Case ID: 5706

Judgment:
Special Leave Petition (Civil) No. 15667 of 1987. 813 From the Judgment and Order dated 11.11.1987 of the Patra High Court in Appellate Decree No. 133 of 1983. G.L. Sanghi	 S.K. Mehta	 M.K. Dua	 S.M. Sarin and Aman Vachher for the Petitioner. Salman Khurshid	 Irshad Ahmad	 V.D. Phadke and L.R. Singh for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI	 J. This is a petition for leave to appeal against the judgment and order dated 11th November	 1987 of the High Court of Patna. On 16th January	 1958 a lease deed was executed between the lessee Latifur Rehman and lessor Khaja Midhat Noor (hereinafter called the respondent) with permission to sub lease the same. The said Latifur Rehman sub leased the premises to Burmah Shell Oil Distributing Company (the petitioner herein) for running a petrol pump and making necessary constructions thereon. The lease was for a period of ten years which expired on 16th January	 1968. It appears further that after the lease period had expired	 the sub lessee	 petitioner continued to pay the rent which was being accepted continuously from month to month by the respondent	 the lessor. A notice was issued by the respondent to the lessee terminating the lease and for giving vacant possession of the land by the 15th January	 1973 and also requiring the removal of the buildings	 plant	 etc.	 by the 16th January	 1973. In the last two paras of the said notice	 it was stated that the lessee was to surrender the lease hold land on the expiry of 15th January	 1973. No notice was given separately to the petitioner terminating its lease. A suit for ejectment was filed thereafter. The lessee Latifur Rehman did not contest the suit for ejectment. The petitioner	 however	 contested that proceeding. The learned Munsiff I	 Gaya	 by his judgment dated 8th May	 1979 dismissed the suit holding that the notice terminating the lease was necessary and the notice in this case was invalid. The plea of the landlord that the tenancy expired by afflux of time	 was rejected. On 22nd February	 1983 the 1st Additional Sub Judge	 Gaya allowed the appeal of the landlord and held that the notice terminating the tenancy and asking the petitioner to surrender by the 15th January	 1973 was a valid notice. The main question involved is	 whether there was a valid termination of the lease and as such the sub lessee	 the petitioner herein was 814 bound to deliver vacant possession. A written statement had been filed by the petitioner	 the sub lessee	 wherein it was	 inter alia	 stated that it was holding over the lease hold property after the expiry of the lease by paying rent. No notice terminating tenancy was received by it. The validity of the notice to the lessee was also challenged. The trial Court held that the lease was not extended for a fixed period of five years in absence of any written instrument. The following two questions of law were re formulated by the High Court: (1) In absence of any registered instrument executed by both the parties i.e. the lessor and the lessee after the period stipulated in Ext. 4 i.e. the period of ten years	 can it be said that the lease was extended automatically for a period of five years in terms of Ext. 4 or further whether the lessee was holding the suit property as tenancy from month to month? (2) If the first part of question (1) is held in negative and second part in the affirmative	 as a consequence of which it must be held that the lease was required to be determined	 whether the notice as contained in Ext. 7 validly terminated the lease of the lessee? Indubitably	 the lessee came in possession of the property in question on 16th January	 1958. The lease was for a period of ten years with a right of renewal for a further period of five years. After the expiry of ten years	 no instrument was executed by the parties and the lessee continued to remain in possession of the suit property. The lessor accepted the rent and allowed the lessee to continue. It is relevant in this connection to refer to the provisions of the (hereinafter called 'the Act '). Section 106 of the Act deals with the duration of certain leases in absence of written contract or local usage and section 107 deals how leases are to be made. These sections read as follows: "106. In the absence of a contract or local law or usage to the contrary	 a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year	 terminable	 on the part of either lessor or lessee	 by six months ' notice expiring with the end of a year of the tenancy; and a lease of immovable property for 815 any other purpose shall be deemed to be a lease from month to month	 terminable	 on the part of either lessor or lessee	 by fifteen days ' notice expiring with the end of a month of the tenancy. Every notice under this section must be in writing	 signed by or on behalf of the person giving it	 and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party	 or to one of his family or servants	 at his residence	 or if such tender or delivery is not practicable affixed to a conspicous part of the property. A lease of immovable property from year to year	 or for any term exceeding one year	 or reserving a yearly rent	 can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument	 such instrument or	 where there are more instruments than one	 each such instrument shall be executed by both the lessor and the lessee: Provided that the State Government may	 from time to time	 by notification in the Official Gazette	 direct that leases of immovable property	 other than leases from year to year	 or for any term exceeding one year	 or reserving a yearly rent	 or any class of such leases	 may be made by unregistered instrument or by oral agreement without delivery of possession. " In view of the paragraph 1 of section 107 of the Act	 since the lease was for a period exceeding one year	 it could only have been extended by a registered instrument executed by both the lessor and the lessee. In the absence of registered instrument	 the lease shall be deemed to be "lease from month to month". It is clear from the very language of section 107 of the Act which postulates that a lease of immovable property from year to year	 or for any term exceeding one year	 or reserving a yearly rent	 can be made only by a registered instrument. In the absence of registered instrument	 it must be a 816 monthly lease. The lessee and the sub lessee in the facts of this case continued to remain in possession of the property on payment of rent as a tenant from month to month. The High Court so found. We are of the opinion that the High Court was right. Section 116 of the Act which was placed before the High Court deals with the effect of holding over and provides as follows: "116. If a lessee or under lessee of property remains in possession thereof after the determination of the lease granted to the lessee	 and the lessor or his legal representative accepts rent from the lessee or under lessee	 or otherwise assents to his continuing in possession	 the lease is	 in the absence of an agreement to the contrary	 renewed from year to year	 or from month to month	 according to the purpose for which the property is leased	 as specified in section 106. " It was submitted before the High Court that this was not a case of continuing of old tenancy for a period of five years but in view of the clear provisions of section 107 which we have noted hereinbefore and in the absence of a registered instrument	 it must be held that it was holding over and not continuation of old tenancy for a further period of five years. That would be the harmonious construction of section 107 read with section 116 in the facts of this case. We are of the opinion that the High Court was right that the tenancy was automatically determined on the expiry of ten years which was stipulated in Ext. Thereafter the lessee continued to hold the property and the lessor accepted the rent. The lease was	 therefore	 renewed from month to month because it was not the case of any party that it was for agricultural purposes. In that view of the matter	 the termination of the lease could only be by giving a valid notice. Such notice was given to the lessee but not to the sub lessee. The respondent 's case is that a notice to sub lessee was not necessary. It was contended on behalf of the appellant that by Ext. 7 the lessee was asked to quit the lease hold premises on the expiry of 15th June	 1973. Admittedly	 in this case	 the lease was executed on 16th January	 1958 and from that date the lease came into existence. For computing the period of ten years the 16th January	 1958 had to be excluded. The tenancy was	 therefore	 terminated on the expiry of 16th of the month. The notice in the instant case of the quit which was Ext. 7 before the Court dated 30th November	 1972	 817 was given on behalf of the respondent to Latifur Rehman lessee. In paragraph 4 of Ext. 7 it was stated that the lessee was to deliver the possession of the lease hold property by 16th January	 1973. In paragraph 5 of Ext. 7 the lessee and sub lessee were required to remove the buildings	 plants etc. by the 16th January	 1973. In the last but one and the last paragraph of Ext. 7 it was stated that the lessee was to surrender the properties of the lease hold land on the expiry of 15th January	 1973. The question is whether there was a valid notice. The High Court held that in the facts of this case	 there was a valid notice of termination and after the valid notice of termination of the lease to the lessee	 there was no need to give a fresh notice to the sub lessee. Notice must be read in the context of the facts of each particular case having regard to the situation of the parties to whom it is addressed. In Harihar Banerji and others vs Ramasashi Roy and others	 45 Indian Appeals 222 at page 225	 the Judicial Committee observed as follows: ". .that notices to quit	 though not strictly accurate or consistent in the statements embodied in them	 may still be good and effective in law; that the test of their sufficiency is not what they would mean to a stranger ignorant of all the facts and circumstances touching the holding to which they purport to refer	 but what they would mean to tenants presumably conversant with all those facts and circumstances; and	 further	 that they are to be construed	 not with a desire to find faults in them which would render them defective	 but to be construed ut res magis valeat quam pereat. " This is how the notices should be literally construed. This decision was relied upon by this Court in Mangilal vs Suganchand Rathi; 	 There	 however	 the facts were different. There the defendant was a tenant of the plaintiffs. The defendant was in arrears of rent for one year to the extent of Rs. 1020. On April 11	 1959 the plaintiffs served a notice on the defendant requiring him to remit to them Rs.1020 within one month from the date of service of notice	 failing which suit for ejectment would be filed. This notice was received by the defendant on April 16	 1959. On June 25	 1959 the defendant sent a reply to the notice enclosing with it a cheque for Rs.1320. This amount consisted of the rental arrears as well as the rent due right up to June 30	 1959. The plaintiffs accepted the cheque and cashed it and gave a fresh notice on July 9	 1959 requiring the defen 818 dant to vacate the premises by the end of the month of July. The defendant did not vacate the premises. Then the plaintiffs filed a suit to eject the defendant upon the ground that the latter was in arrears of rent for one year and had failed to pay the arrears within one month of the service of the notice dated April 11	 1959 upon him. From the undisputed facts it was clear that the defendant was in fact in arrears of rent and had failed to pay it within the time prescribed by cl.(a) of section 4 of the Madhya Pradesh Accommodation Control Act	 1953. It was held that though the notice dated 11th April	 1959 could be construed to be composite notice under section 4(a) of the Accommodation Act and section 106 of the it was ineffective under section 106 of the because it was not a notice of 15 clear days. In that case	 the defendant had only 14 clear days ' notice. Reference was made to the aforesaid decision of Harihar Banerji vs Ramsashi Roy (supra) which was distinguished by this Court. This Court held that notice under section 106 of the Act must be strictly complied with. In so holding this Court relied on a decision of the Calcutta High Court in Subadini vs Durga Charan Law	 I.L.R. which was construing a notice contemplated by section 106 of the Act and had held that in calculating the 15 days ' notice the day on which the notice was served was excluded and even if the day on which it expired was taken into account it would be clear that the defendant had only 14 clear days ' notice. This position was again reiterated by the Calcutta High Court in Gobinda Chandra Saha vs Dwarka Nath Patita	 A.I.R. This Court affirmed this view that notice must be understood in the light of Harihar Banerji vs Ramsashi Roy (supra). This Court held that the suit was actually based upon the notice dated July 9	 1959 which gave more than 15 days ' clear notice to the defendant to vacate the premises. This notice was a valid notice under section 106 of the Act. In the instant case if all the paragraphs of Ext. 7 which is a notice in the instant case are read together in harmony it would be manifest that the lessee was directed to hand over the lease hold property on 16th January	 1973. In the aforesaid view of the matter	 in our opinion	 there was a valid notice of termination of the lease of the lessee. In any event the lessee did not dispute this contention. The lessee accepted a valid termination of the lease hold property. In Roop Chand Gupta vs Raghuvanshi (Pvt.) Ltd. and another; 	 	 it was held by this Court that it is quite clear that law does not require that the sub lessee need be made a party	 if there was a valid termination of the lease. This Court reiterated that in 819 all cases where the landlord instituted a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee and did not implead the sub lessee as a party to the suit	 the object of the landlord is to eject the sub lessee from the land in execution of the decree and such an object is quite legitimate. The decree in such a suit would bind the sub lessee. This Court noted at page 1892 of the report that this might act harshly on the sub lessee; but this was a position well understood by him when he took the sub lease. The law allows this and so the omission cannot be said to be an improper act. In the facts of this case these observations apply more effectively. The termination of the lease was not disputed by the lessee. There is no allegation of any collusion between the lessee and the respondent. In that view of the matter	 we are of the opinion that the High Court was right. The suit in question was instituted in May	 1979 and the valid notice to quit was given long after the expiry of the period of lease. The sub lessee had long innings. It is time for him to quit. There is no merit in this petition. The special leave petition fails and is	 therefore	 dismissed with costs. R.S.S. Petition dismissed.

Summary:
On 16th January	 1958 a lease deed was executed between the lessee and the lessor respondent in respect of the demised land for a period of ten years	 with a right of renewal for a further period of five years	 and with permission to sub lease the same. The lessee sub leased the premises to the petitioner for running a petrol pump. After the expiry of the lease period on 16th January	 1968	 the lessor continued to accept the rent from month to month. However	 no fresh instrument was executed by the parties. The lessor issued on 30th November	 1972 a notice to the lessee terminating the lease and for giving vacant possession of the land on the expiry of 15th January	 1973 after removing the structures by the 16th January	 1973. No notice was given separately to the petitioner. The lessee did not contest the suit filed on the basis of the notice. The petitioner contested the proceedings and contended that it was holding over after the expiry of the lease	 that no notice terminating tenancy was received by it	 and that the notice was invalid. The trial Court dismissed the suit holding that the notice terminating the lease was necessary and the notice in this case was invalid. The Court also rejected the lessor 's plea that the tenancy expired by afflux of time. The trial Court	 however	 held that the lease was not extended for a fixed period of five years in absence of any written instrument. The 1st Additional Sub Judge allowed the lessor 's appeal and held the notice valid. The High Court upheld the appellate order. 812 Dismissing the special leave petition	 it was	 ^ HELD: (1) In view of paragraph 1 of section 107 of the a lease of immovable property from year to year	 or for any term exceeding one year	 or reserving an yearly rent	 can be made only by a registered instrument. In the absence of a registered instrument	 it must be a monthly lease. [815G H] (2) The High Court was right in holding that the lessee and the sub lessee	 in the facts of this case	 continued to remain in possession as a tenant from month to month. [816A B] (3) The High Court was right that the tenancy was automatically determined on the expiry of ten years. The lease was thereafter renewed from month to month which could only be terminated by giving a valid notice. [816E F] (4) The notice of termination must be read in the context of the facts of each particular case having regard to the situation of the parties to whom it is addressed. If all the paragraphs of the notice in the instant case are read together in harmony it would be manifest that the lessee was directed to handover the lease hold property on 16th January	 1973	 and hence the notice was a valid notice of termination of the lease under section 106 of the Act. [817C;818F] (5) Law does not require that the sub lessee need be made a party	 if there was a valid termination of the lease. In all cases where the landlord instituted a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee and did not implead the sub lessee as a party to the suit	 the object of the landlord is to eject the sub lessee from the land in execution of the decree and such an object is quite legitimate. The decree in such a suit would bind the sub lessee. [818H;819A B] Harihar Banerji vs Ramsashi Roy	 45 Indian Appeals 222;Mangilal vs Suganchand Rathi	 ; ;Subadini vs Durga Charan Law	 I.L.R. ;Gobinda Chandra Saha vs Dwarka Nath Patita	 A.I.R. 1915 Cal. 313 and Roop Chand Gupta vs Raghuvanshi (Pvt.) Ltd.	 ; 	 referred to.