Case: SEVOKE PROPERTIES PVT. LTD Vs. WEST BENGAL STATE ELETRICTIY DISTRIBUTION COMPANY LIMITED

3. The subject matter of the dispute is a plot of land situated at Second Mile, Sevoke Road, Siliguri, West Bengal admeasuring 4 bighas, 18 Cottahs, 9 Chittacks and 18 sq.ft4. On 22 March 1975, a deed of settlement was executed by Mohan Lal Khemka, by which a private trust was created for the benefit of his grandson. By the said deed, Mahabir Prasad Bhartia and Sunita Bhartia were appointed as trustees. On 5 November 1979, a deed of settlement resulted in the creation of a private trust. At this stage, it would be material to note that the property in dispute has by subsequent devolutions vested in the appellant5. On 25 May 1981, an indenture of lease was entered into between the appellant and the respondent. The term of the lease was fifteen years. Under the terms of the lease, the respondent took possession of the land. The rent was paid until 19 April 19846. The State of West Bengal initiated proceedings for requisitioning of the land under the West Bengal Lands (Requisition and Acquisition) Act 1948. The appellant challenged the validity of the requisitioning in a Writ Petition before the High Court. The petition was allowed by a judgment dated 25 September 1998 and the order of requisitioning was set aside. The judgment of the Single Judge was questioned in appeal by the respondent. The appeal was dismissed on 16 November 20007. Eventually, a suit for eviction was instituted before the Court of the Civil Judge (Senior Division), Jalpaiguri . The respondent filed its written statement. The learned trial judge decreed the suit by a judgment and order dated 30 November 2005. The trial court passed a decree for vacant and peaceful possession. A preliminary decree for mesne profits was passed. The respondent filed an appeal before the High Court. By an interim order dated 18 May 2006, the Division Bench of the High Court directed that proceedings before the trial Court for ascertainment of mesne profits in terms of Order XX Rule 12 of the Code of Civil Procedure 1908shall continue, but no final decree shall be drawn up without the leave of the Court. The execution proceedings were stayed, subject to deposit of the arrears of rent8. Following the order of the High Court, the valuer submitted a report in regard to the valuation of the property. The trial Court accepted the valuation on 7 September 2016. The order of the trial court was challenged by the respondent before the High. The petition was dismissed on 1 May 2018 by a learned Single Judge9. By a judgment and order dated 14 November 2018, the High Court has set aside the decree for possession and, in consequence, directed that the suit instituted by the respondent shall stand dismissed. The High Court has held that:(i) A lease of immovable property for a term exceeding one year can only be made by a registered instrument;(ii) Since the indenture of lease was unregistered, it was governed by the first paragraph of Section 107 of the Transfer of Property Act 1882 ;(iii) The relationship between the parties would, in consequence, be governed by the second paragraph of Section 107;(iv) The tenancy shall, therefore, be deemed to be from month to month terminable by fifteen days notice under Section 106; and(v) In the absence of a notice under Section 106 determining the relationship of lessor and lessee between the parties, the suit was not maintainable.

Court's reasoning:
13. In terms of the provisions of Section 107, a lease of immovable property for a term exceeding one year can only be made by a registered instrument. Admittedly, in the present case, the indenture of lease has not been registered. In consequence, the contents of the indenture would be inadmissible in evidence for the purpose of determining the terms of the contract between the parties. This is the plain consequence of the provisions of Sections 17 and 49 of the Registration Act 1908 6 . The only purpose for which the lease can be looked at is for assessing the nature and character of the possession of the respondentIn the judgment of this Court in Satish Chand Makhan (supra), the father of the plaintiff had leased open land to the defendant for a period of five years under a registered deed of lease. After the expiry of the initial term, there was a draft agreement for renewal for a further period of nine years, which, however, was not registered under Section 17(1)(d) of the Registration Act 1908. The plaintiff served a notice for the determination of the tenancy on the ground of forfeiture under Section 111(g) and brought a suit for ejectment. The High Court held that the lease had been determined by efflux of time under Section 111(a) upon the expiry of the term of nine years and hence, no notice under Section 106 was required for the determination of the lease. While determining the correctness of the judgment of the High Court, this Court observed that the defendants have nowhere admitted that the lease was for a specific term of nine years . On the contrary, the defendants had pleaded that they were tenants holding over under Section 116 of the TP Act. This Court held that the unregistered draft lease agreement was inadmissible in evidence under Section 49 of the Registration Act except for a collateral purpose of proving the nature and character of the possession of the defendants. The terms of the lease did not constitute a collateral purpose. Consequently, the unregistered draft lease was held to be inadmissible to create a valid lease for a renewed term of nine years. In this background, this Court held that the defendants were tenants holding over under Section 116 in which event it was necessary for the plaintiff to serve a notice under Section 106. In the absence of such a notice, the suit, it was held, would not be maintainable15. Mr Sundaram has sought to distinguish this decision, since in that case this Court found that the defendant was a tenant holding over within the meaning of Section 116. We find merit in the submission which has been urged by Mr Sundaram. In the case before this Court noted above, the defendants had not admitted that the term of the lease was for a period of nine years. This was noted by the Court, as we have extracted earlier. On the contrary, we find that in the present case, there is an express admission on the part of the defendants that they were in occupation under the lease agreement for a period of fifteen years with effect from 1981 and that the period of lease expired on 24 May 1996. Such a specific admission on the part of the defendants is contained in paragraph 22 of the written statement. Under Section 111(a), a lease of immovable property determines by efflux of time limited thereby. Once this be the position, there can be no manner of doubt that the position of the respondent on the expiration of the lease was of a tenant at sufferance. In the circumstances, there was no necessity of a notice for the termination of the lease under the provisions of Section 106. The respondent having squarely admitted in its written statement that it was in occupation for a term of fifteen years, that term having expired, the lease stood determined by efflux of time. Once the lease stood determined by efflux of time, there was no necessity for a notice of termination under Section 106The above judgment is clearly distinguishable. Since the agreement of sub-lease in Park Street Properties (supra) was unregistered, clause 6 which governed the sub-lease could not be looked into. In the present case, the indenture of lease being unregistered, the contents of the instrument are inadmissible in evidence. However, it is evident from the clear admission in the written statement that the appellant accepted and proceeded on the basis that the period of lease expired on 24 May 1996. Thereafter, the position of the appellant is of a tenant at sufferance.