Case: Badrilal Vs. Municipal Corporation Of Indore

offer and it was rejected by the only authority competent to accept it i.e. the Corporation on 31-5-1960.The correspondence carried on by the Commissioner with the appellant was wholly beyond his powers. 7. The offer made by the appellant in 1959 cannot have anything to do with the resolution passed by the Municipal Council in 1949. The offer was of a different set of terms and included an offer to pay the costs of the suit and that also had in fact been deposited by the appellant at the instance of the Commissioner.That indicates the new situation that had come into existence and establishes beyond doubt that this was a fresh offer. We therefore hold that no contract came into existence between the parties on 22-9-1959. 8. It was then urged by Mr. Gupte that the appellant having deposited the rent up to 31-3-1954 and the Municipal Commissioner having accepted it he should be deemed to be a tenant holding over. Leaving aside for the moment the contention put forward on behalf of the Corporation that this payment was made behind its back, it has to be noted that the payment was at the rate prevailing before 30-9-1949 and on that date the Corporation having passed a resolution specifying a new rate of rent of Rupees 9/- per Chasma the payment at the old rate by the appellant and its acceptance by the Municipal Commissioner was not an acceptance of rent as such and in clear recognition of the tenancy right of the appellant. It cannot amount to the Corporation consenting to the appellant continuing as a tenant by paying the old rates of rent. There is thus no question of the appellant being a tenant holding over. But a person who was lawfully in occupation does not become a trespasser, even if he does not become a tenant holding over but is a tenant by sufferance. The position at law was explained in Kai Khushroo Bazonjee Capadia v. Bai Jerbai Hirjibhoy Warden, 1949 FCR 262 at p. 270 = (AIR 1949 FC 124) as follows : On the determination of a lease, it is the duty of the lessee to deliver up possession of the dismissed 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 does not and there is neither assent nor dissent on his part to the continuance of occupation of such person, the latter becomes in the language of English law a tenant on sufference who has no lawful title to the land but holds it merely through the laches of the landlord. If now the landlord accepts rent from such person or otherwise expresses assent to the continuance of his possession, a new tenancy comes into existence as is contemplated by Section 116, Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month in accordance with the provisions of Section 116 of the Act. At page 272 it was pointed out : It can scarcely be disputed that the assent of the landlord which is founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays it. The same position was explained in a recent decision of this Court to which one of us was a party in Bhagwanji Lakhamshi v. Himatlal Jamnadas Dani, (1972) 1 SCC 388 = (AIR 1972 SC 819 ). At p. 391 it was observed : The act of holding over after the expiration of the term does not create a tenancy of any kind. If a tenant remains in possession after the determination of the lease, the common law rule is that he is a tenant on sufferance. A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent. The former (sic) (latter?) is a tenant at sufferance in English law and the latter (sic) (former?) a tenant holding over or a tenant at will. In view of the concluding words of Section 116 of the Transfer of Property Act, a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy. What the section contemplates is that on one side there should be an offer of taking a new lease evidenced by the lessee or sub-lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise. In (AIR 1949 FC 124) the Federal Court had occasion to consider the question of the nature of the tenancy created under Section 116 of the Transfer of Property Act and Mukherjea, J., speaking for the majority said that the tenancy which is created by the holding over of a lessee or under-lessee is a new tenancy in law even though many of the terms of the old lease might continue in it, by implication and that to bring a new tenancy into existence, there must be a bilateral act. It was further held that the assent of the landlord which is founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays it. 9. The appellant being merely a tenant by sufference there is no need for any notice before he could be evicted. Thus the judgment of the High Court is correct, in so far as it held the appellant was liable to be evicted.

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

Explanation:
0[ds]The same position was explained in a recent decision of this Court to which one of us was a party in Bhagwanji Lakhamshi v. Himatlal Jamnadas Dani, (1972) 1 SCC 388   = (AIR 1972 SC 819  ). At p. 391 it was observed :The act of holding over after the expiration of the term does not create a tenancy of any kind. If a tenant remains in possession after the determination of the lease, the common law rule is that he is a tenant on sufferance. A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent. The former (sic) (latter?) is a tenant at sufferance in English law and the latter (sic) (former?) a tenant holding over or a tenant at will. In view of the concluding words of Section 116 of the Transfer of Property Act, a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy. What the section contemplates is that on one side there should be an offer of taking a new lease evidenced by the lessee or sub-lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise. In (AIR 1949 FC 124) the Federal Court had occasion to consider the question of the nature of the tenancy created under Section 116 of the Transfer of Property Act and Mukherjea, J., speaking for the majority said that the tenancy which is created by the holding over of a lessee or under-lessee is a new tenancy in law even though many of the terms of the old lease might continue in it, by implication and that to bring a new tenancy into existence, there must be a bilateral act. It was further held that the assent of the landlord which is founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays it9. The appellant being merely a tenant by sufference there is no need for any notice before he could be evicted. Thus the judgment of the High Court is correct, in so far as it held the appellant was liable to be evicted.