SIRI CHAND (DECEASED) THR. LRS. versus SURINDER SINGH on 17 June 2020

1. Leave granted.

2. This appeal has been filed questioning the judgment of Punjaband Haryana High Court dated 05.09.2018 dismissing the revision filedby the landlord-appellant.

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A3. 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 runninga hair cutting and dressing work. The respondent-tenant on 27.07.1993executed an agreement/rent deed undertaking to pay a sum of Rs.2,000/B- 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 thetenant. 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 theprescribed date in advance, the owner shall have right to get the shopvacated. The shop owner, if is in need of the shop, can serve noticeCof one month and get the shop vacated from the tenant. The tenantalso undertook to make the payment of rent money by increasing 10per cent each year.

3.2 An application under Section 13 of East Punjab Urban RentRestriction Act, 1949 was filed by the appellant-landlord datedD18.03.2006 praying for eviction of the tenant along with arrears of rentand house tax and interest on the arrears of rent. The appellant’s casewas that rent is not paid from 28.01.2004 to 28.07.2004 and from29.07.2004 to 28.02.2005. House tax since 1999 to 2005 amounting toRs.22,302/- was not paid.E

3.3 The tenant filed objection to the application and contendedthat rate of rent is Rs.1,000/- per month. It was further pleaded thatat the time of taking shop in question, no other condition was agreedor settled. However, the signatures were obtained on some blank paperas security by the landlord, which appears to have been fabricated asFalleged rent note. The tenant claimed to have paying the rent@Rs.1,000/- per month till February, 2006, after which landlord refusedto accept the rent.

3.4 The copy of the rent note dated 27.07.1993 was brought onthe record as Exh. A-1. The Rent Controller held Exh.A-1- rent deedGas proved. The Rent Controller held that rent note – Exh.A-1 is notsigned by both the parties. The Rent Controller further held thatalthough time is not specified, but it is not a lease deed, so notcompulsorily registrable. The Rent Controller also held that tenant wasliable to pay the house tax.The respondent tendered rent @Rs.2,000/-w.e.f. 28.01.2004, which was accepted under protest. The RentHController held that tenant was in arrears of rent and house tax so the respondent-tenant is liable to eviction from the premises in dispute. TheRent Controller held that there exist relationship of landlord and tenantbetween the parties. The Rent Controller allowed the application of theappellant and directed eviction of the respondent from the premises inquestion.

3.5 An appeal was filed by the tenant against the order of theRent Controller. The Appellate Court did not agree with the findingsof the Rent Controller that document Exh. A-1 was not compulsorilyregistrable. Appellate Court observed that perusal of the documentExh.A-1 reveals that there would be increase in the rent to the tune of10% every year, hence the document was not executed for a periodof less than a year rather the intention of the parties is clear that itwas executed for more than one year, hence the document was requiredto be registered under Section 17(1)(d) of the Registration Act, 1908.However, the Appellate Court rejected the claim of the tenant that rateof rent was Rs.1,000/- only. The Appellate Court after holding thatdocument was compulsorily registrable took the view that the clauseregarding 10% yearly increase cannot be relied and judgment of RentController was accordingly set aside and the appeal was allowed.

3.6 The appellant aggrieved by the order of the Appellate Courtfiled a revision before the High Court. The High Court dismissed therevision referring to the finding of the Appellate Court that rent note –Exh.A-1 was compulsorily registrable. The case of the landlord toenforce condition in lease deed regarding increase of the rent was notrelied. Aggrieved by the said judgment, this appeal has been filed.

4. We have heard learned counsel appearing for the appellant.No one appeared for the respondent, though served.

5. Learned counsel for the appellant in support of the appealcontends that rent note dated 27.07.1993, which was signed by the tenantwas valid Rent note and was covered within the definition of lease asgiven in the Registration Act, 1908. The document was not registrableunder Section 17(1)(d). It is further contended that the Appellate Courthas without recording the finding that there was no default on the partof tenant in payment of rent and house tax has set aside the order ofthe Rent Controller.

6. We have considered the submissions of the learned counselfor the appellant and has perused the records.

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A7. First issue, which has arisen for consideration in this appeal isas to whether the rent note dated 27.07.1993, which is brought onrecord as Annexure P-3 to the appeal was a document, which requiredcompulsory registration under Section 17(1)(d) of the Registration Act,1908. The second issue to be considered is as to whether the AppellateCourt could have set aside the decree of eviction without recordingBfinding that there was no default on the part of the tenant in paymentof rent and house tax etc. and the amount deposited by the tenant wassufficient to save him from eviction.

8. The Registration Act, 1908 contains the definition of a “lease”under Section 2(7), which is to the following effect: -C

“(7) “lease” includes a counterpart, kabuliyat, an undertaking tocultivate or occupy, and an agreement to lease;”

9. We may notice that in the present case, the rent note is notclaimed to be signed by the landlord-appellant rather it is signed onlyDby the respondent-tenant. The trial court after considering materialson record has returned the findings that appellant has proved the rentnote. The case of the respondent that appellant has got his signatureson a blank paper has not been accepted. RW1- Surinder Singh,respondent in his cross-examination has admitted his signatures on therent note. The trial court also held that by virtue of clause (9) of theErent note, the respondent is liable to pay increased rate @10% everyyear and further he was liable to pay house tax. Landlord having paidthe house tax, he was entitled to recover the house tax from therespondent.

10. Section 17(1)(d) of the Registration Act deals with documentsFof which registration is compulsory. Section 17(1)(d), which is relevantfor the present case and has been relied by the Appellate Court is asfollows: - “17. Documents of which registration is compulsory.—(l)The following documents shall be registered, if the property toGwhich they relate is situate in a district in which, and if they havebeen executed on or after the date on which, Act No. XVI of1864, or the Indian Registration Act, 1866, or the IndianRegistration Act, 1871, or the Indian Registration Act, 1877, orthis Act came or comes into force, namely:—

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(d) leases of immovable property from year to year, or for anyterm exceeding one year, or reserving a yearly rent;”

11. As per Section 17(1)(d), leases of immovable property fromyear to year, or for any term exceeding one year, or reserving a yearlyrent requires compulsory registration. Whether the rent deed can betreated to be a lease of immovable property – (i) from year to year,(ii) for any term exceeding one year, (iii) or reserving a yearly rent?

12. We need to notice the relevant clauses of the rent deed tofind out as to whether Section 17(1)(d) was applicable in the facts ofthe present case making Exh.A-1 compulsorily registrable. Theagreement/rent deed, which is written and signed by the respondentalone contains 16 clauses, which were promises made by the respondentwritten in the rent deed. Clause 1 to 3, 9, 10, 14, 15 and 16, which arerelevant, are as follows: - “1) I will make the payment of the sum of Rupees 2,000/- (TwoThousand only) each month in advance in cash currency up todate 5 (Five) to the owner of the shop, Sri Chand.

2) The rent deed will be applicable from 28.07.1993

3) The amount of the house tax and the electricity bills regardingthe abovesaid shop will be paid by me.

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9) I will be bound for making the payment of the rent money byincreasing 10% (ten percent) each year.

10) If I may not make the payment of the rent up to the prescribeddate in advance and then there will be right to the shop ownerthat he can get the shop vacated.

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14) I have paid the amount of Rupees 3600/- (Three ThousandSix Hundred only) to the shop owner as a security, vacating theshop, handing over the possession to the shop owner, I will beentitled for the refunding of this security amount.

15) If the shop owner is in need of this shop and then servingthe notice of one-month period, he can get the shop vacated fromme, there will be no objection to me in this regard.

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A16) If in any situation, I may not comply with this agreement/rent deed and then there will be right to the shop owner thatvacating the shop forcible, he can take over the possession fromme and may dispossess me, there will be no objection and claimof mine or any of my legal heir.”

B13. Clause (1) of the rent deed specifically makes it clear thatmonthly tenancy was created on payment of rent of Rs.2,000/- permonth. The payment was to be made before 5[th] of each month to theowner. The rent deed does not provide for any specific period forwhich the rent deed was executed. When a rent deed/lease deed doesnot provide for a period and when it provides for payment of rentCmonthly, whether tenancy can be treated from year to year or for anyterm exceeding one year or reserving a yearly rent? The rent deeddoes not reserve yearly rent, hence the third condition as noted aboveis not applicable. The rent deed is not also a lease of immovable propertyfrom year to year. There is no mention in the rent deed that it is aDlease from year to year, hence the said condition is also not applicable.

14. Only clause which need to be, thus, considered is as towhether the rent deed was “for any term exceeding one year”. Thepresent is a case where rent deed does not prescribe any period forwhich it is executed. When the lease deed does not mention the periodof tenancy, other conditions of the lease/rent deed and intention of theEparties 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 relevantto 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 ifthe owner is in need of shop, he by serving notice of one month canFget the shop vacated. This Court had occasion to consider the provisionof Section 106 of the Transfer of Property Act, 1882 and noted therule of construction, which is to be applied when there is no periodagreed upon between the parties in a lease deed. In Ram Kumar DasVs. Jagdish Chandra Deo, Dhabal Deb and Another, AIR 1952SC 23 after quoting Section 106 of the Transfer of Property Act, 1882,Gthis Court held that when there is no period agreed upon between theparties, duration has to be determined by referring to the purpose andobject with which the tenancy is created. Following observations weremade: - “13. The section lays down a rule of construction which is to beHapplied when there is no period agreed upon between the parties.

SIRI CHAND (DECEASED) THR. LRS. v. SURINDER SINGH[ASHOK BHUSHAN, J.]

In such cases the duration has to be determined by reference tothe object or purpose for which the tenancy is created. The ruleof construction embodied in this section applies not only toexpress leases of uncertain duration but also to leases impliedby law which may be inferred from possession and acceptanceof rent and other circumstances. It is conceded that in the casebefore us the tenancy was not for manufacturing or agriculturalpurposes. The object was to enable the lessee to build structuresupon the land. In these circumstances, it could be regarded as atenancy from month to month, unless there was a contract tothe contrary……………………………………”

15. This Court further held that “it has no doubt been recognisedin several cases that the mode in which a rent is expressed to be payableaffords a presumption that the tenancy is of a character correspondingthereto. Consequently, when the rent reserved is an annual rent, thepresumption would arise that the tenancy was an annual tenancy unlessthere is something to rebut the presumption.”

16. Clauses of the rent note makes it clear that there was acategorical promise that tenancy is a monthly tenancy and rent is paidevery 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 rentmoney by increasing 10% each year, that was promise by the tenantto increase the rent by 10% each year for the period of tenancy, thoughthe period of tenancy was unspecified. Clause (9) may or may notoperate in view of specific clauses reserving right of landlord to evictthe tenant on committing default of non-payment of rent by 5[th] of everymonth or when landlord requires shop by giving one month’s notice.Clause (9) was a contingent clause which binds the tenant to increasethe rent by 10% each year, which was contingent on tenancy to continuefor more than a year, but that clause cannot be read to mean that thetenancy was for a period of more than one year. We may notice ajudgment of Allahabad High Court in Kashi Nath and Ors. Vs. AbdurRahman Khan and Ors., AIR 1922 All. 54. Allahabad High Courthad occasion to consider an agreement where defendant had contractedto pay eight annas a year as a rent of the site. Section 17 of theRegistration Act, 1866 was also referred to and relied by the HighCourt. The High Court held that when the terms of the lease arelooked at, one sees that though in fact it might continue for an undefinednumber of years, there was no certainty that it would last for more AB

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Athan one year, hence lease was held not exceeding a term of one year.Following was held by the High Court:- “……………………………………The terms of the kabuliyathave been read to us. Shortly, they are to the effect that theZamindar let the site to Sheo Prasad on a payment of eight annasBa year and incidental obligations but the kabuliyat provided thatif the eight annas was not paid in any one year, or if the tenantfailed to make the incidental payments for marriages et cetra,the lease would thereby some to an end. Furthermore, the leasewould also come to an end if the lessee did not conduct himselfproperly towards the Zemindar. Therefore, when the terms ofCthe lease are looked at one sees that though in fact it mightcontinue for an undefined number of years, there was nocertainty that it would last beyond the term of one year.Therefore, it did not come within the classification of Section17(d) as being a lease for a term exceeding one year. That beingDso, it was not a document which had compulsorily to beregistered……………………………….”

17. We may notice another judgment of Lahore High Court inMengh Raj Vs. Nand Lal and Ors., AIR 1939 Lah.558. In theabove case, in the lease, rate of rent was payable per mensem, conditionEof payment of annual rent was also mentioned there. The High Courtnoted the condition of the lease and has also applied the provisions ofSection 17(1)(d) of the Registration Act, 1908 and held that the saidlease was not registrable. In paragraph 1 of the judgment, the contentsof the lease have been quoted, which are to the following effect: - F“……………………The main provisions of the lease in questionmay be translated as follows:

We, Nand Lal and Murli, sweepers of Hazro, have taken on renta house from MenghBaj of Hazro on condition of payment ofan annual rent of Rs. 40-8-0 for a period of one year certain.GWe agree that we will live as tenants in this house and will payrent at the rate of Rs. 3-6-0 per mensem, month by month on areceipt being granted to us by the landlord. In default of paymentof rent the landlord can eject us and recover arrears of rent inany manner he likes. After the expiry of the term it will be theoption of the landlord to give the house to us on rent or eject usHand give it to other tenants. We will have no objection to this.

The term of the lease is from the 1st Har, Sambat 1984 to theend of Jeth, Sambat 1985. We have been tenants under thelandlord for a long time and have been paying rent.”

18. After considering the conditions of the lease and referring toSection 17(1)(d), the High Court laid down following in paragraph 3: - “3. On a construction of the above deed it is obvious that it isnot a lease from year to year, nor for a term exceeding one year,and the sole question is whether or not by it a yearly rent hasbeen reserved which brings it within the letter of the Section. InMt. Aishan v. Municipal Committee Lahore 92 Ind.Cas. 526Campbell J. held that a mere recital of an annual rate of rentdid not constitute the lease, a lease reserving a yearly rent withinthe meaning of Section 17, Registration Act. The lease in thatcase was determinable at any time at the will of the landlord. Inthe present case after the expiry of one year for which the leasewas granted, this lease too was determinable at the end of Jeth,Sambat 1985. In this aspect the present lease constituted no morethan a tenancy-at-will after the expiry of the first year and soappears to be covered by the decision of Campbell, J. referredto above. There is considerable body of authority for theproposition that where there is a tenancy-at-will created eventhough the rent is fixed and is payable annually, the document isnot subject to compulsory registration. Reference in thisconnexion may be made to Muhammad Masam Khan v. Mt.Bakhtawar (1895) 70 P.R. 1895 where a Division Bench heldon a construction of the document before them that only thoseleases must be registeredwhich are in terms for a periodexceeding one year, a lease reserving a yearly rent, andcontaining no other provision establishing a tenancy-at-will, beingpresumably a lease from year to year.”

19. We may notice that in the above case although the annualrent was mentioned but, however, payment of monthly rent wasmentioned in the lease deed. The rent note, which we are consideringcontains only monthly rent and payment month by month. As per lawlaid down by this Court in Ram Kumar Das(supra) there shall be apresumption that the tenancy in the present case is monthly tenancy.When the clauses of rent note are cumulatively read, the intention ofthe tenant is more than clear that tenancy was only monthly tenancy, A

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Awhich 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 notconfer any right to tenant to continue in the tenancy for a period ofmore than one year nor it can be said that tenancy was created for aperiod of more than one year. Clause (9), which noticed the promiseof the tenant of payment of rent by increasing 10% each year was aBpromise contingent on tenancy being continued beyond one year butcannot make the tenancy year to year or tenancy for a period of morethan one year. Present was a case of tenancy for which no periodwas specified and looking to all the clauses cumulatively, we find thatthe rent note was not such kind of rent note, which requires compulsoryCregistration under Section 17(1)(d).

20. We may further notice that Rent Controller had returned afinding regarding rate of rent @Rs.2,000/- per month and further thetenant was liable to pay the house tax, which was not paid from 1999to 2005 and the decree of eviction was passed accordingly. TheDAppellate Court although accepted the finding of the Rent Controllerthat rate of rent was @Rs.2,000/- and not Rs.1,000/- but merely onthe finding that landlord cannot claim 10% increase of rent every yearsince the document was not registered had allowed the appeal and setside the judgment. There is no specific finding by the Appellate Courtregarding the liability of the tenant to pay the house tax. The AppellateECourt after holding that document-rent deed was compulsorily registrableand having not registered allowed the appeal. No finding was returnedby the Appellate Court that tenant was not in default and tenant hasdeposited the necessary amount to save himself from eviction. We,thus, are of the view that the judgment of the Appellate Court isFunsustainable on the above ground also. We, thus, are of the view thatthe judgment and decree of the Rent Controller directing eviction oughtnot to have been interfered by the Appellate Court.

21. In result, the appeal is allowed. The judgment and decree ofthe Rent Controller directing eviction of the tenant is restored. No costs.

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Ankit Gyan

Appeal allowed.

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