the plaintiff for taking lease of the property situate at No.77(New No.32) Bazullah Road, Theagaraya Nagar, Chennai-17, for the purpose of conducting business of lodging house. The Trust Board authorised the Joint Managing Trustee to enter into a lease deed with the third defendant. The lease deed dated 2.2.1999 was entered into between the plaintiff and the third defendant and it was registered as Document No.180/99 on the file of Sub-Registrar Office, T.Nagar, Chennai. The said lease was for a period of three years commencing from 1.9.1998 and the period of renewal for a period of three years was subject to the condition that the tenant pays enhancement of 20% of the rent payable on 30th September, 2001. The third defendant paid a sum of Rs.10 lakhs towards security deposit which is refundable at the time of handing over vacant possession of the suit property. Thereafter, the second defendant was inducted and the first defendant partnership firm was constituted and the same was intimated to the plaintiff vide letter dated 20.12.2000. It was specifically admitted that the lease deed was binding on the first and second defendants also. As per clause 20 of the lease deed, the defendants had agreed the right of the plaintiff to terminate the lease if the lessee, https://hcservices.ecourts.gov.in/hcservices/ commits default in payment of rent consecutively for a period of two months. As per the lease deed, from 1.10.2001, the rent payable by the defendants 1 to 3 is Rs.1,45,530/- per month but the defendants 1 to 3 have not paid the said quantum of rent and committed breach of terms as stipulated in clause 20 of the lease agreement. By letter dated 18.9.2011, the plaintiff informed the 3rd defendant intimating about the quantum of rent with effect from 10.10.2001 and also payment of electricity deposit. By letter dated 10.11.2001, the defendants 1 to 3 have admitted that the rents for the month of July, August and September 2001 were not paid and only in November 2001, the rent has been paid and they have not paid the rent for the month of October 2001. Thereafter, lesser amount of rent was paid on 13.11.2001 and 16.11.2001 for the month of July, August, September, 2001 and the correct quantum of rent was not paid. The defendants requested not to increase the quantum of rent as they were facing financial constraints. By letter dated 14.6.2002, the defendants sent a sum of Rs.5,39,375/- representing the arrears of rent from January to May, 2002 and the said amount was calculated at the rate of Rs.1,21,275/- which was not the rent agreed by the plaintiff. Further, the defendant has deducted a sum of Rs.67,000/- said to have been paid towards electricity deposit. The defendants 1 to 3 have committed breach of the terms of agreement by belated payment of amount. The defendants 1 to 3 sublet the ground floor portion to the 4th defendant Hotel Aboorva Sangeetha from December 1998. There is no landlord tenant relationship between the plaintiff and the 4th defendant and the 4th defendant did not pay any rents to the plaintiffs and any decision rendered in the suit will be binding on the 4th defendant. The plaintiff sent lawyer's notice dated 22.6.2002 terminating the tenancy with effect from 31.7.2002 and that the defendant is liable to pay a sum of Rs.8,42,300/-. The suit is filed for recovery of arrears of rent and to recover of possession of the suit property. The plaintiff is entitled to claim damages for use and occupation from the defendants 1 to 3 at the rate of Rs.2.5 lakhs per month with effect from 01.08.2002. Since the tenancy is terminated with effect from 1.7.2002, the amount paid by the defendants 1 to 3 are being adjusted towards the damages for use and occupation as part payment. The plaintiff came to understand that the defendants 1 to 3 are trying to induct the third parties as tenants and to sublet the premises. If the defendants do so, the plaintiff will be put to great hardship. The defendants 1 and 2 made several additional constructions in the setback areas. The defendants put up construction even after 1999 and till October 2001 and it was found that they have committed violation and the demand raised by C.M.D.A., comes to Rs.3,19,000/-. It was accepted by the defendant that as and when demand is raised by the C.M.D.A., he will make the payment. By letter dated 4.6.2002, C.M.D.A. made a demand of Rs.7,30,500/- being the regularisation fee. The plaintiff wrote a letter dated 19.6.2002 to the defendants to make the payment. The defendants have not chosen to make the payment. As the last date of payment was on 30.6.2002, the plaintiff paid the regularisation fees https://hcservices.ecourts.gov.in/hcservices/ on 26.6.2002 and other charges and hence, the defendants are liable to pay their share of regularisation fee which was admitted at Rs.3,19,000/- and the same was also claimed by the plaintiff in his lawyer's notice dated 22.6.2002. Hence, the plaintiff therefore, prayed for recovery of possession, recovery of arrears of rent, regularisation fee and for other reliefs. 3. The averments in the written statement filed defendants 1, 2 and 3 are as follows: The defendants deny all the averments in the plaint except that are specifically admitted herein. It is stated that at the request of the first defendant, the rent was reduced from Rs.1,45,530/- to Rs.1,40,000/-. Subsequently, at the request of the defendants, the senior members of the Trust permitted the defendants to pay rents at the rate of Rs.1,30,000/- per month and the said sum is being paid without default. The contention that there was breach of the terms of the lease is incorrect. The senior members of the Trust had agreed for the reduced rent of Rs.1,30,000/- and hence, after making appropriate and permissible deductions, a sum of Rs.1,21,275/- was paid. The deduction towards electricity deposit was agreed and there was no belated payment or breach of the terms of the lease. The 4th defendant is not a sub-tenant but merely a licensee, catering to the requirements of the occupants of the rooms of the hotel situated in the demised premises. The defendants are not liable to pay any damages for use and occupation and the quantum claimed viz., Rs.2,50,000/- is highly imaginary. It was submit that no construction has been put up by the defendants which is illegal. In respect of certain areas for which regularisation fee has been demanded by the C.M.D.A., the defendants have offered to pay their share, since a portion of the deviated area is in the occupation of the defendants. Till date, the plaintiff has not apportioned the regularization fee with the sole object of claiming the entire amount from the defendants. The defendants are not liable to pay a sum of Rs.3,19,000/- as demanded by the plaintiff. There was no valid termination of the lease and no breach has been committed by them. The amounts claimed by the plaintiff in the suit are imaginary and the claim for possession is illegal and hence, the suit has to be dismissed. 4. The learned single Judge had framed nine issues which are as follows: 1) Whether there was breach of terms of condition of the lease deed dated 02.02.1999 by the defendants 1 and 2? 2) Whether the notice of termination issued by the plaintiff is valid? 3) Whether the defendants 1 to 3 have put up any construction or alternation without the consent of the plaintiff? https://hcservices.ecourts.gov.in/hcservices/ 4) Whether the defendants 1 to 3 are liable to pay a sum of Rs.8,42,300/-as arrears of rent with interest thereon ? 5) Whether the defendants 1 to 3 are liable to pay Rs.2,50,000/- per month towards the damages for use and occupation with effect from 01.11.2002? 6) Whether the defendants 1 to 3 are liable to pay Rs.3,41,333/- towards their share of regularisation charges with interest? 7) Whether the plaintiff is entitled to the relief of injunction restraining the defendants from subletting the property? 8) Whether the defendants 1 to 3 have sublet the suit premises to the fourth defendant in violation of the terms of the contract? 9) What other relief the parties are entitled to? 5. The learned single Judge had examined P.W.1 and P.W.2 and had admitted Exs.P1 to P28 on the side of the plaintiff and examined D.W.1 on the side of the defendants. The learned single Judge had appraised the evidence addressed in the suit and had come to the conclusion of decreeing the suit for ejectment and ordered a sum of Rs.1,45,530/- i.e., the lastly paid monthly rent towards future damages along with 20% enhancement. The learned single Judge had also directed to pay 50% of the sum of Rs.6,21,180/-, the money paid by the plaintiff to the C.M.D.A. and in other respects , the claim of the plaintiff was not allowed and granted two months time for vacating the premises which includes a direction to the sub-lessee, Hotel Aboorva Sangeetha also. 6. Against the judgment and decree passed by the learned single Judge, the defendants 1 to 3 had preferred this appeal. Even though several claims of the plaintiffs have not been allowed by the learned single Judge, the plaintiffs did not prefer any separate appeal nor any cross objection, in this appeal. 7. Heard, Mr.M.Vaidhyanathan, learned counsel counsel for the appellants and Mr.M.Sriram, learned counsel for the first respondent. 8. Learned counsel for the appellants/defendants would submit in his argument that the learned single Judge was not correct in coming to the conclusion that the notice to quit issued by the plaintiff was in order and to consequently direct the defendants/appellants to vacate the suit property. He would further submit that the notice to quit issued in Ex.P16 was not proper and the suit which rested upon the said notice, is not sustainable. He would also submit in his argument that the learned single Judge having found the issues against the plaintiff failed to find that no https://hcservices.ecourts.gov.in/hcservices/ amounts was due either towards arrears of rent or towards the damages payable in respect of the said property. He would further submit in his argument that the learned single Judge was not correct in saying that the appellants/defendants are liable to pay a sum of Rs.3,41,333/- towards their share for regularisation fees being the 50% of the total amount said to have been paid by the plaintiffs. 9. Learned counsel would further submit that Hotel Aboorva Sangeetha was only a licensee housed for facilitating the workers and the guests of the defendants, for dining and the said Hotel Aboorva Sangeetha does not have its equipments permanently in the said premises. He would also submit that there was no sub-letting done by the appellants and the said Hotel Aboorva Sangeetha was only a licensee. He would further submit in his argument that according to Clause 20 of the agreement, notice to quit could be issued during the period of tenancy when there was default in payment of rent for two consecutive months and as per Clause 21, six months advance notice is necessary in writing before terminating the lease, whereas the notice in Ex.P16 gives only 15 days time to vacate the premises by the end of 31.07.2002, which is contrary to the agreement. He would further submit that the provisions of Section 106 of Transfer of Property Act coupled with Clause 21 of the Lease Agreement would go to show that there was no valid termination of lease. Learned counsel would further submit in his argument that the evidence produced by both parties would disclose that the plaintiffs conceded for modifying and altering the premises for accommodating Hotel Aboorva Sangeetha and therefore, the defendants cannot be found fault that they have sublet the premises as stated by the plaintiffs in the suit. He has also submitted in his arguments that there was no arrears of rent payable during the period of tenancy and there was no necessity of issuing a notice to quit as contemplated in the agreement. He would further submit that the appellants/defendants are doing lodging business and they have to overcome various difficulties arising out of different circumstances and still the defendants were paying the rent payable to the premises promptly and therefore, there was no question of any termination of tenancy nor any payment of damages payable in respect of the premises. He would further submit that the alleged damages fixed at 20% more than the last rent at Rs.1,45,530/- is not sustainable. He would further submit in his argument that the regularisation fee shall normally be borne by the owner of the building and therefore, the decree passed against the defendants to share 50% of the regularisation fee is liable to be set aside. He would therefore, request the Court to set aside the judgment and decree passed by the learned single Judge ordering ejectment of the appellants from the suit property and issuing directions to pay the damages at Rs.1,45,530/- + 25% per month and also to pay 50% of the regularisation fee of Rs.6,21,180/- and the suit filed by the plaintiffs before the learned single Judge may be dismissed. https://hcservices.ecourts.gov.in/hcservices/ 10. Learned counsel appearing for the first respondent/plaintiff would submit in his arguments that the notice to quit issued by the plaintiff in Ex.P16 is valid in law and even otherwise the stipulation contained in Clause 21 of the agreement is read with section 106 of Transfer of Property Act, the plaintiff had filed the suit after the lapse of six months as contained in Clause 21 of the said agreement. He would further submit that the registered lease deed entered into between the parties on 2.2.1999 was in force for a period of three years ending with 30.09.2001 and thereafter, it was continued as per the clauses in the said lease agreement for the extended period of 3 years at the rate of Rs.1,45,530/- per month and therefore, the same terms and conditions would apply to the extended lease and it would be over by the end of 30.09.2004. He would further submit that however, the first defendant had violated the terms and conditions by sub-letting the premises to Hotel Aboorva Sangeetha without the written consent of the plaintiff and he had also altered the premises and made the plaintiff to pay a sum of Rs.6,21,180/- and they were compelled to pay the same and therefore, the defendants are liable to be evicted on the ground of sub-letting and unauthorised construction in the building belonging to the plaintiff. He would further submit that the notice to quit issued by the plaintiff in Ex.P16 is quite reasonable and the defendants are liable to vacate the premises at the end of 6th month from the date of notice to quit and on that aspect, the finding of the learned single Judge, is not assailable. He would further submit in his argument that the defendants are liable to pay a sum of Rs.1,45,530/- towards monthly rent on and from 01.10.2001 as per the lease agreement and owning to the difficulty expressed by the defendants, the Trust Board had considered and asked them to pay a sum of Rs.1,40,000/- as monthly rent for two months and the defendants did not avail the said concession given by the plaintiff but they defaulted to pay the monthly rent consecutively for more than two months and therefore, the notice to quit was sent as per Clause 20 of the agreement. He would also bring it to the notice of the Court that sub-letting of the premises was prohibited as per Clause 17 of the lease agreement and the defendant/ lessee was also prohibited from putting up any constructions or additions in the property without the written consent of the plaintiff but the defendants 1 to 3 had inducted Hotel Aboorva Sangeetha as sub-tenant by unauthorisedly constructing and modifying a portion of the premises. Therefore, on that ground also, the notice to quit issued by the plaintiffs in Ex.P16 is a valid one. He would therefore, submit to the Court that the order of ejectment passed by the learned single Judge is correct and it may be confirmed. 11. He would further submit in his argument that even after the filing of the suit, the extended period of three years was over by the end of 30.09.2004 and the defendants are deemed to be the trespassers after the lapse of the said lease period by efflux of https://hcservices.ecourts.gov.in/hcservices/ time and the Court can take note of the said subsequent events and mould the relief in accordance with the circumstances of the case. He would therefore, request the Court that the judgement and decree passed by the learned single Judge need not be interfered with and thus, the appeal may be dismissed. 12. We have given anxious consideration to the arguments advanced on either side. 13. On consideration of the arguments, and on perusal of the case records, evidence, grounds of appeal and other related papers, we could see the following points emerge for consideration in the appeal. i) Whether the notice to quit issued under Ex.P16 is valid in law? ii) Whether the plaintiff is entitled for the relief of ejectment of the defendants from the demised premises? iii) Whether the finding of the learned single Judge directing the defendant to pay the plaintiff 50% of the regularisation charges, i.e., Rs.3,10,590/- is correct? iv) Whether the finding of the learned single Judge in directing the defendants to pay a sum of Rs.1,45,530/- + 20 % of the same, per month as damages towards future damages is correct? v) Whether the judgment and decree passed by the learned single Judge are liable to be interfered and set aside? vi) Is the appeal allowable? 14. Point Nos.1 and 2: For convenience sake, the rank of the parties in the suit is maintained in this judgment. The indisputable facts are that the plaintiff is the owner of the property in which the first defendant was inducted as a lessee in respect of ground floor and first floor of the property at Door No.77, Bazullah Road, T.Nagar, Chennai-17 for the conduct of lodging business through a registered lease deed dated 02.02.1999. The said registered lease deed was produced as Ex.P3. No doubt, it is true that both the plaintiff and the defendants are governed and bound by the terms and conditions of lease entered into between them in Ex.P3. The lease period as agreed in between the parties was for a period of 3 years commencing from 1.9.1998 to 30.09.2001. Various quantum of rents have been fixed for various period till 30.09.2001. The lease period fixed in the registered lease agreement was over and therefore, the following stipulation in the lease deed would come into operation for the further period of 3 years commencing from 01.10.2001 to 30.09.2004. The relevant provision would run as follows: https://hcservices.ecourts.gov.in/hcservices/ "From 01.10.2001 the rent will be Rs.1,45,530/- (Rupees One Lakh Forty five Thousand Five Hundred and Thirty only) per month for the extended period of 3 years." The parties have agreed to continue the tenancy as per the said Clause and there is no dispute that they have also exchanged correspondence regarding the reduction of rent for two months and thereafter, to switch over to the agreed rent as per the lease agreement. The contentions of the defendants was that the notice to quit sent in Ex.P16 is not valid in law. There is no dispute that the notice to quit as sent by the plaintiff in Ex.P16 should be in terms of the said agreement and also in accordance with provision of Section 106 of Transfer of Property Act. The ingredients of Section 106 of Transfer of Property Act would run as follows: "106. Duration of certain leases in absence of written contract or local usage – (1) 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; 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 lessee, by fifteen day's notice. (2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section(1) shall commence from the date of receipt of notice. (3) A notice under sub-section 91) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section. (4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party,or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.)" 15. From the above, we could understand that the ingredients of the said section would apply if there is no contract to the contrary. Therefore, the agreement reached in between the parties should be read along with the provisions of Section 106 of Transfer of Property Act. According to Clause 21 of the agreement, the time stipulated for terminating the lease shall be six months in writing. Ex.P16 was issued on 22.06.2002 terminating the tenancy by the end of https://hcservices.ecourts.gov.in/hcservices/ the tenancy month, July 2002 i.e., 31.07.2002. Therefore, it is clear that the tenancy was not terminated by giving six months time as per Clause 21 of the lease agreement. The contention of the learned counsel