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R.BASKAR BHAT versus HINDUSTAN PETROLEUM CORPORATION LTD

High Court of Madras

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R.Baskar Bhat v. Hindustan Petroleum Corporation Ltd - O.S.A.No.276 of 2000 [2002] RD-TN 207 (28 March 2002)



IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 28/03/2002

CORAM

THE HONOURABLE MR.JUSTICE S.JAGADEESAN AND

THE HONOURABLE MR.JUSTICE P.D.DINAKARAN O.S.A.No.276 of 2000

R.Baskar Bhat .. Appellant versus

Hindustan Petroleum Corporation Ltd.

Regd. Office: Thalamuthu Natarajan Bldg.

8, Gandhi Irwin Road

Chennai-600 008. .. Respondent For Appellant : Mr.R.Gandhi, Senior Advocate for Mr.T.S.Sivagnanam For Respondent : Mr.G.Masilamani, Senior Advocate for Mr.S.Vijayakumar

Appeal against the judgment and decree dated 4.4.2000 made in C.S. No.409 of 1997 passed by this Court.

:JUDGMENT



(P.D.DINAKARAN,J.)

Heard both sides.

2. The appellant is the unsuccessful plaintiff in C.S.No.409 of 1997 laid for a judgment and decree to direct the defendant/respondent herein to (i) deliver possession of the suit properties viz., schedule A, B & C of the plaint; (ii) to pay a sum of Rs.35,000/- as damages for wrongful usage and occupation from 3.6.1997 to 8.7.1997 at the rate of Rs.1000/- per day; and (iii) to pay a sum of Rs.1000/- per day for wrongful usage and occupation of the suit properties from the date of plaint till date of delivery of possession.

3. For the purpose of convenience, the parties are arrayed as per their rank in the suit.

4.1. Admittedly, the land located at old No.24, present No.96, Poonamallee High Road, Madras, originally belonged to one A.T.Kathiresan and the same was leased out by A.T.Kathiresan to the defendant - Corporation for a period of 10 years from 1.7.1954 to 30.6.1964 for a monthly rent of Rs.200/- per month, then renewed from 1.7.1964 to 30.6.1 969 and again renewed from 1.7.1969 to 30.6.1974. But, in the meanwhile, the plaintiff purchased the said site from A.T.Kathiresan under a sale deed dated 10.12.1971.

4.2. When the defendant - Corporation requested the plaintiff, after the sale deed dated 10.12.1971, to execute the lease for the then existing lease period, i.e., till 30.6.1974, the plaintiff was not willing to execute the lease, as the plaintiff wanted to improve his hotel business at No.96, Poonamallee High Road, Madras, but however the plaintiff was prepared to provide an alternate site with required superstructures at Thirumangalam Village, near Koyambedu Market. Accordingly, the plaintiff who is the absolute owner of the suit properties described in schedule A, B and C of the plaint of a total extent of 7 135 sq.ft., agreed to lease out the property to the defendant Corporation; and thus both the plaintiff and the defendant Corporation entered into a lease agreement dated 27.1.1997.

4.3. The defendant - Corporation agreed to pay monthly rent of Rs.200 0/- initially for 30 years, i.e., from 1.2.1997 to 31.1.2027 and thereafter to pay a sum of Rs.4000/- per month for the next 30 years, i. e., from 1.2.2027 to 31.1.2057, and the said monthly rent shall be paid on or before 10th day of each succeeding English calendar month. 4.4. The following are the relevant terms of the lease agreement dated 27.1.1997:

1. The lessee do hereby covenant with the lessor as follows: (i)to pay the rent reserved on the day and in the manner aforesaid. 2. The lessor hereby covenants with the lessee as follows: (i) to (iv) ..

(v) on the written request of the lessee made before the expiry of the term hereby created and if there shall not at the time of such request be any existing breach or non-observance of any of the covenants on the part of the lessee herein contained to grant to the lessee a further lease of the demised premises for the further one terms of 30 years from the expiration of the said term of sixty years at mutually negotiable rent and containing the like covenants and provisions as are herein contained. 3. Provided always and it is hereby agreed and declared as follows: (i) to (iii) ...

(iv) if the rent hereby reserved or any part thereof shall be in arrears (after being demanded) for a period of 60 days or if and whenever the lessee shall fail to duly observe and perform any of the covenants or conditions herein contained and such failure shall continue for 30 days after notice thereof to the lessee, it shall be lawful for the lessor to re-enter upon the demised premises or any part thereof in the name of the whole and immediately thereupon this demise shall cease and determine. (v) to (viii)

(ix) any notice to be given by the lessor to the lessee under this lease shall be deemed to have been duly given if served at the lessee s office in Chennai, any notice to be given by the lessee to the lessor shall be deemed to have been duly given if dispatched by registered post to the last known address of the lessor.

4.5. The plaintiff, by a letter dated 2.4.1997, requested the defendant - Corporation for the rent due for the months February and March, 1997, alleging that the defendant - Corporation did not remit the rent as per the terms of the lease agreement dated 27.1.1997. Thereafter, the plaintiff issued legal notice on 2.7.1997 and determined the lease as ceased to exist and called upon the defendant - Corporation to handover possession to the plaintiff, failing which, rendering the defendant - Corporation liable to pay damages for wrongful usage and occupation at Rs.1000/- per day from 3.6.1997. Followed by the said legal notice dated 2.7.1997, the plaintiff filed the said suit on 9.7.1997 for the relief as prayed for.

5.1. The defendant - Corporation denied the allegations of the plaintiff and contended that the plaintiff never handed over the original lease agreement dated 27.1.1997 on 19.2.1997; nor made a request on 2 .4.1997 for the rent due for the months February and March, 1997. According to the defendant - Corporation, even though the lease agreement was executed and registered on 27.1.1997, the plaintiff completed the superstructure, as agreed by them in the suit property, and handed over the suit property on 24.3.1997 and that the bunk was shifted from No.96, Poonamallee High Road, to the suit property only on 26.3.1 997, and therefore, the defendant - Corporation is liable to pay the rent only from April, 1997.

5.2. If the date of taking possession, viz., 24.3.1997 or the date of shifting the bunk, viz., 26.3.1997, are taken as relevant dates for the rent payable by the defendant - Corporation, the rent for the period till 30.3.1997 falls due only by 10.4.1997 and therefore, there is no cause of action on 2.4.1997, when the plaintiff is said to have made a request for the arrears of rent for the months February and March, 1997. 5.3. Without prejudice to the above contentions, assuming the defendant Corporation is liable to pay the rent for the months February and March, 1997, immediately on receipt of the demand by the legal notice dated 2.7.1997, the defendant - Corporation sent a cheque dated 4.7.1997 for a sum of Rs.12,000/- towards rent for the period February to July, 1997, on 7.7.1997, by registered post, in compliance of clause 3(iv) of the lease agreement dated 27.1.1997, to show their bona fide, but the same was returned with an endorsement NOT FOUND IN MY DELIVERY TIME RETURNED TO SENDER; and also replied on 26.7.1997 that the claim of the plaintiff under the legal notice dated 2.7.1997 could not be complied with as the same is not bona fide. The defendant Corporation resisted the suit accordingly.

6. Upon the above rival contentions, the learned judge framed the following relevant issues:

(i)Whether the lease dated 27.1.1997 by the plaintiff to the defendant has come to be terminated by operation of covenant in para 3 of the page 11 of the lease deed?

(ii)Whether the defendant has rendered itself for delivery of possession? (iii)Whether the defendant is liable to pay Rs.1000/- per day for wrongful usage and occupation from the date of plaint viz., 9.7.1997? (iv)Whether this Honble Court has jurisdiction to try this suit? (v)Whether the suit is properly valued and the court fee paid is correct? 7. The plaintiff examined himself as P.W.1 and marked the following relevant documents on his behalf:

Ex.P1 Lease agreement dated 27.1.1997.

Ex.P2 Letter dated 2.4.1997 demanding the rent. Ex.P3 Letter dated 19.2.1997 to show that the original lease deed was also entrusted to the defendant - Corporation. Ex.P4 Legal notice issued by the plaintiff dated 2.7.1997 Ex.P5 Reply of the defendant - Corporation dated 26.7.1997 8. The Chief Manager, of the defendant - Corporation, who is also a signatory to Ex.P1, lease agreement dated 27.1.1997, was examined as D.W.1, and marked the following relevant documents on their behalf: Ex.D1 Letter dated 7.7.1997 from the defendant to the plaintiff enclosing a Cheque bearing No.577583, dated 4.7.1997 for Rs.12,000/- and postal endorsement for return of the post NOT FOUND IN MY DELIVERY TIME RETURNED TO SENDER

Ex.D2 Letter dated 28.7.1997 from the defendant - Corporation to the plaintiff requesting for the original lease agreement dated 27.1.1997 and also confirming the return of registered letter with cheque.

Ex.D4 Lease agreement dated 27.1.1997.

9. The learned judge appreciating both oral and documentary evidence adduced by either side, by his judgment and decree dated 4.4.2000, even though held that this Court has got jurisdiction to entertain the above suit and that the valuation of the suit and the court fee paid by the plaintiff are correct, finding that the defendant - Corporation had sent the entire amount due to the plaintiff, by way of cheque on 7.7.1997, immediately after receipt of the legal notice dated 2.7.1997 from the plaintiff, and that the defendant Corporation is entitled for the benefit under Section 114 of the Transfer of Property Act, answered the issues in favour of the defendant Corporation, refused to grant the relief as prayed for, and dismissed the suit. Hence the above appeal.

10. Mr.R.Gandhi, learned senior counsel for the plaintiff, reiterating the contentions of the plaintiff argues that: (i)as per Clause 3(ix) of the lease agreement dated 27.1.1997, the lette'r dated 19.2.1997 from the plaintiff, forwarding the original lease agreement, marked as Ex.P3 and the letter dated 2.4.1997, requesting the rent due from the defendant for the months February and March, 1997, marked as Ex.P2, are deemed to have been duly served on the defendant at the office of the defendant in Chennai, in view of the affixture of the rubber stamp of the office of the defendant, and therefore, the notice of the said letters amounts to a valid notice of ejectment within the meaning of Section 106 of the Transfer of Property Act, and the Court could not read it in a hyper-critical manner, as held in KUNJ BEHARI V. ACHARYA HARI reported in AIR 1975 RAJASTHAN 138; (ii)the conduct of the defendant as to the non-payment of rent for the months of February and March, 1997, as per the terms of the lease agreement dated 27.1.1997, amounts to forfeiture of tenancy, and therefore, there is no necessity for the plaintiff to give a notice for terminating the tenancy. In this regard, learned senior counsel places reliance on the decision in GEETHA BAI V. B.D.MANJREKAR reported in AIR 1984 BOMBAY 400;

(iii)assuming the defendant had not received the original lease deed dated 27.1.1997 on 19.2.1997 and had shifted the petrol bunk only on 26.3.1997, neither the non-furnishing of the original lease agreement dated 27.1.1997, nor the shifting of the petrol bunk on 26.3.1997, would be relevant to enforce the terms of the lease agreement dated 27 .1.1997, which came into force from the date of execution by the plaintiff and the defendant, viz., on 27.1.1997, in as much as the building plan was approved as early as on 14.8.1996 and the Commissioner of Police granted no objection certificate for shifting the petrol bunk on 13.1.1997 itself, viz., prior to the execution of the lease agreement dated 27.1.1997, pursuant to which construction had already been commenced in the suit premises, and consequently, the defendant is liable to pay the rent consciously and unambiguously, as agreed between the parties, viz., from 1.2.1997, which term cannot be permitted to be altered by either side, as the words of the contract are clear in this respect, and there is very little for the Court to do about it, as held by the Apex court in PROVASH CHANDRAS & ANOTHER Vs. BISWANATH BANNERJI & ANOTHER reported in AIR 1989 SC 1834; and therefore, the defendant is liable to pay the rent for the months of February and March, 1997 as per the lease agreement dated 27.1.1997, and the plaintiff is justified to determine the lease by his legal notice dated 2.7 .1997, marked as Ex.P4, and to re-enter the suit property and to take possession of the same, based on his request for the payment of rent under the letter dated 2.4.1997, marked as Ex.P2. (iv)the defendant Corporation having committed default in payment of the rent for the months February and March, 1997, by their own conduct, in spite of the request of the plaintiff dated 2.4.1997, marked as Ex.P2, violating clause 3(iv) of the lease agreement dated 27.1.19 97, are not entitled to seek equity nor the benefit of Section 114 of the Transfer of Property Act, on the ground that they had not been furnished with the original lease agreement dated 27.1.1997. Reliance is placed on the decision of the Apex court in HINDUSTAN PETROLEUM CORPORATION LTD. Vs. CHANDRA PRAKASH BUBNA reported in 1995 SUPP. (3) SCC 167, in this regard;

(v)the defendant, having failed to pay the rent for February and March, 1997 as per the lease agreement dated 27.1.1997 and thus committed default, have not come with clean hands to seek the defence under equity placing reliance on Section 114 of the Transfer of Property Act, as held in NARSINGH DAS Vs. PARAMESHWARI DAS (DB) reported in AIR 19 62 ALLAHABAD 65, and in R.P.RAI Vs. RAGHUNATH PRASAD reported in AIR 1974 ALLAHABAD 72;

(vi)the lease in favour of the defendant came to an end on default of the payment of rent for the months of February and March, 1997, and by the conduct of the defendant himself, the lease got determined, and therefore, the plaintiff is entitled to institute a suit for ejectment of the lease without giving notice to the defendant-lessee, and no rule of justice, equity and good conscience would be invoked in the case of such lessees who seek the benefit of Section 114 of the Transfer of Property Act, as held in Relying on the decision in NAMDEO LOKMAN LODI V. NARMADA BAI AND OTHERS reported in 1953 SCR 1009; and (vii)in any event, the payment of rent by way of cheque dated 4.7.199 7 after the legal notice dated 2.7.1997, would not cure the deliberate default of the defendant in payment of rent for the months of February and March, 1997 and the violation to Clause 3(iv) of the lease agreement, which, by itself, terminates the lease and entitles the plaintiff-lessee to re-enter upon the said premises and take possession of the same as per clause 3(iv) of the lease agreement dated 27.1.1997 . 11. Per contra, Mr.G.Masilamani, learned senior counsel for the defendant, relying on the evidence on record as well as the findings of the learned single judge, contends that:

(i)when the evidence of D.W.1 that the defendant Corporation took possession of the suit property on 24.3.1997 and the petrol bunk was shifted to the suit property only on 26.3.1997 from the old premises at Door No.96, Poonamalle High Road, Madras, which was handed over to the plaintiff by 31.3.1997 as per Ex.D3, are not rebutted, and when there is a dispute as to the handing over of the possession of the subject, it is for the plaintiff landlord to prove that he has discharged his obligation to put the tenant in possession before he can enforce the tenants obligation to pay rent, and hence, the landlord must not only show that the tenant is in possession of the subjects of the lease, but that such possession was attributable to the lease or might be so, as held by their Lordships of Privy Council in JOGESH CHANDRA Vs. EMDAD MEAH reported in AIR 1932 PRIVY COUNCIL 28; (ii)the delivery of possession of property leased is necessary, or otherwise, the lessee could raise the defence that the possession being not given, he is not liable to pay the rent, and therefore, the onus of delivery of possession lies on the plaintiff/lessee before claiming the rent for the lease, as held in GANDA SINGH V. SECY. OF STATE reported in AIR 1934 Peshawar 101 and MANOHAR LAL V. BENGAL POTTERIES reported in AIR 1953 PATNA 457,.

(iii)while the acknowledgement of the letter dated 2.4.1997, marked as Ex.P3 and the letter dated 2.4.1997, marked as Ex.P2 were strongly disputed by the plaintiff for want of signature on the seal of the defendant, the plaintiff/lessor is not entitled for the rent for the months February and March, 1997, as the defendant-lessee was put in possession of the suit property only on 26.3.1997, and consequently, no arrears of rent falls due for a period of 60 days as on 2.4.1997, giving a cause of action to the plaintiff under Ex.P2 dated 2.4.1997 to claim the rental dues for the months of February and March, 1997. Consequently, clause 3(iv) of the lease agreement is neither attracted nor violated, and as a result, the plaintiff is not entitled to seek for payment of rent for the period February and March, 1997, even without handing over possession of the suit property to the defendant/ lessee during the period February and March, 1997, and such a demand would, otherwise, amount to unjust enrichment, which is opposed to the principles laid down under Sections 69 and 70 of the Indian Contract Act. (iv)Since the rent due for the months of February and March, 1997 was a dispute due to the delay in handing over possession of the suit property and occupancy of the same by the defendant, it would be against equity, justice, and good conscience to order the defendant to be evicted, instead of granting relief against forfeiture, invoking Section 114 of the Transfer of Property Act, as held by a Division Bench of this Court in VELLATHI V. SMT.K.K.THAYAMMAL reported in AIR 1958 Madras 232 and PALANISWAMY V. KANDAPPA GOUNDAR reported in AIR 1968 Madras 96; (v)the conduct of the defendant in paying the entire arrears of rent, including the rent for the months of February and March, 1997, even though the defendant is not at all liable, by way of cheque bearing No.577583, dated 4.7.1997, by their letter dated 7.7.1997, marked as Ex.D1, immediately after the receipt of the notice dated 2.7.1997, satisfies the requirements of making the payment of arrears within thirty days from the date of notice of demand as contemplated under clause 3(iv) of the lease agreement dated 27.1.1997, and therefore, the defendant Corporation is entitled for the equitable relief against forfeiture of tenancy for the alleged non-payment of rent as per Section 114 of the Transfer of Property Act, without insisting on compliance with technical requirements of Section 114 of the Transfer of Property Act, as held in GURU NANAK SOCIETY Vs. STATE OF HARYANA & OTHERS reported in AIR 1972 PUNJAB & HARYANA 83, which was also followed in RAMESWAR BORA Vs. DAKSHINPAT SATRA reported in AIR 1990 GAUHATI 81; (vi) finding and the decision of the learned single Judge, that the possession of the suit property was handed over by the plaintiff to the defendant only on 24.3.1997, is based on the materials as well as the conduct of the parties, and therefore, the demand for the rent for the months February and March, 1997 under the letter dated 2.4.19 97 is not sustainable, and consequently, the defendant is entitled for the relief against the forfeiture as per Section 114 of the Transfer of Property Act;

(vii)in any event, since the finding and the decision of the learned Single Judge, had been made in exercise of the equitable discretion, especially when the plaintiff failed to rebut the evidence of the defendant lessee that he had been put in possession of the demised premises only on 26.3.1997, the defendant is not liable to pay the rent for the months of February and March, 1997, as held by the Apex Court in PRADUMAN KUMAR Vs. VIRENDRA GOYAL reported in AIR 1969 SC 1349. 12. We have bestowed our consideration to the submissions of both sides and are obliged to decide on the following vital issues: (i)Whether the rent for the months of February and March, 1997, fell due on 2.4.1997, as claimed by the plaintiff by letter dated 2.4.1997 giving him a cause of action 2.4.1997, and if so, whether the defendant is liable to pay the same?

(ii) Whether the defendant, assuming there was a delay in payment of the rent for the months of February and March, 1997, irrespective of the delivery of possession of the suit premises to the defendant on 26.3.1997, is entitled for the equitable relief against forfeiture of tenancy under Section 114 of the Transfer of Property Act, 1882? (iii)Whether any interference is required with the equitable discretion exercised by the learned Single Judge?

13.1. Issue: 1 - Whether the rent for the months of February and March, 1997, fell due on 2.4.1997, as claimed by the plaintiff by letter dated 2.4.1997 giving him a cause of action 2.4.1997, and if so, whether the defendant is liable to pay the same?

13.2. The service of both the letters of the plaintiff, namely (i) letter dated 19.2.1997 forwarding the original lease agreement, marked as Ex.P3, and (ii) letter dated 2.4.1997, requesting the rent due from the defendant for the months February and March, 1997, marked as Ex.P2, are seriously disputed by the defendant Corporation. 13.3. Placing reliance on the decision in KUNJ BEHARI V. ACHARYA HARI reported in AIR 1975 RAJASTHAN 138, Mr.R.Gandhi, learned senior counsel contends that the Court cannot analyse the service of the said letters in a hyper-critical manner, so as to find fault in such service on every conceivable ground. The decision in KUNJ BEHARI case ( referred supra) arises under an ejectment suit; but Mr.R.Gandhi, learned senior counsel for the plaintiff contends that the non-payment of rent for the month of February and March, 1997, is, per se contrary to the terms of the lease agreement dated 27.1.1997, and amounts to forfeiture of tenancy, and therefore there is no necessity for the plaintiff to give a notice for terminating the tenancy, placing reliance on the decision in GEETHA BAI V. B.D.MANJREKAR reported in AIR 1984 BOMBAY 400. 13.4. The legal position is that there is a world of difference between the liability of tenant for eviction on the ground of forfeiture of tenancy and his liability on the ground of termination of the tenancy by a notice of termination simpliciter, as held in GEETHA BAI case (referred supra), wherein, forfeiture of tenancy and termination of tenancy by notice are distinguished, as follows:

If the tenancy is to come to an end by virtue of the principle of forfeiture, what is required under the law is that the tenancy should be for a particular period and the lease deed must contain a clause of forfeiture on the ground of breach of certain conditions of the tenancy. If the breach is committed, the tenancy becomes liable for forfeiture even before the expiry of the agreed period of tenancy. If the landlord exercises the right of forfeiture, then the tenancy comes to an end even before the agreed period of tenancy. In such a case no question of notice of termination of tenancy as provided by Section 106 of the Transfer of Property Act arises, although, in certain cases, some kind of notice indicating exercise of the right of forfeiture by the landlord may be advisable. On the other hand, when the lease is not for a particular fixed period but is only a periodical lease like a yearly lease or a monthly lease and if the agreement of tenancy provides that the lease can be terminated by notice of termination as contemplated by Section 106 of the Transfer of Property Act, no question of forfeiture as such arises. Termination of tenancy on account of forfeiture is an entirely different concept, and the Court must bear in mind that the concept of termination of tenancy on account of forfeiture and the concept of termination of tenancy by a notice to quit under Section 106 of the Transfer of Property Act are two distinct and independent concepts. Merely because there exists Section 114 in the Transfer of Property Act, the Court cannot give the benefit of the same to the tenant, forgetting that Section 114 does not come into play unless the forfeiture is incurred by the tenant in pursuance of a forfeiture clause contained in the agreement of lease. 13.5. When the plaintiff himself thus rests his case on the forfeiture of tenancy by the defendant, the ratio laid down in KUNJ BEHARI case (referred supra), to the effect that in a case of ejectment, Court cannot read it in a hyper-critical manner, so as to find fault in every conceivable ground, in our considered opinion, is of no avail to the plaintiff, as we are obliged to consider that irrespective of the receipt of letters dated 19.2.1997 and 2.4.1997, marked as Exs.P3 and P2, respectively, whether the alleged non payment of rent for the months of February and March, 1997, by the defendant-Corporation, amounts to forfeiture of tenancy.

13.6. As per the lease agreement dated 27.1.1997, the lease commenced from 1.2.1997 and the monthly rent shall be paid on or before 10th of each succeeding English calendar month. Clause 3(iv) of the lease agreement dated 27.1.1997 renders a lease forfeited by the lessee if the rent agreed is not paid for a period of 60 days or the lessee fails to observe and perform any of the terms of the agreement dated 27.1.1997, and such failure continues for thirty days after the notice to the lessee, the lessor is entitled to re-enter upon the demised premises, determining the lease as ceased. For more clarity, we are obliged to reproduce clause 3(iv) of the agreement dated 27.1.1997, as follows: 3. Provided always and it is hereby agreed and declared as follows: (i) to (iii) ...

(iv) if the rent hereby reserved or any part thereof shall be in arrears (after being demanded) for a period of 60 days or if and whenever the lessee shall fail to duly observe and perform any of the covenants or conditions herein contained and such failure shall continue for 30 days after notice thereof to the lessee, it shall be lawful for the lessor to re-enter upon the demised premises or any part thereof in the name of the whole and immediately thereupon this demise shall cease and determine. (Emphasis supplied).

13.7. It is an accepted principle of construction that the sense and meaning of the parties in any particular part of instrument may be collected ex antecedentibus et consequentibus; every part of it may be brought into action in order to collect from the whole one uniform and consistent sense, if it is possible, as held by the Apex Court in PROVASH CHANDRAS & ANOTHER Vs. BISWANATH BANNERJI & ANOTHER reported in AIR 1989 SC 1834, and in construing a contract, the Court therefore, must look at the words used in the contract unless they are such that one may suspect that they do not convey the intention correctly. If the words are clear, there is very little the Court can do about it.

13.8. If that be so, the intention of the parties to the lease agreement dated 27.1.1997, namely the plaintiff and the defendant, as expressly provided under clause 3(iv) of the lease agreement, deserves to be given effect to in spirit and substance. As per clause 3(iv) of the agreement dated 27.1.1997, it shall be lawful for the lessor to re-enter upon the demised premises or any part thereof determining the lease as ceased, under the following conditions:

(i)if the rent hereby reserved or any part thereof shall be in arrears (after being demanded) for a period of 60 days;

or

if and whenever the lessee shall fail to duly observe and perform any of the covenants or conditions contained in the agreement; and (ii)such failure shall continue for 30 days after notice thereof to the lessee.

13.9. In our considered opinion, unless both the conditions are qualified, it would not be lawful for the lessor to re-enter upon the demised premises or any part thereof, in view of the word and unambiguously and expressly agreed and used between the parties in clause 3( iv) of the lease agreement dated 27.1.1997. In other words, the mere arrears of rent for a period of 60 days after being demanded, or the failure to perform or observe any part of the terms of the agreement alone would constitute a forfeiture of the ten ancy by the defendant, unless such failure continue for 30 days after notice thereof to the lessee.

13.10. Assuming the letter dated 2.4.1997 is not to be construed as a notice of ejectment for the purpose of Section 106 of the Transfer of Property Act, we are obliged to decide whether the letter dated 2.4.1997, marked as Ex.P2, can be construed as a notice of demand by the lessor to the lessee for the arrears of rent for the months of February and March, 1997, within the meaning of clause 3(iv) of the lease agreement.

13.11. Even though Exs.P2 and P3 contain the alleged seal of the defendant Corporation, they do not contain the signature of any of the employees of the defendant Corporation in acknowledgement of the same. When D.W.1 specifically and categorically denies the receipt of Exs.P2 and P3 to the effect that the defendant Corporation never received Ex.P2 - letter dated 2.4.1997 and Ex.P3 letter dated 19.2.1 997, we are unable to accept the contention of the plaintiff that by Ex.P2 letter dated 2.4.1997, the plaintiff had served notice on the defendant with regard to the arrears of rent for the months of February and March, 1997, as contemplated under

clause 3(iv) of the lease agreement and to hold that the defendant have forfeited the tenancy as they continued to commit the default in payment of rent for the months of February and March, 1997, in spite of the receipt of the notice dated 2.4.1997, as the said letter dated 2.4.1997 could not be deemed to have been duly served on the lessee s office at Chennai for want of signature by the employees of the defendant Corporation in acknowledgment of the same, in compliance of clause 3(iv) of the lease agreement dated 27.1.1997.

13.12. On the other hand, the letter dated 19.3.1997, marked as Ex. D3, is the admitted correspondence between the plaintiff and the defendant Corporation, which contains a signature of P.W.1, and the contents of the same are also deposed as true by P.W.1. Ex.D3 is a letter sent by P.W.1 by the plaintiff and admittedly acknowledged by the defendant Corporation, which reads as follows:

"UDIPI HOTEL SUDHA

97, Poonamallee High Road, Chennai 600 084.

R. BHASKAR BHAT, PROPRIETOR

To 19.3.97

The Chief Regional Manager

Hindustan Petroleum Corporation Ltd.

Thalamuthu Natarajan Building

Madras.

Ref: PKK/RET/Lease letter dated 5.3.97

With reference to your above letter dated 5.3.1997, we are herewith enclosing the Memorandum of Understanding duly signed by me. I request you to take further necessary action, and ensure to deliver the vacant possession of the site to us by 31.3.1997. Thanking you,

Yours sincerely,

Sd/-

R.Bhaskar Bhat.

The above contents of Ex.D3 would prove the case of the defendant that the defendant Corporation could able to shift the petrol bunk from the old premises at No.96, Poonamallee High Road, Madras, to the suit property only after 19.3.1997 and the plaintiff failed to perform his part of obligation in handing over the suit property to the defendant Corporation till 19.3.1997, as per the lease agreement dated 27.1.1997. The plaintiff, having failed to perform his part of obligation till March, 1997, in our considered opinion, assuming the letter dated 2.4.1997 was served on the defendant Corporation, the defendant Corporation is not entitled to demand the rent for the months of February and March, 1997, from the defendant Corporation, as it is well settled in law that, where there is a dispute as to the handing over of the possession of the subject, it is for the landlord to prove that he has discharged his obligation to put the tenant in possession before he can enforce the tenants obligation to pay rent, and hence, the landlord must not only show that the tenant is in possession of the subjects of the lease, but also that such possession was attributable to the lease, as held in JOGESH CHANDRA Vs. EMDAD MEAH reported in AIR 1932 PRIVY COUNCIL 28, as rightly pointed out by Mr. G.Masilamani, learned senior counsel for the defendant Corporation.

13.13. Admittedly, in the instant case, the delivery of the possession of the suit property by the plaintiff to the defendant Corporation immediately on the date of execution of the lease agreement dated 27.1.1997, even though is seriously disputed, is not proved by the plaintiff. Since the plaintiff have thus failed to discharge his onus of delivery of possession, the defendant is not liable to pay the rent for the months of February and March, 1997, applying the ratio laid down in GANDA SINGH V. SECY. OF STATE reported in AIR 1934 Peshawar 101, in our considered opinion, no arrears of rent for 60 days fell due on 2.4.1997, namely on the date of Ex.P2, assuming the same is served on the defendant. The plaintiff having failed to discharge his burden of proving the delivery of possession, which is a condition necessary for maintenance of an action for rent, is not entitled to seek the relief as prayed for, as held in MANOHAR LAL V. BENGAL POTTERIES reported in AIR 1953 PATNA 457. That apart, such a claim of the plaintiff for arrears of rent for the months of February and March, 199 7 would amount to unjust enrichment attracting Sections 69 and 70 of the Indian Contract Act, 1872.

13.14. Since the plaintiff failed to prove the delivery of possession immediately after the execution of the lease agreement dated 27.1.1 997, and on the other hand, the defendant had substantiated his case that the suit property was delivered only on 24.3.1997 and thereafter the petrol bunk was shifted on 26.3.1997, we are obliged to reject the contentions of Mr.R.Gandhi, learned senior counsel appearing for the plaintiff, that neither the delivery of possession on 24.3.1997 nor the shifting of the petrol bunk on 26.3.1997 are relevant to enforce the terms of the lease agreement dated 27.1.1997, merely for the reason that the building plan was approved as early as on 14.8.1996 and the Commissioner of Police, Chennai, granted no objection certificate for shifting the petrol bunk on 13.1.1997 itself, viz., prior to the execution of the lease agreement dated 27.1.1997. 13.15. For all these reasons, Issue:1 is answered in negative. 14.1. Issue:2 Whether the defendant, assuming there was a delay in payment of the rent for the months of February and March, 1997, irrespective of the delivery of possession of the suit premises to the defendant on 26.3.1997, is entitled for the equitable relief against forfeiture of tenancy under Section 114 of the Transfer of Property Act, 1882?

14.2. The shifting of the petrol bunk to the suit property by the defendant Corporation on 26.3.1997 is not disputed in view of Ex.D3 dated 19.3.1997, and therefore, the defendant's liability to pay the rent for the months of April, May, June, and July, 1997 cannot be disputed. However, the plaintiff had chosen to issue a notice as contemplated under clause 3(iv) of the lease agreement admittedly only on 2 .7.1997 through his counsel, which is marked as Ex.P4 and immediately after the acknowledgement of the same, the defendant Corporation, by registered letter dated 7.7.1997 sent a Cheque bearing No.577583, dated 4.7.1997 for Rs.12,000/- towards the entire arrears of rent claimed by the plaintiff, even though the rent for the months of February and March, 1997 were disputed. But the said registered letter dated 7.7.1997 was returned by the plaintiff. It is therefore clear that the defendant Corporation within thirty days from the notice of payment of arrears, viz. Ex.P4, had rectified their failure. It is under such circumstances, the defendant Corporation seeks the relief against forfeiture under Section 114 of the Transfer of Property Act, 18 82, which reads as follows: "Section 114 - Relief against forfeiture for the non-payment of rent Where a lease of immovable property has determined by forfeiture for non-payment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrears, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had not occured."

14.3. The relief against forfeiture for the non-payment of rent conferred under Section 114 of the Transfer of Property Act, 1882 is based on the principles of common law, restraining action for ejectment for non-payment of rent on the lessee, and such a relief was available in India before the Transfer of Property Act, 1882 came into force, vide KOTTAL UPI Vs. EDAVALATH reported in (1871) 6 Mad HC 258, TIMMARSA Vs. BADIYA reported in (1865) 2 Bombay HC 66, ALUM CHUNDER Vs. MORAN reported in (1864) WR Gap. No.(Act 10 Rulings) 31; and ABLAKH RAI Vs. SALIM AHMAD reported in (1879) 2 Allahabad 437. 14.4. In PRADYUMAN KUMAR Vs. VIRENDRA GOYAL reported in (1969) 3 SCR 950, the Apex Court has held that the covenant of forfeiture for non-payment of rent is regarded by the Courts as merely a clause for securing payment of rent, and unless the tenant has by his conduct disentitle himself to equitable relief, the Courts grant relief against forfeiture of tenancy on the tenant paying the rent due, interest thereon and costs of the suit.

14.5. In the instant case, we are satisfied that the plaintiff had not proved that the defendant Corporation has disentitled themselves to equitable relief; but, on the other hand, the defendant Corporation had satisfactorily proved that the plaintiff had delivered the possession only on 24.3.1997. In any event, immediately on receipt of the notice of arrears of rent dated 2.7.1997, viz. Ex.P4, the defendant Corporation had sent a Cheque bearing No.577583, dated 4.7.1997 for Rs.12,000/-, strictly in accordance with clause 3(iv) of the lease agreement dated 271.1997.

14.6. It is also well settled in law that a person who comes in equity must do equity and must come with clean hands, vide R.P.RAI Vs. RAGHUNATH PRASAD reported in AIR 1974 ALLAHABAD 72 and NARSINGH DAS Vs. PARAMESHWARI DAS (DB) reported in AIR 1962 ALLAHABAD 65. No doubt, the lessee's right should come to an end on default of payment of rent, and, as rent was not duly paid, the lessor instituted a suit for ejectment of the lessee without giving him a notice in writing, as held in NAMDEO LOKMAN LODI V. NARMADA BAI AND OTHERS reported in 1953 SCR 1009. But, in the instant case, on the one hand the plaintiff has not come with clean hands in having committed default in handing over the possession, immediately after the execution of the lease agreement or within a reasonable time thereafter, and on the other hand, clause 3(iv) of the lease agreement dated 27.1.1997 is clear that not only mere arrears of rent for 60 days, but also there should be a continued failure in payment of the arrears for thirty days after the notice by the lessee to constitute the forfeiture of tenancy. If that be so, even though the arrears of rent payable for the months of February and March 1997 was disputed, the payment of entire arrears of rent by issue of Cheque bearing No.577583, dated 4.7.1997 for Rs.12,000 /-, immediately after the receipt of the notice dated 2.7.1997, in our considered opinion, entitles the defendant Corporation to claim the benefit of Section 114 of the Transfer of Property Act, 1882, where the rule of equity, justice and good conscience comes in aid of the defendant, vide: (i) VELLATHI V. SMT.K.K.THAYAMMAL reported in AIR 1958 Madras 232;

(ii)PALANISWAMY V. KANDAPPA GOUNDAR reported in AIR1968 Madras 96;

(iii)GURU NANAK SOCIETY Vs. STATE OF HARYANA & OTHERS reported in AIR 1972 PUNJAB & HARYANA 83, and

(iv) RAMESWAR BORA Vs. DAKSHINPAT SATRA reported in AIR 1990 GAUHATI 81.

14.7. Issue No.2 is answered in positive. 15.1. Issue: 3 - Whether any interference is required with the equitable discretion exercised by the learned Single Judge? 15.2. Under the facts and circumstances and for the reasons discussed above, it is clear that the learned Single Judge, exercised his equitable discretion and granted the relief against the forfeiture applying Section 114 of the Transfer of Property Act, 1882, after having satisfied that the defendant Corporation had made the payment of arrears of rent, assuming if there are any, immediately on receipt of the notice dated 2.7.1997, which has to be construed as the only notice under clause 3(iv) of the lease agreement, based on the materials placed before him and therefore, we do not find any reason to interfere with such discretion exercised by the learned Single Judge on equitable principle. 15.3. Issue No.3 is answered accordingly. Hence, the appeal fails and therefore the same is dismissed. No costs.

(S.J.J.) (P.D.D.J.)

28.03.2002

Index : Yes/No

Internet : Yes

sasi

sd/-

ASSISTANT REGISTRAR

/TRUE COPY/

SUB-ASSISTANT REGISTRAR

To:

The Sub-Assistant Registrar

Original Side, High Court, Madras.

S.JAGADEESAN,J.

AND

P.D.DINAKARAN,J.

O.S.A.No.276 of 2000

28.03.2002




Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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