Judgment Case ID: 52

Judgment:
Civil Appeal No. 114 of 1950. Appeal from a judgment and decree of the High Court of Patna (Shearer and Reuben JJ.) dated 5th November	 1948	 in Appeal No. 2064 of 1946	 271 which arose out of a decree of the District Judge of Purulia in Title Appeal No. 116 of 1945. The facts are stated fully in the judgment. M.C. Setalvad	 Attorney General for India	 (Nandial Untwalia	 with him) for the appellant. B. C. De (Jyotirmoy Ghose	 with him) for the respondent. November26. The Judgment of the Court was deliv ered by MUKHERJEA J. This appeal is on behalf of the defendant and it arises out of a suit commenced by the plaintiff respondent	 in the Court of the Subordinate Judge at Chai bassa	 for recovery of possession of the land described in schedule to the plaint	 on the allegation that the defendant was a monthly tenant in respect of the same	 and that the tenancy was determined by a notice to quit. The suit was decreed by the trial court and the decision was affirmed	 on appeal	 by the District Judge	 Purulia	 and on Second Ap peal	 by a Division Bench of the High Court of Patna. The defendant has now come up to this court on the strength of a certificate granted under section 110	 Civil Procedure Code. Mr. Setalvad	 appearing on behalf of the defendant appellant	 stated to us at the outset that he would not dispute the validity or sufficiency of the notice to quit served upon his client	 if on the facts of this case he is held to be a monthly tenant under the plaintiff in respect of the premises in suit. His contention	 in substance	 is that the defendant was at no point of time a monthly tenant under the plaintiff or his predecessor. There might have been	 according to the learned Counsel	 two tenancies for one year each for two successive periods	 but on the expiry of the second yearly lease	 which happened on 7th December	 1926	 the defendant ceased to be a tenant and no fresh tenancy was created by holding over as is contemplated by section 116 of the Transfer of Property Act. As there was no holding over	 there could not be any question of a monthly tenancy being brought into existence 272 under the provision of section 116 of the Transfer of Property Act	 and the present suit of the plaintiff having been admittedly brought more than 12 years after the deter mination of the second yearly lease	 is barred by limitation under Article 139 of the Indian Limitation Act. The whole controversy in this appeal thus centres round the point as to whether the defendant was in fact a monthly tenant under the plaintiff at the date when the notice to quit was served upon him. To appreciate the respective contentions that have been put forward upon this point by the learned Counsel on both sides	 it will be necessary to narrate briefly the material facts in their chronological order. The property in suit is a plot of land	 measuring 4 bighas 12 cuttas	 and is comprised in old Survey plot No. 578 of village Jugselai in the district of Singhbhum. The entire village forms part of the Dhalbhum estate	 of which the plaintiff is admittedly the present proprietor. One Charan Bhumiji was the " Prodhan" of village Jugselai from some time before 1913 and on 24th July	 1913	 the father of the defendant	 by a registered Patta	 took a lease of about :31 bighas of land appertaining to Survey plot No. 573 from this Prodhan for purposes of cultivation. It is not disput ed that the property in suit is covered by this Patta. At that time the proprietor of the Dhalbhum estate was Raja Satrughna and he died in 1916	 leaving behind him a will by which the entire estate was bequeathed to the present plain tiff. The plaintiff 's claim under the will was challenged by one Partap Chandra Deo Dhabal who succeeded in getting his name recorded as proprietor of the zemindari in the Singhbhum Collectorate. Thereupon the plaintiff instituted a suit (being Title Suit No. 67 of 1921) in the Court of the Subordinate Judge at Midnapore for establishment of his title to the zemindari and the suit was decreed by the trial Judge. Against this decision	 the defendant Pratap Chandra Deo Dhabal took an appeal to the High Court of Calcutta and during the pendency of this appeal	 the High Court appointed a Receiver who was put in 273 possession of the entire estate. On 8th December	 1924	 the defendant executed a registered Kabuliyat in favour of the Receiver	 by which he purported to take settlement of the land in suit for a period of 10 years at a rental of Rs. 46 per annum and a selami of Rs. 250. There was a covenant in the lease	 which looks like one for perpetual renewal	 and it was to the effect that on the expiry of the term	 if the lessor did not require the land for his own purposes and decided to re settle it	 the lessee would be entitled to fresh settlement on enhanced	rent and on such terms as might be then agreed upon between the parties. It appears from the record that the selami money	 amounting to Rs. 250	 was paid by the defendant to the Receiver several months before the Kabuliyat was executed	 and the rental amounting to Rs. 46 was paid for the first time on 8th of March	 1925. The next payment of rent was made in the succeeding year	 on 16th of March	 1926. Admittedly	 no further payment of rent was made by the lessee either to the Receiver or to the proprietor since then	 up to this period. The High Court dismissed the appeal preferred by Pratap Chandra Deo Dhabal some time in 1924 and this order of dismissal was affirmed by the Judi cial Committee in May 1927. The Receiver was then dis charged and the plaintiff got possession of the entire estate in July 1927. On April 15	 1937	 the plaintiff brought a suit for ejectment (being Title Suit No. 2 of 1937) against the defendant in respect of this property in the Court of the Subordinate Judge at Chaibassa. The claim was based substantially upon the terms of the Kabuliyat executed by the defendant on 24th of December	 1924	 and the suit was	 in fact	 one for ejectment of a lessee on the expiration of the period provided for in the lease. It was only the renewal clause in the Kabuliyat that was challenged as invalid and inoperative	 not only because it was vague and indefinite but also on the ground that the Receiver acted beyond his authority in entering into a stipulation of this character. 36 274 The defendant in his written statement resisted the plaintiff 's claim for possession primarily on the ground that he had acquired permanent rights in the land under the Prodhan 's Patta of 1913 and continuous occupation of it since then for more than 12 years. The Kabuliyat of 1924	 he attempted to ignore altogether. It was said that it was executed only to avoid trouble and harassment at the hands of the Receiver and that	 being inoperative as a lease	 it could not	 in any view	 affect the prior rights which he acquired under the Patta of 1913. The trial judge decreed the suit. On appeal	 the judg ment was reversed by the District Judge and the plaintiff 's suit was dismissed simply on the ground that the notice to quit that was served on the defendant was ineffectual in law to determine the tenancy. The District Judge found	 first of all	 that the Prodhan 's Patta was void and inoperative in law and could not create any rights in the defendant	 inas much as the Prodhan had no authority to settle lands of this character. The Kabuliyat of 1924 was also held to be inef fectual as not amounting to a lease as defined by the Trans fer of Property Act. It was held	 however	 by the District Judge that apart from the Kabuliyat	 a tenancy was created by payment and acceptance of rent in the years 1925 and 1926 and after 1926 the defendant occupied the position of a monthly tenant by holding over under section 116 of the Transfer of Property Act. Such tenancy could be determined by fifteen days ' notice	 expiring with the month of tenancy	 but as the notice	 which was served by the plaintiff upon the defendant	 did not fulfil this requirement	 the plain tiff 's suit was bound to fail. The District Judge	 though he dismissed the suit	 gave the plaintiff a declaration to the effect that the defendant was liable to eviction on service of fifteen days ' notice	 expiring with the end of the Bengali month of the tenancy. Against this decision	 the plaintiff took an appeal to the High Court of Patna	 and the appeal came up for hearing before Harries C.J. and Fazl Ali J. The learned Judges affirmed the finding of the lower appellate court that 275 the Prodhan 's Patta did not create any rights in the defend ant and that the Kabuliyat of 1924 was also ineffectual as a lease to give the defendant any tenancy right. The learned Judges further held that the defendant did not acquire any permanent right in the land by prescription or otherwise and that by reason of the payment of rent to the Receiver in the years 1925 and 1926 he became a tenant from month to month. In these circumstances the High Court con curred with the District Judge in holding that the notice to quit was insufficient for the purpose of determining the tenancy. It seems that the defendant made a strenuous endeavour before the High Court to establish that as the Patta of 1913 as well as the Kabuliyat of 1924 were both invalid and inoperative	 he was never a tenant in respect of the land in suit and no tenancy could be created by the two payments of rent	 inasmuch as the Receiver had no authority to receive them. It was contended	 therefore	 that the plaintiff was in possession of the land as a trespasser all along and thus acquired a good title by adverse possession. The High Court	 though it held definitely that the defendant was a tenant from month to month	 nevertheless kept open the question as to whether the payment of rent to the Receiver was tantamount to payment to the plaintiff. It was held that as the notice to quit was defective	 that was suffi cient for dismissal of the suit	 and the declaration made in the decree of the lower appellate court that the defendant was liable to be evicted on service of fifteen days ' notice	 expiring with the Bengali month of the tenancy	 was directed to be deleted. This judgment of the High Court was pro nounced on the 5th of May	 1942. Soon after this on 18th July	 1942	 the plaintiff served a notice to quit on the defendant	 asking him to vacate the land on the 7th of August following	 and as the defendant refused to give up possession	 the present suit was brought on 22nd July	 1943. The plaint in the present suit is a very simple one;it proceeds entirely on the findings record ed by the High Court in the previous litigation. The right to 276 possession is not based on the terms of the Kabuliyat of 1024. The plaintiff avers that by reason of the payment of rent on 8th March	 1925	 and 16th March	 1926 the defendant became a tenant from month to month under him and the tenan cy was determined by a proper notice to quit. The defendant in his written statement raised several pleas in answer to the plaintiff 's claim. He reiterated his rights under the Patta of 1913 and urged that by reason of his holding possession of the land on assertion of a perma nent tenancy right for a long period of time	 he acquired a valid title to the property. As regards the Kabuliyat of 1924	 it is said in one part of the written statement that the defendant executed this document under misapprehension of facts without knowing the contents thereof. But at anoth er place it is stated that the Kabuliyat was binding on the plaintiff and he was not entitled to institute a suit in contravention of its terms	 without in any event refunding the selami money. The defendant admitted	 what he denied in the earlier suit	 that the payments made to the Receiver amounted to payments to the plaintiff himself	 although this question was left open by the High Court on the previous occasion. The other pleas raised in the written statement are not material	 except that a specific point was taken	 challenging the sufficiency of the notice to quit that was served upon the defendant. On these pleadings a number of issues were framed. The trial judge held on a consideration of the materials placed before him that the Prodhan 's Patta was a void and inopera tive document and conferred no rights on the defendant. He negatived the case	 which the defendant attempted to make in course of hearing	 that the Kabuliyat executed by him was obtained by threat and coercion. It was held by the Subordi nate Judge in accordance with the decisions of the Patna High Court on the point that the Kabuliyat could not operate as a lease under the Transfer of Property Act	 and conse quently the defendant did not acquire the rights of a lessee under the same. He held	 however	 277 that by payment and acceptance of rent a new tenancy was created de hors the Kabuliyat	 and as the new tenancy was for building purposes	 it. was a tenancy from month to month under section 106 Transfer of Property Act	 terminable by fifteen days notice. As the notice was proper and	 suffi cient	 the trial judge decreed the plaintiff 's suit. Against this judgment	 the defendant took an appeal to the court of the District Judge	 Purulia	 and the District Judge dismissed the appeal and affirmed the judgment of the trial court. It appears that two points were raised by the defend ant before the District Judge in support of his appeal: one was that the Kabuliyat of 1924 was effective as a lease and consequently the defendant could not be ejected in contra vention of the terms thereof. At the same time it was con tended that there was no tenancy at all held by the defend ant under the plaintiff	 inasmuch as the payments made to the Receiver could not be regarded as payments to the plain tiff. The first point	 the District Judge pointed out	 was contrary to the express decisions of the Patna High Court	 while the second was contradictory to the defendant 's own admission in the written statement. The defendant then came up in Second Appeal before the High Court of Patna and the appeal was heard by a Division Bench	 consisting of Shearer and Reuben JJ. The learned Judges agreed in dismissing the appeal and affirming the decree made by the courts below	 but the grounds upon which they based their decision are not identical. As regards the nature of the tenancy created by implication of law in consequence of the Receiver having accepted payment of rent from the defendant	 it was held by Reuben J. that when the Receiver accepted rent in 1925	 it should be presumed that the parties intended to create a tenancy for one year and when he accepted rent again in 1926	 such acceptance amount ed to his assenting to the defendant 's holding over; and in view of the purpose for which the tenancy was created	 the defendant from that time became a tenant from 278 month to month under the provision of section 116	 Transfer of Property Act. Shearer	 J.	 felt difficulty in accepting this view though in his opinion if a periodic tenancy was created at all	 it was from month to month and not from year to year. There are observations	 however	 in the latter part of the judgment of Shearer	 J.	 which would go to show that in his opinion the creation of two leases	 each for one year	 could be fairly gathered from the admitted facts of the case. The learned Judge was not sure	 however	 as to whether the defendant ever became a tenant of the plaintiff. He discussed the nature of the renewal clause contained in the Kabuliyat and held it to be void for uncertainty. He also negatived the defendant 's plea on the strength of adverse possession. His conclusion was that whatever view might be taken regarding these points	 the defendant had no valid defence to the plaintiff 's claim for eviction and consequently the decision of the courts below was right. It is the propriety of this decision that has been challenged before us in this appeal. Mr. Setalvad	 in support of his client 's case	 has not called in aid the Prodhan 's Patta of 1913; nor has he placed any reliance upon the Kabuliyat of 1924 and the covenant for renewal contained therein. He has not disputed before us that the payments made to the Receiver were in reality payments to the plaintiffs	 and has conceded that a tenancy could be created by implication by reason of his client having paid and the Receiver having accepted rents in re spect of the suit premises. His contention	 as indicated already	 is that by reason of the payment and acceptance of rent	 there were two tenancies for one year each	 creat ed for two successive years; but the relationship of landlord and tenant between the parties came to an end on the expiration of the second annual lease. As there was no holding over by the defendant since then as contemplated by section 116	 Transfer of Property Act	 there was no subsist ing tenancy at any time after December	 1926	 and the plain tiff 's suit instituted in the year 1943 was obviously time barred. 279 Mr. De	 appearing for the plaintiff respondent	 has	 on the other hand	 contended that the tenancy that was created by payment and acceptance of rent in the year 1925 was from the beginning a tenancy from month to month under the provi sion of section 106. Transfer of Property Act. Alterna tively	 he has argued that if a tenancy for one year only was created in the year 1925	 then after the expiration of that one year 's lease the defendant held over and the Receiver 's assent to his continuing in possession is evidenced by acceptance of rent from him in the year 1926. The tenancy thus created would be a tenancy from month to month under section 116	 Transfer of Property Act. Lastly	 it is argued that even if two successive tenancies were created for one year each	 the facts admitted and proved would go to show that the tenant held over after the second annual lease and consequently a tenancy from month to month came into existence in accordance with the provision of section 116	 Transfer of Property Act	 even though no rent was demanded by the landlord after 1926. The contro versy between the parties so far as this appeal is con cerned	 therefore	 narrows down to the following three points : (1) What was the nature of the tenancy created by ac ceptance of rent by the Receiver from the defendant on the 8th of March	 1925 ? If it was a tenancy from month to month	 it is not disputed on behalf of the defendant that no question of holding over would at all arise and the plain tiff would be entitled to succeed. (2) If in 1925 a tenancy was created for one year	 can the landlord 's assent to the defendant 's continuing in possession be inferred from the fact that rent was accepted from the defendant in March	 1926 ? (3) If the payment and acceptance of rent in March	 1926	 brought into existence a tenancy for another year	 was there any subsequent tenancy created after the second year	 although there was no 	demand or acceptance of rent by the landlord since then ? 280 So far as the first point is concerned	 the courts below have proceeded on the view that a registered instru ment signed by the landlord was necessary to create. a valid lease for ten years. That view was not questioned before us and we express no opinion on this point. Proceeding	 there fore	 on the assumption that even though the parties might have intended to create a lease for 10 years	 no operative ]ease came into existence	 the only facts admitted are that the defendant remained in possession of the land belonging to the plaintiff with the permission of the Receiver who represented the plaintiff 's estate	 and paid rent to the latter. From these facts a tenancy could be fairly presumed and the point for determination is	 what was the duration of the tenancy that was created in the present case? Section 106 of the Transfer of Property Act lays down: "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 any other purpose shall be deemed to be a lease from month to month	 terminable	 on the part of either lessor or les see	 by fifteen days ' notice expiring with the end of a month of tenancy. " 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 sec tion applies not only to express leases of uncertain dura tion but also to leases implied by law which may be inferred from possession and acceptance of rent and other circum stances. 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 281 regarded as a tenancy from month to month. unless there was a contract to the contrary. The question now is	 whether there was a contract to the contrary in the present case ? Mr. Setalvad relies very strongly upon the fact that the rent paid here was an annual rent and he argues that from this fact it can fairly be inferred that the agreement between the parties was certainly not to create a monthly tenancy. It is not disputed that the contract to the con trary	 as contemplated by section 106 of the Transfer of. Property Act	 need not be an express contract; it may be implied	 but it certainly should be a valid contract. If it is no contract in law	 the section will be operative and regulate the duration of the lease. 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 there to. Conse quently	 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. But the difficulty in applying this rule to the present case arises from the fact that a tenancy from year to year or reserving a yearly rent can be made only by registered instrument	 as laid down in section 107 of the Transfer of Property Act(1). The Kabuliyat in the case before us is undoubtedly a registered instrument	 but ex concessis it is not an operative document at all and cannot consequently fulfil the requirements of section 107 of the Transfer of Property Act. This position in fact is not seriously controverted by Mr. Setalvad; but what he argues is that a lease for one year certain might fairly be inferred from the payment of annual rent	 and a stipulation like that would not come within the mischief of section 107 of the Transfer of Property Act. His contention is that the payment of an annual rent	 as was made in the present case	 is totally inconsistent with a monthly lease. We are not unmindful of the fact that in (1) Vide Debendra Nath vs Syama Prasanna	 	 1126 37 282 certain reported cases	 such inference has been drawn. One such case has been referred to by Mr.Justice Reuben in his judgment(1)	 where reliance was placed upon an earlier decision of the Calcutta High CoUrt(3). A similar view seems to have been taken also in Matilal vs Darjeeling Municipality(3). But one serious objection to this view seems to be that this would amount to making a new contract for the parties. The parties here certainly did not intend to create a lease for one year. The lease was intended to be for a period exceeding one year	 but as the intention was not expressed in the proper legal form	 it could not be given effect to. It is one thing to say that in the absence of a valid agreement	 the rights of the parties would be regulat ed by law in the same manner as if no agreement existed at all; it is quite another thing to substitute a new agreement for the parties which is palpably contradicted by the admit ted facts of the case. It would be pertinent to point out in tiffs connection that in the Second Appeal preferred by the plaintiff against the dismissal of his earlier suit by the lower appellate court	 the High Court definitely held that the defendant 's tenancy was one from month to month under section 106	 Transfer of Property Act	 and the only question left open was whether payment to the Receiver amounted to payment to the plaintiff himself. In this suit the defendant admitted in his written statement that payment to the Receiver had the same effect as payment to the plaintiff	 and the trial judge took the same view as was taken by the High Court on the previous occasion	 that by payment to and acceptance of rent by the Receiver	 the defendant became a monthly tenant under section 106	 Transfer of Property Act. In his appeal before the District Judge	 which was the last court of facts	 the only ground upon which the defendant sought to challenge this finding of the trial judge was that the Receiver was an unauthorised person because of the 'decision of (1) Aziz Ahmad vs Alauddin Ahmad	 A.I.R. 1933 Pat. 485. (2) Md. Moosa vs Jaganund (3) 17 C.L.J. 167. 283 the Judicial Committee which set aside his appointment and consequently acceptance of rent by such person could not create a monthly tenancy. This shows that it was not the case of the defendant at any stage of this suit that because one year 's rent was paid	 a tenancy for one year was brought into existence. We think	 therefore	 that on the facts of this case it would be quite proper to hold that the tenancy of the defendant was one from month to month since its inception in 1924. This view finds support from a number of reported cases(1)	 and in all these cases the rent payable was a yearly rental. On this finding no other question would arise and as the validity of the notice has not been questioned before us	 the plaintiff would be enti tled to a decree in his favour. The appeal thus fails and is dismissed with costs. Appeal dismissed.

Summary:
The rule of construction embodied in section 106 of the Transfer Property Act 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. 270 The contract to the contrary contemplated by the said sec tion need not be an express contract; it may be implied	 but it should be a valid contract. If the contract is invalid the section will regulate the duration of the lease. When the rent reserved is an annual rent	 a presump tion would arise that the tenancy was an annual tenancy unless there is something to rebut this presumption. But under section 107 of the Transfer of Property Act a tenancy from year to year or reserving an yearly rent can be made only by a registered instrument. The defendant executed a registered kabuliyat to the Receiver who was managing an estate pending a suit	 purport ing to take a plot of land on lease for a period of ten years at a rental of Rs. 46 per annum and paid the first year 's rent of Rs. 46 on the 8th March	 1925	 and the next year 's rent on the 16th March	 1926. No further rent was paid by the defendant to the Receiver or to the proprietor after that date. The proprietor	 treating the defendant as a monthly tenant served notice to quit on him on the 18th July	 1942	 asking the latter to vacate on the 7th August	 1942	 and instituted a suit for ejectment in July	 1943. The kabuliyat was found to be inoperative in law and the defend ant contended that the payment and acceptance of annual rent in 1925 and 1926 did not create a monthly tenancy but two tenancies for one year each for two successive years	 that the relation of landlord and tenant came to an end on the expiration of the second annual lease	 and	 as there was no holding over	 the suit was time barred: Held (i) that from the facts a tenancy could be pre sumed to have come into existence from 1924; (ii} as the purpose of the tenancy was for building structures on the land	 under sec. 106 of the Transfer of Property Act the tenancy must be presumed to be one from month to month in the absence of a contract to the contrary; (iii) a contract that the tenancy was for one year certain could not be inferred in the present case from the fact that an annual rent was paid in 1925 and 1926	 inasmuch as the kabuliyat	 though inoperative in law	 showed that the parties never intended to create a lease for one year; (iv) on the facts of the case it was quite proper to hold that the tenancy was one from month to month since its inception in 1924 and the suit was not time barred. Debendra Nath vs Shyama Prasanna and Sheikh Akloo vs Emaman (I.L.R. approved. Aziz Abroad vs Alauddin Abroad (A.I.R. 1933 Pat. 485)	 Md. Moosa vs Jaganand and Matilal vs Darjeel ing Municipality (17 C.L.J. 167) referred to.