Case: Naveen Chand  Vs. Nagarjuna Travels And Hotels Pvt. Ltd

decree of eviction.10. Per contra, Shri P.P. Rao, learned senior counsel for the respondent, contended that the renewal clause in the lease deed is vague and unspecific and, therefore, not binding on the parties. According to Shri Rao, the Courts below rightly did not enforce the renewal clause and rightly decreed the suit for eviction of the lessees. Shri Rao contended that though it is stated in the lease deed that the period of lease shall be 25 years in the first instance with the right of renewal as hereinafter as set out. Nothing is set out in the document regarding the conditions on which the renewal will be given effect to; even the rate of rent and the period of renewal are not specified. In the circumstances, Shri Rao submitted, the renewal clause cannot be given effect to. 11. In view of rival contentions raised by the learned counsel for the parties the question that arises for consideration is whether the covenant for renewal of the lease was valid and enforceable? If the question is answered in the affirmative then the suit is liable to be dismissed; if on the other hand the question is answered in the negative then the suit is to be decreed. 12. Since determination of the question formulated turns mostly on the interpretation of the relevant clause in the lease deed, it will be convenient to quote the clause in extenso; "1. In pursuance of the said arrangement and in consideration of the rent hereby reserved the Lessor hereby grants and demises by way of Lease the portions of the premises described in the schedule attached hereto and delineated in the plan attached hereto for a period of 25 years in the first instance with the right of renewal as hereinafter set out. The initial period of the Lease shall commence from 1-8-1970.The Lessee shall pay the rent at the rate of Rs.650/- per months for the first 5 years and Rs.850/- per month for the subsequent period of 5 years; Rs.1,050/- per month for the third period of 5 years and Rs.1,300/- per month for the remaining period of 10 years. The aforesaid rent and the aforesaid rates shall be paid by the Lessee on or before the 10th of every succeeding month at the office or at the premises of the Lessor or on such other place as the Lessor may appoint on hi behalf from time to time." From the above noted covenant in the lease deed it is clear that the lease was granted for a period of 25 years in the first instance with the right of renewal as hereinafter set out Though the right or renewal is mentioned in the clause there is no mention about the terms and conditions of renewal either in the clause quoted above or elsewhere in the document. On a fair reading of the documents it appears that the right of renewal stated therein is shrouded in uncertainty and vagueness. The renewal clause in a lease deed is an important term of the agreement. Ordinarily the Court should be reluctant to ignore such a term of the lease, unless on a fair reading and reasonable construction no meaning can be attached to it. Since the renewal clause is not clear and specific regarding the terms of renewal the Court is to ascertain the intention of the parties for the materials on record. As noted earlier, the lease deed read as a whole, does not indicate the manner in which the right of renewal is to be exercised by the parties and the terms and conditions of such renewal. It is not even stated in the document that the renewal will be subject to terms and conditions to be decided by the parties by mutual discussion or according to any other procedure. There is no indication whether such discussion will at all be held or not. Renewal being an important condition of lease, could not have been dealt with in such careless and slip-shot manner and would not have been left in such vague and uncertain condition if the parties were serious about the renewal of the lease. On appreciation of the evidence the Courts below having not believed the case of the defendants that some verbal requests for renewal of the lease were made by them to the plaintiff after expiry of the period of lease, the Courts have found that no attempt as made by the lessees to suggest the terms and conditions for renewal of the lease particularly the rent to be paid by them except offering the rent for two months at the old rate. In such circumstances, if the Courts below have found that the lessees had no enforceable right of renewal under the document and indeed had not taken any step for execution by any document on renewal of the lease, no exception can be taken to such findings. No fixed principle or straight-jacket formula can be laid down regarding the question whether the condition of renewal in the lease which is vague and uncertain should be enforced. The question is the be judged on the facts and circumstances of each case. In the case in hand, the lease is in respect of premises which was situated in a busy commercial centre of the city of Hyderabad and lease of the property had been taken and was being used for commercial purposes. In such a case it is difficult to accept that the parties had intended that the lessees can unilaterally exercise the right of renewal without the terms and conditions of renewal being settled between the parties. At the cost of repetition it may be stated here that the lessees (appellants herein) had made no attempt to get the terms and conditions of renewal of the lease fixed by mutual discussions with the lessor-respondent herein. So far as the lessor is concerned it had made its intention clear by sending the notice of termination of the lease.

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

Explanation:
0[ds]From the above noted covenant in the lease deed it is clear that the lease was granted for a period of 25 years in the first instance with the right of renewal as hereinafter set out Though the right or renewal is mentioned in the clause there is no mention about the terms and conditions of renewal either in the clause quoted above or elsewhere in the document. On a fair reading of the documents it appears that the right of renewal stated therein is shrouded in uncertainty and vagueness. The renewal clause in a lease deed is an important term of the agreement. Ordinarily the Court should be reluctant to ignore such a term of the lease, unless on a fair reading and reasonable construction no meaning can be attached to it. Since the renewal clause is not clear and specific regarding the terms of renewal the Court is to ascertain the intention of the parties for the materials on record. As noted earlier, the lease deed read as a whole, does not indicate the manner in which the right of renewal is to be exercised by the parties and the terms and conditions of such renewal. It is not even stated in the document that the renewal will be subject to terms and conditions to be decided by the parties by mutual discussion or according to any other procedure. There is no indication whether such discussion will at all be held or not. Renewal being an important condition of lease, could not have been dealt with in such careless andmanner and would not have been left in such vague and uncertain condition if the parties were serious about the renewal of the lease. On appreciation of the evidence the Courts below having not believed the case of the defendants that some verbal requests for renewal of the lease were made by them to the plaintiff after expiry of the period of lease, the Courts have found that no attempt as made by the lessees to suggest the terms and conditions for renewal of the lease particularly the rent to be paid by them except offering the rent for two months at the old rate. In such circumstances, if the Courts below have found that the lessees had no enforceable right of renewal under the document and indeed had not taken any step for execution by any document on renewal of the lease, no exception can be taken to such findings. No fixed principle orformula can be laid down regarding the question whether the condition of renewal in the lease which is vague and uncertain should be enforced. The question is the be judged on the facts and circumstances of each case. In the case in hand, the lease is in respect of premises which was situated in a busy commercial centre of the city of Hyderabad and lease of the property had been taken and was being used for commercial purposes. In such a case it is difficult to accept that the parties had intended that the lessees can unilaterally exercise the right of renewal without the terms and conditions of renewal being settled between the parties. At the cost of repetition it may be stated here that the lessees (appellants herein) had made no attempt to get the terms and conditions of renewal of the lease fixed by mutual discussions with theherein. So far as the lessor is concerned it had made its intention clear by sending the notice of termination of the lease.