Case: State Of U.P Vs. Zahoor Ahmad &amp; Anr

3. The appellant is the proprietor of the reserved forest in Uttar Pradesh. The respondent took lease from the appellant of a plot of land at Chandan Chowki, Sonaripur Range in the North Kheri Forest Division at an annual rent of Rs. 1,000/-.4. The High Court found these facts. The appellant had granted a lease to the respondent for one year from 18 March, 1947 at an annual rent of Rs. 100/-. The lease was renewed the following year on 10 June, 1948 with effect from 18 March, 1948 for one year. The lease was renewed again in 1949 for one year. The lease expired on 18 March, 1950. After the termination of the lease in March, 1949 the respondent continued to be in possession of the land and agreed to abide by the terms to be fixed by the appellant. Under the terms fixed by the appellant the respondent was required to pay Rs. 1,000/as annual rent for the occupation of the land till 15 July, 1950.5. The respondent remained in possession of the leased properly after the determination of the lease on 15 July, 1950. The appellant allowed the respondent to be in occupation for three years beyond 15 July, 1950. The respondent did not agree to give any undertaking after 15 July, 1950 as in the year 1949 to agree to abide by the decision of the Government. The appellant was on the one hand anxious to charge as high rent as possible and the respondent on the other was willing to pay reasonable rent On 27 August, 1951 the Forest Officer of the appellant wrote to the respondent for discussion regarding the rent for the year 1950-51. There is no evidence as to whether there was any such discussion. There is however a letter of the appellant dated 4 December, 1951 to the respondent where the respondent was asked to pay Rs. 3000/for the year 1950-51 and if the respondent did not agree to pay the amount the rent would be reduced to Rupees 1800/- but the mill would not be allowed to have the lease in future in any circumstance. The respondent was allowed to continue in occupation of the land without any agreement as to the amount of rent payable for the year 1950-51. On 29 October, 1952 the Conservator of Forests on part of the appellant sent a notice to the respondent that the appellant offered to allow the respondent to run the mill beyond 15 July, 1950 for three years provided the respondent paid Rs. 3000/per annum and for one year only in case the respondent was prepared to pay Rs. 1800/- with the further condition that the lease would not be renewed. The notice further stated that since the respondent had not executed any lease incorporating the terms the respondent was a mere licensee The respondent was asked to remove the plant within one month of the date of receipt of the notice and to pay Rupees 6000/- as damages for use and occupation. If the respondent did not do so the appellant gave notice of filing a suit for recovery of damages at the rate of Rs. 5000/- per annum for future use and occupation.6. On the facts found by the High Court, the High Court concluded that the respondent continued in occupation with the consent of the appellant without any agreement as to the amount of rent or without any undertaking that the respondent would pay the rent fixed by the appellant. The appellant, therefore, after the determination of the lease on 15 July, 1950 assented to the respondent continuing in possession. -The lease was for industrial purposes. Under the terms of Section 106 of the Transfer of Property Act such lease is from year to year. Therefore, there being no agreement to the contrary the continuance by the respondent in possession of the leased premises amounted to renewal of the lease from 16 July, 1950 as a lease from year to year. It would be a lease terminable by six months notice expiring with the end of the year of the tenancy. There was no such notice expiring with the end of a year of tenancy in 1952. The renewed tenancy therefore continued and was not terminated.

Reasoning:
7. With regard to the amount of rent payable the provisions of Section 116 of the Transfer of Property Act indicate that the renewal of the lease would mean that the terms and conditions would be the same as of the previous lease. The High Court, therefore, correctly found that in the absence of any agreement to pay Rs. 3000/- as annual rent or in the absence of any agreement and undertaking that the respondent would accept the amount fixed by the appellant- as the rent, the appellant was not entitled to anything more than Rupees 1000/- a year which was the amount of rent for the year 1949 to 1950.The lease in die present case was for the purpose of erecting a temporary rice mill and for no other purpose. The mere fact that the State is the lessor will not by it a Government grant within the meaning of the Government Grants Act. There is no evidence in the present case in the character of the land or in the making of the lease or in the content of the lease to support the plea on behalf of the State that it was a grant within the meaning of the Government Grantsthe present case the High Court correctly found on the facts that the respondent after the determination of the leave held over. Even if the Government Grants Act applied Section 116 of the Transfer of Property Act was not rendered inapplicable. The effect of Section 2 of the Government Grants Act is that in the construction of an instrument governed by the Government Grants Act the court shall construe such grant irrespective of the provisions of the Transfer of Property Act. It does not mean that all the provisions of the Transfer of Property Act are inapplicable. To illustrate, in the case of a grant under the Government Grants Act Section 14 of the Transfer of Property Act will not apply because Sec-tion 14 which provides what is known as the rule against perpetuity will not apply by reason of the provisions in the Government Grants Act The grant shall be construed to take effect as if the Transfer of Property Act does not apply.16. Section 3 of the Government Grants Act declares the unfettered discretion of the Government to impose such conditions and limitations as it thinks fit, no matter what the general law of the land be. The meaning of Sections and. 3 of the Governments Grants Act is that the scope of that Act is not limited to affecting the provisions of the Transfer of Property Act only. The Government has unfettered discretion to impose any conditions, limitations, or restrictions in its grants, and the right privileges and obligations of the grantee would be regulated according to the terms of the grant, notwithstanding any provisions of any statutory or common law.