Case: SIRI CHAND (DECEASED) THR. LRS Vs. SURINDER SINGH

was payable per mensem, condition of payment of annual rent was also mentioned there. The High Court noted the condition of the lease and has also applied the provisions of Section 17(1)(d) of the Registration Act, 1908 and held that the said lease was not registrable. In paragraph 1 of the judgment, the contents of the lease have been quoted, which are to the following effect: - ……………………The main provisions of the lease in question may be translated as follows: We, Nand Lal and Murli, sweepers of Hazro, have taken on rent a house from Mengh Baj of Hazro on condition of payment of an annual rent of Rs. 40-8-0 for a period of one year certain. We agree that we will live as tenants in this house and will pay rent at the rate of Rs. 3-6-0 per mensem, month by month on a receipt being granted to us by the landlord. In default of payment of rent the landlord can eject us and recover arrears of rent in any manner he likes. After the expiry of the term it will be the option of the landlord to give the house to us on rent or eject us and give it to other tenants. We will have no objection to this. The term of the lease is from the 1st Har, Sambat 1984 to the end of Jeth, Sambat 1985. We have been tenants under the landlord for a long time and have been paying rent. 18. After considering the conditions of the lease and referring to Section 17(1)(d), the High Court laid down following in paragraph 3: - 3. On a construction of the above deed it is obvious that it is not a lease from year to year, nor for a term exceeding one year, and the sole question is whether or not by it a yearly rent has been reserved which brings it within the letter of the Section. In Mt. Aishan v. Municipal Committee Lahore 92 Ind.Cas. 526 Campbell J. held that a mere recital of an annual rate of rent did not constitute the lease, a lease reserving a yearly rent within the meaning of Section 17, Registration Act. The lease in that case was determinable at any time at the will of the landlord. In the present case after the expiry of one year for which the lease was granted, this lease too was determinable at the end of Jeth, Sambat 1985. In this aspect the present lease constituted no more than a tenancy-at-will after the expiry of the first year and so appears to be covered by the decision of Campbell, J. referred to above. There is considerable body of authority for the proposition that where there is a tenancy-at-will created even though the rent is fixed and is payable annually, the document is not subject to compulsory registration. Reference in this connexion may be made to Muhammad Masam Khan v. Mt. Bakhtawar (1895) 70 P.R. 1895 where a Division Bench held on a construction of the document before them that only those leases must be registered which are in terms for a period exceeding one year, a lease reserving a yearly rent, and containing no other provision establishing a tenancy-at-will, being presumably a lease from year to year. 19. We may notice that in the above case although the annual rent was mentioned but, however, payment of monthly rent was mentioned in the lease deed. The rent note, which we are considering contains only monthly rent and payment month by month. As per law laid down by this Court in Ram Kumar Das(supra) there shall be a presumption that the tenancy in the present case is monthly tenancy. When the clauses of rent note are cumulatively read, the intention of the tenant is more than clear that tenancy was only monthly tenancy, which could have been terminated on default of payment of rent by 5 th day of any month or by notice of one month. The rent deed did not confer any right to tenant to continue in the tenancy for a period of more than one year nor it can be said that tenancy was created for a period of more than one year. Clause (9), which noticed the promise of the tenant of payment of rent by increasing 10% each year was a promise contingent on tenancy being continued beyond one year but cannot make the tenancy year to year or tenancy for a period of more than one year. Present was a case of tenancy for which no period was specified and looking to all the clauses cumulatively, we find that the rent note was not such kind of rent note, which requires compulsory registration under Section 17(1)(d). 20. We may further notice that Rent Controller had returned a finding regarding rate of rent @ Rs.2,000/- per month and further the tenant was liable to pay the house tax, which was not paid from 1999 to 2005 and the decree of eviction was passed accordingly. The Appellate Court although accepted the finding of the Rent Controller that rate of rent was @ Rs.2,000/- and not Rs.1,000/- but merely on the finding that landlord cannot claim 10% increase of rent every year since the document was not registered had allowed the appeal and set side the judgment. There is no specific finding by the Appellate Court regarding the liability of the tenant to pay the house tax. The Appellate Court after holding that document-rent deed was compulsorily registrable and having not registered allowed the appeal. No finding was returned by the Appellate Court that tenant was not in default and tenant has deposited the necessary amount to save himself from eviction. We, thus, are of the view that the judgment of the Appellate Court is unsustainable on the above ground also. We, thus, are of the view that the judgment and decree of the Rent Controller directing eviction ought not to have been interfered by the Appellate Court.

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

Explanation:
1[ds]9. We may notice that in the present case, the rent note is not claimed to be signed by the landlord- appellant rather it is signed only by the respondent- tenant. The trial court after considering materials on record has returned the findings that appellant has proved the rent note. The case of the respondent that appellant has got his signatures on a blank paper has not been accepted. RW1- Surinder Singh, respondent in his cross-examination has admitted his signatures on the rent note. The trial court also held that by virtue of clause (9) of the rent note, the respondent is liable to pay increased rate @10% every year and further he was liable to pay house tax. Landlord having paid the house tax, he was entitled to recover the house tax from the respondent.13. Clause (1) of the rent deed specifically makes it clear that monthly tenancy was created on payment of rent of Rs.2,000/- per month. The payment was to be made before 5 th of each month to the owner. The rent deed does not provide for any specific period for which the rent deed was executed.When a rent deed/lease deed does not provide for a period and when it provides for payment of rent monthly, whether tenancy can be treated from year to year or for any term exceeding one year or reserving a yearly rent?The rent deed does not reserve yearly rent, hence the third condition as noted above is not applicable. The rent deed is not also a lease of immovable property from year to year. There is no mention in the rent deed that it is a lease from year to year, hence the said condition is also not applicable.The present is a case where rent deed does not prescribe any period for which it is executed. When the lease deed does not mention the period of tenancy, other conditions of the lease/rent deed and intention of the parties has to be gathered to find out the true nature of the lease deed/rent deed. The two conditions written in the rent note are also relevant to notice. First, if payment of rent in any month is not made up to 5 th of month, owner shall have right to get the shop evicted and second if the owner is in need of shop, he by serving notice of one month can get the shop vacated. This Court had occasion to consider the provision of Section 106 of the Transfer of Property Act, 1882 and noted the rule of construction, which is to be applied when there is no period agreed upon between the parties in a lease deed. In Ram Kumar Das Vs. Jagdish Chandra Deo, Dhabal Deb and Another, AIR 1952 SC 23  after quoting Section 106 of the Transfer of Property Act, 1882, this Court held that when there is no period agreed upon between the parties, duration has to be determined by referring to the purpose and object with which the tenancy is created. Following observations were made: -13. The section lays down a rule of construction which is to be applied when there is no period agreed upon between the parties. In such cases the duration has to be determined by reference to the object or purpose for which the tenancy is created. The rule of construction embodied in this section applies not only to express leases of uncertain duration but also to leases implied by law which may be inferred from possession and acceptance of rent and other circumstances. It is conceded that in the case before us the tenancy was not for manufacturing or agricultural purposes. The object was to enable the lessee to build structures upon the land. In these circumstances, it could be regarded as a tenancy from month to month, unless there was a contract to the. This Court further held that it has no doubt been recognised in several cases that the mode in which a rent is expressed to be payable affords a presumption that the tenancy is of a character corresponding thereto. Consequently, when the rent reserved is an annual rent, the presumption would arise that the tenancy was an annual tenancy unless there is something to rebut the presumption.16. Clauses of the rent note makes it clear that there was a categorical promise that tenancy is a monthly tenancy and rent is paid every month by 5 th of every month. It is true that although in clause (9), it was mentioned that the tenant will be bound for making the rent money by increasing 10% each year, that was promise by the tenant to increase the rent by 10% each year for the period of tenancy, though the period of tenancy was unspecified. Clause (9) may or may not operate in view of specific clauses reserving right of landlord to evict the tenant on committing default of non-payment of rent by 5 th of every month or when landlord requires shop by giving one months notice. Clause (9) was a contingent clause which binds the tenant to increase the rent by 10% each year, which was contingent on tenancy to continue for more than a year, but that clause cannot be read to mean that the tenancy was for a period of more than one year.19. We may notice that in the above case although the annual rent was mentioned but, however, payment of monthly rent was mentioned in the lease deed. The rent note, which we are considering contains only monthly rent and payment month by month. As per law laid down by this Court in Ram Kumar Das(supra) there shall be a presumption that the tenancy in the present case is monthly tenancy. When the clauses of rent note are cumulatively read, the intention of the tenant is more than clear that tenancy was only monthly tenancy, which could have been terminated on default of payment of rent by 5 th day of any month or by notice of one month. The rent deed did not confer any right to tenant to continue in the tenancy for a period of more than one year nor it can be said that tenancy was created for a period of more than one year. Clause (9), which noticed the promise of the tenant of payment of rent by increasing 10% each year was a promise contingent on tenancy being continued beyond one year but cannot make the tenancy year to year or tenancy for a period of more than one year. Present was a case of tenancy for which no period was specified and looking to all the clauses cumulatively, we find that the rent note was not such kind of rent note, which requires compulsory registration under Section 17(1)(d)20. We may further notice that Rent Controller had returned a finding regarding rate of rent @ Rs.2,000/- per month and further the tenant was liable to pay the house tax, which was not paid from 1999 to 2005 and the decree of eviction was passed accordingly. The Appellate Court although accepted the finding of the Rent Controller that rate of rent was @ Rs.2,000/- and not Rs.1,000/- but merely on the finding that landlord cannot claim 10% increase of rent every year since the document was not registered had allowed the appeal and set side the judgment. There is no specific finding by the Appellate Court regarding the liability of the tenant to pay the house tax. The Appellate Court after holding that document-rent deed was compulsorily registrable and having not registered allowed the appeal. No finding was returned by the Appellate Court that tenant was not in default and tenant has deposited the necessary amount to save himself from eviction. We, thus, are of the view that the judgment of the Appellate Court is unsustainable on the above ground also. We, thus, are of the view that the judgment and decree of the Rent Controller directing eviction ought not to have been interfered by the Appellate Court.