Case: C. Mackertich Vs. Steuart &amp; Company, Limited

that business is continuing. In answer to question No. 247 the witness said that the company had agency to deal in Austin cars. It is true that in the registered lease deed Ex. L and L (1) there is the description of the lessee as coach-builder. But it is obvious that the defendant company cannot claim to be holding under the registered lease deed Ex. L and L (I) and so the purpose mentioned in the lease deed cannot be taken into consideration.In our opinion neither the evidence of Mr. J. N. Ghose nor the statement in Ex. W, Memorandum and Articles of Association, can be taken as sufficient evidence to prove that the purpose of the lease was exclusively or even dominantly for a manufacturing purpose. It follows, therefore, that the High Court was in error in holding that the dominant purpose of the lease was manufacture and so 15 days notice ending with the month of each tenancy must be held to be insufficient. 4. The High Court expressed the view that the test for applying the presumption of Section 106 of the Transfer of Property Act is to ascertain what was the dominant purpose of the lease and not whether the lease was exclusively for manufacturing purpose. Section 106 of the Transfer of Property Act states: 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 immoveable 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 days notice expiring with the end of a month of the tenancy. Every notice under this section 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. 5. Counsel on behalf of the appellant referred to the decision of the Court of Appeal in Howkins v. Jirdine, 1951-1 KB 614. In that case the landlord granted to the tenant a tenancy from year to year, terminable within six months, of seven acres of land and three cottages on the land. The lease contained provisions usual in a lease of an agricultural holding. The tenant, who farmed other land in addition to the seven acres, sub-let the three cottages to persons who were not engaged in agriculture. After the death of the landlord his executors served on the tenant twelve months notice to quit the cottages and land under Section 23, sub-section (1) of the Agricultural Holdings Act, 1948. The tenant thereupon served a counter notice under Section 24, sub-section (1) of the Act. The Minister of Agriculture having given his assent to the notice to quit, the tenant appealed to the Agricultural Land Tribunal, who allowed his appeal, holding that the notice to quit was inoperative. Proceedings were then brought in the county court by the executors as landlords, and they were granted by the county court judge a declaration that they were entitled to possession of the cottages and to mesne profits on the ground that the decision of the tribunal rendered the notice to quit invalid so far as it related to the land as distinct from cottages. In this state of facts, it was decided by the Court of Appeal that Section 1 of the Act of 1948 which defined Agricultural holding as meaning the aggregate of the agricultural land comprised in a contract of tenancy did not effect a severance of agricultural land and non-agricultural land, and as the lease in question was in substance a lease of an agricultural holding, therefore, the whole of the subject-matter of the contract of tenancy came within the protection of the Act and the appeal of the tenant was accordingly allowed. It was submitted on behalf of the respondents that a similar principle must be applied in construing Section 106 of the Transfer of Property Act and if the purpose of the lease was mainly or in substance a manufacturing purpose, a presumption of yearly tenancy will arise and that it was incumbent upon the landlord to give a notice expiring with the end of the year of tenancy if the lease was to be validly determined. The opposite point of view is put forward on behalf of the appellant. It was argued that the test was exclusiveness of manufacturing purpose for applying the presumption under Section 106 of the Transfer of Property Act. Reliance was placed upon the decision of the Calcutta High Court in Ramesh Chandra v. Surya Properties, AIR 1957 Cal 198 and Sati Prasanna v. Md. Fazel, AIR 1952 Cal 320.But we do not propose in this case to express our concluded opinion regarding Section 106 of the Transfer of Property Act. We shall proceed on the assumption that the argument of the respondent is correct and that the test applicable under Section 106 of the Transfer of Property Act is not exclusiveness of purpose but what is the main or substantial purpose of the lease. As we have already shown there is no proper material on the record of the case from which it can be inferred that the dominant purpose of the lease was manufacture or that the respondent substantially used the premises for manufacturing purposes. It follows, therefore that the trial court was right in holding that the tenancy was monthly and notices Exs. I and I-A were legally valid for termination of the tenancy.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]3. In support of these appeals it was submitted on behalf of the appellant that the High Court was in error in holding that the tenancy was for manufacturing purpose and that six months notice terminable with a year of tenancy was required.It was said that the onus of proving that the tenancy was for manufacturing purpose was upon the defendant and as that point was not raised in the written statement the High Court should not have allowed the respondent to raise then our opinion there is substance in this argument. But we shall assume in favour of the respondent that such an objection could have taken by it even without a specific plea in the written statement. Even upon that assumption we are of opinion that there is no evidence in the case to support the finding of the High Court that the purpose of the lease was dominantly for manufacturing purposeThe opposite point of view is put forward on behalf of the appellant. It was argued that the test was exclusiveness of manufacturing purpose for applying the presumption under Section 106 of the Transfer of Property Act. Reliance was placed upon the decision of the Calcutta High Court in Ramesh Chandra v. Surya Properties, AIR 1957 Cal 198   and Sati Prasanna v. Md. Fazel, AIR 1952 Calt we do not propose in this case to express our concluded opinion regarding Section 106 of the Transfer of Property Act. We shall proceed on the assumption that the argument of the respondent is correct and that the test applicable under Section 106 of the Transfer of Property Act is not exclusiveness of purpose but what is the main or substantial purpose of the lease. As we have already shown there is no proper material on the record of the case from which it can be inferred that the dominant purpose of the lease was manufacture or that the respondent substantially used the premises for manufacturing purposes. It follows, therefore that the trial court was right in holding that the tenancy was monthly and notices Exs. I andA were legally valid for termination of the tenancy.