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

3. Brief facts giving rise to the appeal are:3.1 The appellant is a landlord of a shop measuring 14 sq. yds. Respondent took the shop on rent @Rs.2,000/- per month for running a hair cutting and dressing work. The respondent-tenant on 27.07.1993 executed an agreement/rent deed undertaking to pay a sum of Rs.2,000/- each month. The rent deed was to be applicable w.e.f. 28.07.1993. The house tax and electricity bills were undertaken to be paid by the tenant. Rent was to be paid up to 5 th day in each month to the owner. In event, the tenant failed to make the payment of rent up to the prescribed date in advance, the owner shall have right to get the shop vacated. The shop owner, if is in need of the shop, can serve notice of one month and get the shop vacated from the tenant. The tenant also undertook to make the payment of rent money by increasing 10 per cent each year3.2 An application under Section 13 of East Punjab Urban Rent Restriction Act, 1949 was filed by the appellant-landlord dated 18.03.2006 praying for eviction of the tenant along with arrears of rent and house tax and interest on the arrears of rent. The appellants case was that rent is not paid from 28.01.2004 to 28.07.2004 and from 29.07.2004 to 28.02.2005. House tax since 1999 to 2005 amounting to Rs.22,302/- was not paid3.3 The tenant filed objection to the application and contended that rate of rent is Rs.1,000/- per month. It was further pleaded that at the time of taking shop in question, no other condition was agreed or settled. However, the signatures were obtained on some blank paper as security by the landlord, which appears to have been fabricated as alleged rent note. The tenant claimed to have paying the rent @Rs.1,000/- per month till February, 2006, after which landlord refused to accept the rent3.4 The copy of the rent note dated 27.07.1993 was brought on the record as Exh. A-1. The Rent Controller held Exh.A-1- rent deed as proved. The Rent Controller held that rent note – Exh.A-1 is not signed by both the parties. The Rent Controller further held that although time is not specified, but it is not a lease deed, so not compulsorily registrable. The Rent Controller also held that tenant was liable to pay the house tax. The respondent tendered rent @ Rs.2,000/- w.e.f. 28.01.2004, which was accepted under protest. The Rent Controller held that tenant was in arrears of rent and house tax so the respondent-tenant is liable to eviction from the premises in dispute. The Rent Controller held that there exist relationship of landlord and tenant between the parties. The Rent Controller allowed the application of the appellant and directed eviction of the respondent from the premises in question3.5 An appeal was filed by the tenant against the order of the Rent Controller. The Appellate Court did not agree with the findings of the Rent Controller that document Exh. A-1 was not compulsorily registrable. Appellate Court observed that perusal of the document Exh.A-1 reveals that there would be increase in the rent to the tune of 10% every year, hence the document was not executed for a period of less than a year rather the intention of the parties is clear that it was executed for more than one year, hence the document was required to be registered under Section 17(1)(d) of the Registration Act, 1908. However, the Appellate Court rejected the claim of the tenant that rate of rent was Rs.1,000/- only. The Appellate Court after holding that document was compulsorily registrable took the view that the clause regarding 10% yearly increase cannot be relied and judgment of Rent Controller was accordingly set aside and the appeal was allowed3.6 The appellant aggrieved by the order of the Appellate Court filed a revision before the High Court. The High Court dismissed the revision referring to the finding of the Appellate Court that rent note – Exh.A-1 was compulsorily registrable. The case of the landlord to enforce condition in lease deed regarding increase of the rent was not relied. Aggrieved by the said judgment, this appeal has been filed.

Court's reasoning:
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.