What is difference between lease and license?

 A lease is a transfer of a right to enjoy immovable property for a certain time in consideration of rent or premium, while a license is only a permission to do something on the property without transfer of any interest.

For Judicial service interview, the safest short distinction is: lease creates an interest in the property and usually gives exclusive possession; license creates no interest and only permits use, generally without exclusive possession.

Print Page

𝗜𝗳 𝗻𝗼 𝗹𝗼𝘀𝘀 𝗰𝗮𝘂𝘀𝗲𝗱 𝘁𝗼 𝘁𝗵𝗲 𝗖𝗹𝗮𝗶𝗺𝗮𝗻𝘁, 𝗹𝗶𝗾𝘂𝗶𝗱𝗮𝘁𝗲𝗱 𝗱𝗮𝗺𝗮𝗴𝗲𝘀 𝘄𝗶𝗹𝗹 𝗻𝗼𝘁 𝗯𝗲 𝗽𝗮𝘆𝗮𝗯𝗹𝗲 𝗲𝘃𝗲𝗻 𝗶𝗳 𝘁𝗵𝗲 𝗥𝗲𝘀𝗽𝗼𝗻𝗱𝗲𝗻𝘁 𝗶𝘀 𝗵𝗲𝗹𝗱 𝘁𝗼 𝗯𝗲 𝗶𝗻 𝗯𝗿𝗲𝗮𝗰𝗵 𝗼𝗳 𝘁𝗵𝗲 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁.

 As per the crystallized legal position, sum ascertained as liquidated damages in the contract is not in the nature of penalty, but is a pre-estimate of loss estimated by the parties likely to be suffered by a party in the event of breach of contract by the other party. Loss must be incurred by a party in order to claim the same. Liquidated damages are not payable merely as a penalty for breach of contract, if no loss is suffered. It is the quantification of loss that would require no further ascertainment by court/tribunal, which would quantify the same as per the pre-estimated loss or formula agreed to by the parties as liquidated damages in the contract. In view of the same, AT's rejection of claim No 3 is consistent with the prevalent legal position. {Para 20}

Ratio: Hon'ble Mr. Justice Manoj Kumar Ohri of the Hon’ble High Court of Delhi upheld the award of the Arbitral Tribunal wherein the inter alia claim for the balance rent for the lock in period was sought by the Claimant on the pre-mature termination of the Contract by the Respondent.

The claim was not granted to the Claimant even though the Respondent was held to be in breach of the Contract as the Claimant could not demonstrate the loss caused to it. The Respondent, rather, demonstrated that the Claimant was able to put the property up for rent the day after the Respondent vacated the premises.

 IN THE HIGH COURT OF DELHI

O.M.P. (Comm.) 266/2023, CAV 377/2023, I.A. 13723/2023, I.A. 13724/2023, I.A. 13725/2023 and I.A. 13726/2023

Decided On: 18.09.2023

Vivek Khanna Vs. OYO Apartments Investments LLP

Hon'ble Judges/Coram:

Manoj Kumar Ohri, J.

Citation: MANU/DE/6307/2023,2023/DHC/6763

Print Page

Whether the court can pass decree the suit or mould the relief on the basis of reneged compromise?

 In view of the aforesaid, a compromise pursis at

Exh.13 duly signed by the parties to the appeal, was

presented before the first appellate Court on 3/9/2020 with

the following prayer therein :

“The appeal be ordered as withdrawn in terms of

the Compromise and the Decree of R.C.S.

No.119/2015 passed by C.J.S.D. (M.C.A.),

Aurangabad on 9.9.2019 be confirmed as per terms

and conditions of this Compromise and oblige.” {Para 25}

26. Thereafter the Law Officer of the AMC submitted a

pursis dated 15/9/2020, whereunder the AMC reneged on the

compromise pursis. The first appellate Court, therefore, did

not endorse the compromise. The appeal was heard on its

merits and came to be dismissed.

35. The subsequent event of the compromise between

the AMC and the plaintiff firm or concessionaire is a fact not in

dispute. Most of the terms of compromise were executed in

nature. True, some of them were executory. To be specific,

additional FSI was to be granted permitting further

construction. It is also true that, the subject matter of the

present appeal is not the enforcement of the terms of the

compromise.

This Court, relying on decision of the Apex Court

in case of Nidhi (supra), finds that, when the AMC went back

on its promise and it has offered every excuse therefor, this

Court finds that, those facts need not be brought on record by

amending the respective pleadings. This subsequent event is

the admitted fact. The defendant AMC is a local authority. It

has a battery of lawyers on its panel to advice it. True, it has

every authority not to take the compromise terms to logical

conclusion. The Court seized of the present Second Appeal,

however, could not be oblivious to the factum of settlement.

 In the present case, a compromise pursis was

submitted for withdrawal of the appeal. Be that as it may.

This Court is neither endorsing the compromise nor enforcing

the same. The factum of compromise, however, is viewed to

hold the defendant – AMC to have diluted its stand on the

decision of cancelling the lease agreement for illegality

committed by the plaintiff firm and/or its sister concern.

In view of the above, the substantial questions of

law are answered accordingly.

IN THE HIGH COURT OF JUDICATURE OF BOMBAY

BENCH AT AURANGABAD

SECOND APPEAL NO.335 OF 2022 WITH

CIVIL APPLICATION NO.8534 OF 2022

M/s Shalaka Engineers and JV Vs Aurangabad Municipal Corporation,

CORAM : R. G. AVACHAT, J .

Dated : 22nd December, 2022

Print Page

Whether NOC of collector is required for registration of sale deed when the land was given to builder in auction on lease ?

As already discussed hereinabove, we find that in the facts of the present case, since the land was not allotted to a society but to a builder on lease, who has constructed flats for private individuals, who have subsequently formed a Co-operative Society, the 1983 Resolution and 1999 Resolution would not be applicable to the members of such a society.

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5809 OF 2011

THE STATE OF MAHARASHTRA AND OTHERS  Vs MR. ASPI CHINOY AND ANOTHER

Author: B.R. GAVAI, J.

Dated: SEPTEMBER 30, 2022.

Print Page

Whether landlord is deemed to have waived the termination of lease if he accepts rent from tenant after expiry of period of lease?

  In view of the evidence thus obtained and taking

into account the decision in Shanti Prasad Devi’s case

(supra) the High Court held that mere acceptance of the

rent by the landlord after the expiry of the period of

lease would not amount to waiver of the termination of

lease.

12. In view of the above conclusion this Special Leave

Petition must fail as it is devoid of merits.

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

PETITION FOR SPECIAL LEAVE TO APPEAL (C) NO.10700 OF 2022

SRI K.M. MANJUNATH Vs SRI ERAPPA. G DEAD THROUGH LRS. 

Dated: June 24, 2022.

Print Page

Whether the court can grant specific performance of a contract to the plaintiff if the development authority has leased the land to the defendant to construct his house?

 In the facts of this case, the question would, therefore, be, as to whether the enforcement of the agreement to sell dated 17.11.1982, expressly or impliedly, lead to palpably defeat the law in question, which is contained in the Statutory Rules or is prohibited by the same. {Para 73}

74. A contract may expressly or impliedly, be prohibited by provisions of a law. The intentions of the parties do not salvage such a contract. [See AIR 1968 SCC 1328 (supra)]. What is involved in this case, may not be a mere case of a conditional decree for specific performance being granted as was the case in the line of decisions commencing with Motilal (supra) and ending with Ferrodous Estates (supra). The Rules contemplate a definite scheme. Land, which is acquired by the Public Authority, is meant to be utilised for the particular purpose. The object of the law is to invite applications from eligible persons, who are to be selected by a Committee and the sites are allotted to those eligible persons, so that the chosen ones are enabled to put up structures, which are meant to be residential houses. It is implicit in the Rules, and what is more, in the lease-cum-sale agreement, that the allottee, who is treated as a lessee under Rule 7, will remain in possession and, what is more, proceed to fulfil his obligation under the lease-cum-sale agreement and the Rules. The obligations of the allottee/lessee are unambiguous. He has held himself out to be in dire need of a plot of land for the purpose of constructing a residential building. He has to disclose his annual income and any other means indicating his capacity, not only to purchase the site applied for but also to construct the house. He has to respond to the query as to whether any member of the family, of which he is a member, owns or has been allotted a site or a house by the Board or any other Authority, within the area under jurisdiction of the Board. The applicant must, furthermore, disclose whether he already owns a house or house site in the city or outside the city. Whether the applicant’s wife, husband or minor child owns a house or house site, is another matter, he must disclose. Incorrect information in any of these matters, would entitle the Board to resume the site. Rule 11 specifically announces among the principles as relevant for selecting an applicant for allotment, the income of the applicant to build the house on the site for his residence. No doubt, it is not applicable to certain classes, which include the other backward classes. Rule 11(3) declares further that the number of years, the applicant has been waiting for allotment of a site, inter alia, as a relevant principle.

75. It may be true that as contended by Shri R. Basant, learned senior counsel for the respondent that despite the fact no building was put up by the allottee, the BDA has not deemed it fit to cancel the allotment. We gather the impression that the BDA has been lax in the pursuit of the lofty goals of the law. We do not pursue the matter further as BDA is not a party.

76. If the agreement between plaintiff and the first defendant is taken as it is and it is enforced, the following would be the consequences. The allotment to the first defendant was made on 04.04.1979. In fact, the first defendant was obliged, in law, to construct a residential building within two years under Rule 17(6). No doubt, the time could be extended thereunder. But, at the time, the agreement dated 17.11.1982 was entered into, the first defendant was already in breach. The result, however, of the agreement dated 17.11.1982, is as follows:
The first defendant would be liable to convey the right in the site to the plaintiff. The price would be Rs.50,000/- for the site, proceeding on the basis of the concurrent findings by the Court. This is on the supposition that the parties contemplated that the site would be conveyed after the period of ten years from the date of allotment upon the expiry of which alone, the allottee, viz., the first defendant would be entitled to the conveyance under Rule 17(7) of the Rules. It must be noticed that in fact, under the lease-cum-sale agreement and the Rules, what is contemplated is that on events leading up to the stage where the elements of Rule 17(7) are satisfied alone, a right or duty would accrue to the allottee/ lie upon the party. However, what is more important in the context of the facts of this case is the following facet.
Under the agreement, the parties contemplated and have expressly provided that the plaintiff was to be put in possession of the site on the date of the agreement, i.e., on 17.11.1982. Did the parties contemplate the construction of the building residential in nature, for the purpose of which, the site was allotted to the first defendant? Is it not a clear case where enforcing the agreement, as it is, would necessarily result in the first defendant not acting in accordance with lease-cumsale agreement, which, she entered into with the BDA and, what is even more crucially important, against the mandate of the law, as contained in the Rules, which contemplated that the allotment was made for the construction of a residential building by the allottee and the construction was to be completed within the period of two years or an extended period? The agreement between the parties contemplated giving a short shrift to the mandate of the law. This is clear from the fact that under the agreement, the first defendant was obliged to sell the site as it is. Construction of the building became a practical impossibility. The price, which was agreed upon, was qua the site alone. The consideration and the other terms of the agreement, in other words, ruled out the possibility of a residential building being constructed by the first defendant, who as the allottee, was, under the law, obliged to construct the building. Assuming for a moment that the construction was put up, which assumption must be premised on possession not being handed over to the plaintiff and which is contrary, not only to the terms of the agreement, but also pleading of the plaintiff and the consistent stand in the evidence adduced on behalf of the plaintiff and even proceeding, however, on the basis that as found by the Trial Court, that the plaintiff has failed to establish that possession was handed over to him on the date of agreement and that the possession continued with the first defendant, the terms of the agreement, which included, the price being fixed for conveying the right for the site, necessarily, would have the effect of freezing the first respondent in even attempting to put up a construction.

77. We, therefore, reject the contention of the plaintiff that there was nothing, which could have prevented putting up a building. The argument of plaintiff involves rewriting of the contract. This is different from a situation where an allottee, without being trammelled by an agreement, is unable to put up a building even for the whole of ten years and action is not taken under Rule 17(6) and yet conveyance is made in his favour under Rule 17(7). The direct impact of the agreement is that it compelled the party to abstain from performing its obligation in law apart from breaching the agreement with BDA. In other words, taking the agreement as it is, it necessarily would be in the teeth of the obligation in law of the first respondent to put up the construction. The agreement to sell involved clearly terms which are impliedly prohibited by law in that the first defendant was thereunder to deliver title to the site and prevented from acting upon the clear obligation under law. This is a clear case at any rate wherein enforcing the agreement unambiguously results in defeating the dictate of the law. The ‘sublime’ object of the law, the very soul of it stood sacrificed at the altar of the bargain which appears to be a real estate transaction. It would, in other words, in allowing the agreement to fructify, even at the end of ten-year period of non-alienation, be a case of an agreement, which completely defeats the law for the reasons already mentioned.

78. Going by the recital in the agreement entered into between the plaintiff and the first defendant, possession is handed over by the first defendant to the plaintiff. The original Possession Certificate is also said to be handed over to the plaintiff. The agreement, even according to the plaintiff, contemplated that within three months of conveyance of the site in favour of the first defendant, the first defendant was to convey her rights in the site to the plaintiff. It is quite clear that the parties contemplated a state of affairs which is completely inconsistent with and in clear collision with the mandate of the law. On its term, it stands out as an affront to the mandate of the law.

79. The illegality goes to the root of the matter. It is quite clear that the plaintiff must rely upon the illegal transaction and indeed relied upon the same in filing the suit for specific performance. The illegality is not trivial or venial. The illegality cannot be skirted nor got around. The plaintiff is confronted with it and he must face its consequences. The matter is clear. We do not require to rely upon any parliamentary debate or search for the purpose beyond the plain meaning of the law. The object of the law is set out in unambiguous term. If every allottee chosen after a process of selection under the rules with reference to certain objective criteria were to enter into bargains of this nature, it will undoubtedly make the law a hanging stock.

Supreme Court

JUSTICE K. M. JOSEPH JUSTICE PAMIDIGHANTAM SRI NARASIMHA

G. T. GIRISH Vs. Y. SUBBA RAJU (D) BY LRs. & ANR.

Print Page

Good article on Basic principles for valuation of Leasehold Interests

Submitted by:

A. Mohammed Ibrahim. B. Arch, FIE (I), FIV, MIBC, FICA.

Registered Architect, Registered Valuer and Certified ADR Professional.

https://drive.google.com/file/d/191yFv-ZRgxulfR75ZZtZCBTXxFoLgS2v/view?usp=sharing

Print Page

Can a municipal corporation evict its lessee by issuing a notice granting just three days to vacate suit shop?

 It must be noted here that the notice threatened forcible eviction of respondent by granting him just 3 days time to vacate the suit shop, and, therefore, the notice was in clear violation of Section 106 of the Transfer of Property Act, with the agreement between the appellant and the respondent being one of lease and not the licence. The said Act does not confer any special power on the Corporation to forcibly evict the tenants or lessees facing a situation as in the present case, bypassing the provisions of the Transfer of Property Act and powers of Civil Court. Therefore, the rejection of its objection by both the Courts below is legal and proper and cannot be interfered with.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY (NAGPUR BENCH)

S.B. SHUKRE, J.

Nagpur Municipal Corporation Vs. Bhaurao s/o. Marotrao Mohod (D) thr. Legal Heirs

Second Appeal No.205 of 1993

22nd April, 2014

Citation: 2014(6) ALL MR 537

Print Page

Whether Municipal Council can lease out its immovable property for more than three years?

  The respondent no.1 being Municipal Council, is an artificial person and its rights to enter into such transactions are, therefore, as stipulated in Section 92 of 1965 Act. The Municipal Council cannot be claimed to have done something in violation of Section 92, nor petitioners before this Court urge that the respondent no.1/Municipal Council has entered into any agreement with them which violates that provision. The situation was required to be considered by me in the judgment reported in the case of Municipal Council, Pusad, through its Chief Officer Vs. Kundanlal Mohanlal Jaiswal & others (supra) and that judgment clearly covers this controversy. {Para 7}

8. Section 92 of 1965 Act deals with transfer of municipal property. Its Sub-Section 1 restrains Municipal Council from transferring any of its immovable property without sanction of the State Government. The Municipal Council has to forward a proposal for such transfer accompanied by resolution of Municipal Council and that resolution has to be passed by not less than two-thirds of total number of Councilors and it cannot be inconsistent with Rules made in this behalf by the State Government. Sub-Section 3 permits Municipal Council to lease its immovable property for a period not exceeding three years. But then such lessee is not permitted to make any permanent constructions on such immovable property. Such lease can be further renewed by the Municipal Council beyond the period of three years. But then, total period of any lease cannot exceed nine years. The lease cannot be granted or renewed unless supported by resolution passed at a meeting of the Municipal Council.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY(AURANGABAD BENCH)

B.P. DHARMADHIKARI, J.

Dashrath  Ambadas Pujari Vs. The Municipal Council, Tal.-Tuljapur, Dist.-Osmanabad & Anr.

Writ Petition No.1018 of 2011,

25th February, 2011

Citation: 2011(3) ALL MR 78, 2011(3) MHLJ 846,

Print Page

Whether Municipal Corporation can lease out open space vested in it in layout to third party?

 Considering the provisions applicable to the present matter, keeping in view observations of the Hon'ble Supreme Court, we find that the Corporation does not have unfettered rights relating to open space. The Corporation has to use it for the purpose for which the space is left open. {Para 12}

13. In this regard, the petitioners have rightly pointed out the Circular issued by the Government of Maharashtra having Writ Petition No.4208/1998 No.TPB4396/114/C.No.89/96/NV.11, dated 10th June 1996. The Circular refers to misuse being done of such 10% open spaces handed over to public institutions. The Circular records that, to such open spaces, the first right is of the plot holders of the layout, because the plot holders have indirectly to the extent of their plots paid price to the owner of the plot even for the open space which was required to be left by the owner. It is stated that, even if from the open space 10% would be constructed for "Balak Mandir, Club Hall" etc., still such use should be made by the Corporation or jointly by the plot holders of the layout. The Circular requires forming of Co-operative Society/ Federation of plot holders of the lay-out. The proposal should be received from the Co-operative Society/ Federation of the plot holders and should be for common use. If Society/ Federation has not been formed, Registered Undertaking can be taken from plot holders to use the open space for the purposes specified. Such structure can be only for purposes of recreation. As per the directions issued by the State Government, the remaining space has to be left open permanently for the common use of the plot holders as a playground or garden or space for recreation. The Circular contains directions that it would be permissible for the Corporation to give such 10% open space to the Co-operative Society/ Federation of the plot holders on rent on such terms and Writ Petition No.4208/1998 conditions as mentioned in the Circular.

14. The above circular was issued on 10.6.1996, which was before the respondent Corporation passed resolution dated 30.3.1998 to give away the land to the respondent Club. There is no material to show that the Corporation made any efforts as were directed under the above Circular dated 10.6.1996.

15. This Court has, in the matter of "R.S. Pool Table & others Vs. The Aurangabad Municipal Corporation & ors."

(Writ Petition No.4335 of 2012), decided on 8th July 2014, held that, even where Corporation has to lease its land, it would be necessary to follow transparent procedure inviting tenders by issuing advertisement. In this matter, the Corporation cannot justify its action of simply receiving an application from a Club hardly two years old, managed by one of its Corporator and leasing out property, in violation of the Circular dated 10.6.1996, which had been recently issued at that time. In fact the Circular issued by State was specifically to curb leasing outs to such public institutions. Neither the Circular was resorted to nor any transparent procedure was followed for leasing out the land. In fact, as per direction Clause 'B' of the Circular, the only course open for the Corporation was to either lease out the open space to the Society/ Federation or develop the same itself.

Writ Petition No.4208/1998

16. For such reasons, the allocation of the open space made by the Corporation in favour of respondent No.3 and the impugned agreement dated 7.9.1998 is quashed and set aside.

Looking to the averments of the respondent No.3 that the petitioner No.1 was misusing the open space to park his vehicles etc., we record that it would be responsibility of the Municipal Corporation to ensure that the open space is kept open and for common use of the plot holders of the lay-out. The Corporation would be at liberty to take necessary steps as per the Circular referred and to ensure that open space is used strictly for the purpose for which it is left open under the bye-laws and shall take action against violation, if any.

Bombay High Court

Punjabrao Srihari Wadje And Anr vs Municipal Corpn. Aurangabad Thr. ... on 29 February, 2016

Print Page

Whether Municipal corporation can lease out out open space in layout without inviting tenders by issuing advertisement?

 This Court has, in the matter of "R.S. Pool Table & others Vs. The Aurangabad Municipal Corporation & ors."

(Writ Petition No.4335 of 2012), decided on 8th July 2014, held that, even where Corporation has to lease its land, it would be necessary to follow transparent procedure inviting tenders by issuing advertisement. In this matter, the Corporation cannot justify its action of simply receiving an application from a Club hardly two years old, managed by one of its Corporator and leasing out property, in violation of the Circular dated 10.6.1996, which had been recently issued at that time. In fact the Circular issued by State was specifically to curb leasing outs to such public institutions. Neither the Circular was resorted to nor any transparent procedure was followed for leasing out the land. In fact, as per direction Clause 'B' of the Circular, the only course open for the Corporation was to either lease out the open space to the Society/ Federation or develop the same itself.

Bombay High Court

Punjabrao Srihari Wadje And Anr vs Municipal Corpn. Aurangabad Thr. ... on 29 February, 2016

Print Page

What is the distinction between agreement to lease and agreement for lease?

 For the reasons above recorded, we concur with the view taken by the learned Single Judge that the Indentures are a license and is not a lease. They envisage lease deeds to be executed upon the respondent No.1 complying with the obligations under the Indentures and reaching the stage where the right to have the lease executed is triggered. In conformity with its caption: `Agreement to Lease', the Indenture is a license with features of Agreement to Lease. It is not an Agreement for Lease. The distinctions between the two is that in an Agreement for Lease the transaction is completed and possessory interest is transferred in favour of the lessee to the exclusion of the lessor and an Agreement to Lease requires an Agreement for Lease to be executed. No right, title or interest passes under an Agreement to Lease.

 Bombay High Court

The State Of Maharashtra And Ors vs M/S.Jasubhai Business Services ... on 14 November, 2019

CORAM: PRADEEP NANDRAJOG, CJ. &SMT. BHARATI DANGRE, J.

 [ Per Pradeep Nandrajog, CJ.] 

Print Page

Supreme Court: Determination of lease U/S 111(d) of transfer of property Act-Doctrine of merger

 Learned Counsel for the writ Petitioner relying on provisions of Section 111 of the Transfer of Property Act, 1882 contends that leasehold rights have been merged in the lessor since when lessor's interest coalesces with lessee's interest, the principle of merger comes into play. He has placed reliance on judgment of this Court in T. Lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors. MANU/SC/0263/2003 : (2003) 5 SCC 150 and Pramod Kumar Jaiswal and Ors. v. Bibi Husn Bano and Ors. MANU/SC/0346/2005 : (2005) 5 SCC 492. This Court in T. Lakshmipathi (supra) had examined the doctrine of merger as contained in Section 111(d). In Paragraph Nos. 14 to 17, following was laid down:

14. The common-law doctrine of merger is statutorily embodied in the Transfer of Property Act, 1882. Section 111(d) provides:

111. Determination of lease.--A lease of immovable property, determines--

* **

(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right;

* * *"

A bare reading of the doctrine of merger, as statutorily recognized in India, contemplates (i) coalescence of the interest of the lessee and the interest of the lessor, (ii) in the whole of the property, (iii) at the same time, (iv) in one person, and (v) in the same right. There must be a complete union of the whole interests of the lessor and the lessee so as to enable the lesser interest of the lessee sinking into the larger interest of the lessor in the reversion.

15. In Badri Narain Jha v. Rameshwar Dayal Singh MANU/SC/0054/1951 : AIR 1951 SC 186, it was held by this Court that if the lessor purchases the lessee's interest, the lease no doubt is extinguished as the same man cannot at the same time be both a landlord and a tenant, but there is no extinction of the lease if one of the several lessees purchased only a part of the lessor's interest. In such a case the leasehold and the reversion cannot be said to coincide.

16. In Sk. Faqir Bakhsh v. Murli Dhar MANU/PR/0179/1931 : AIR 1931 PC 63, the Plaintiff was holding on lease a portion of the entire property. Subsequently, the Plaintiff and the Defendant became pro indiviso joint proprietors of the property by purchasing shares from the earlier owners. The lease was subsisting when the shares were bought by the parties. In a suit for accounts filed by the Plaintiff it was held that the Plaintiff's rights under lease of a part do not merge in his rights as joint proprietor of the whole of the property as between the parties the Plaintiff held a valid and subsisting lease.

17. A Division Bench of the Patna High Court in Parmeshwar Singh v. Sureba Kuer MANU/BH/0096/1925 : AIR 1925 Pat 530, held that Section 111(d) applies only to a case where the interests of the lessee and of the lessor in the whole of the property become vested at the same time in one person in the same right. Merger is largely a question of intention, dependent on circumstances, and the courts will presume against it when it operates to the disadvantage of a party, as was held by this Court in Nalakath Sainuddin v. Koorikadan Sulaiman, MANU/SC/0564/2002 : (2002) 6 SCC 1 (SCC para 20)."

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1533 and 1534 of 2019

Decided On: 12.02.2019

Delhi Development Authority  Vs.  Karamdeep Finance & Investment (I) Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:

Ashok Bhushan and K.M. Joseph, JJ.

Citation: MANU/SC/0183/2019,(2020) 4 SCC 136

Author: Ashok Bhushan, J.

Print Page

Supreme Court: Purported lessee can not claim any right based on unregistered lease deed

We are of the considered opinion, that no reliance can be placed upon the lease deeds allegedly executed between the defaulting rice miller(s) and the Respondent(s), as they do not satisfy the statutory requirements of Section 17(1)(d) of the Registration Act, 1908. These Lease-deeds thus cannot be accepted as evidence of valid transfer of possessory rights. The plea taken by the Appellant-FCI, that such documentation was made only to escape the liability fastened on the defaulting rice millers, carries some weight, though it is a pure question of fact. The High Court nevertheless ought to have refrained from opining on the sufficiency of such lease deeds for recognition of a new legal entity, and consequential non-transfer of liability to the lessees.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2070 of 2020 

Decided On: 06.03.2020

 Food Corporation of India  Vs.  V.K. Traders and Ors.

Hon'ble Judges/Coram:

S.A. Bobde, C.J.I., B.R. Gavai and Surya Kant, JJ.

Citation:(2020) 4 SCC 60,MANU/SC/0298/2020

Print Page

Supreme Court: Person in possession of the immovable property under an agreement of lease is entitled to get the benefit of the doctrine of part performance

On the other hand in the case of Maneklal

Mansukhbhai10 relied on by learned senior counsel for the respondents it

is clearly held by this Court that defence under Section 53A of the

Transfer of Property Act, 1882 is available to a person who has

agreement of lease in his favour though no lease has been executed

and registered. Similar proposition is also approved in the judgment of

this Court in the case of Hamzabi11 wherein this Court has held that

Section 53A of the Transfer of Property Act, 1882 protects the

possession of persons who have acted on a contract of sale but in

whose favour no valid sale deed is executed or registered. As it is clear

that respondents were put in possession and the Panchayat has acted

upon their proposal for grant of lease said case law supports the case of

the respondents.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9049-9053 OF 2011

Union of India Vs  M/s. K.C. Sharma & Co. 

R. Subhash Reddy, J.

Dated:August 14, 2020.

Print Page

How to ascertain that rented premises was taken on behalf of joint hindu family?

 It is the stand of the plaintiff-landlord that the tenant never paid any rent for the suit premises. It is further clear from the pleadings of the parties that the plaintiff never recognized defendants 2 and 3 as tenants. In order to make out a case of tenancy defendant No. 2 (who alone filed a written statement) tried to plead firstly, that defendant No. 1 had taken the premises on behalf of joint Hindu family and therefore, defendants 2 and 3 were entitled to enjoy the tenancy rights in the absence of defendant No. 1; secondly, a plea was sought to be taken that defendant No. 1 had relinquished the tenancy rights in favour of the defendants 2 and 3 and after relinquishment defendants 2 and 3 started paying rent to the landlord. It is however, admitted that there are no rent receipts regarding payment of rent nor there is any proof of payment of rent coming forth on the record. Both the pleas which have been raised in order to establish tenancy in favour of defendants 2 and 3 are inconsistent and mutually destructive. We find no substance in either of the pleas. It has been meekly suggested in the written statement that the premises was taken on rent by the first defendant who is the joint family manager. This statement alone does not make out a plea that the tenancy was on behalf of the joint family. Secondly, this plea cannot stand scrutiny in view of the admitted fact that the father of the defendants was alive at the time of tenancy and if at all the tenancy was to be in favour of the joint Hindu family, it was the father of the defendants who could have taken the premises on rent as manager/karta of the Joint Hindu Family. Thirdly, a reference to the lease deed shows that the name of the tenant is mentioned in his individual capacity and not as a member/karta of Joint Hindu family. To test the veracity of such a plea it is also worth mentioning that in his reply to the notice of eviction served on him by the plaintiff, the defendant never made any such suggestion. Therefore, we find no merit in the plea that the tenancy was taken for purpose of joint Hindu family.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1811-13/1997

Decided On: 31.07.2003

 S.R. Radhakrishnan  Vs.  Neelamegam

Hon'ble Judges/Coram:

Brijesh Kumar and Arun Kumar, JJ.

Citation: AIR 2003 SC 4152,MANU/SC/0516/2003

Print Page

Delhi HC: Suit for recovery of immovable property used exclusively in trade or commerce and for other incidental reliefs is maintainable before Commercial courts Act

“Definitions.-(1) In this Act, unless the context otherwise requires-

(c) “commercial dispute” means a dispute arising out of-

(vii) agreements relating to immoveable property used exclusively in trade or commerce;

Explanation.-A commercial dispute shall not cease to be a commercial dispute merely because-

(a) It also involves action for recovery of immoveable property or for realisation of monies out of immoveable property given as security or involves any other relief pertaining to immoveable property;

11. Clause (c) defines the “commercial dispute” in the Act to mean a dispute arising out of different sub-clauses. The expression “arising out of” in the context of clause (vii) refers to an agreement in relation to an immoveable property. The expressions “arising out of” and “in relation to immoveable property”1 have to be given their natural and general contours. These are wide and expansive expressions and are not to be given a narrow and restricted meaning. The expressions would include all matters relating to all agreements in connection with immoveable properties. The immoveable property should form the dominant purpose of the agreement out of which the dispute arises. There is another significant stipulation in clause (vii) relating to immoveable property, i.e., the property should be used exclusively in trade or commerce. The natural and grammatical meaning of clause (vii) is that all disputes arising out of agreements relating to immoveable property when the immoveable property is exclusively used for trade and commerce would qualify as a commercial dispute. The immoveable property must be used exclusively for trade or business and it is not material whether renting of immoveable property was the trade or business activity carried on by the landlord. Use of the property as for trade and business is determinative. Properties which are not exclusively used for trade or commerce would be excluded.

18. Lease of immoveable property is dealt with under the Transfer of Property Act in Chapter V thereof. The said enactment vide section 105 defines what is lease, lessor, lessee and rent and vide section 107 stipulates how leases are made and can be terminated. Leases can be both oral or in writing. Noticeably, sub-clause (vii) to clause (c) in Section 2 of the Act does not qualify the word “agreements” as referring to only written agreements. It would include oral agreements as well. The provisions of the Transfer of Property Act deal with the effect of non-payment of rent, effect of holding over and most importantly the determination of the leases or their termination. It cannot be disputed that action for recovery of immoveable property would be covered under sub-clause (vii) to clause (c) when the immoveable property is exclusively used in trade or commerce. Read in this manner, we do not think that claim for recovery of rent or mesne profit, security deposit etc., relating to immoveable property which was used exclusively in trade or commerce should not be treated as a commercial dispute in view of the language, ambit and scope of sub-clause (vii) to clause (c) to Section 2 of the Act. These would qualify and have to be regarded as commercial disputes. The use of expression“any other relief pertaining to immoveable property” would mean disputes relating to breach of agreement and damages payable on account of breach of agreement would be covered under sub-clause (vii) to clause (c) to Section 2 of the Act when it is arising out of agreement relating to immoveable property exclusively used in trade and commerce.

In the High Court of Delhi at New Delhi

(Before Sanjiv Khanna and A.K. Chawla, JJ.)

Jagmohan Behl  v.  State Bank of Indore 

FAO (OS) No. 166/2016

Decided on September 22, 2017, 

Citation: 2017 SCC OnLine Del 10706

Print Page

Whether doctrine of frustration of contract is applicable to leases of immovable property?

 We are unable to agree with counsel for the appellant in the present case that the relation between the appellant and the respondents rested in a contract. It is true that Court of Wards had accepted the tender of the appellant and had granted him a lease on agreed terms of lands of Dada Siba Estate. But the rights of the parties did not after the lease was granted rest in contract. By S. 4 of the Transfer of Property Act the chapters and sections of the Transfer of Property Act which relate to contracts are to be taken as part of the Indian Contract Act, 1872. That section however does not enact and cannot be read as enacting that the provisions of the Contract Act are to be read into the Transfer of Property Act. There is a clear distinction between a completed conveyance and an executory contract, and events which discharge a contract do not invalidate a concluded transfer.

10. By its express terms s. 56 of the Contract Act does not apply to cases in which there is a completed transfer. The second paragraph of s. 56 which is the only paragraph material to cases of this nature has a limited application to covenants under a lease. A covenant under a lease to do an act which after the contract is made becomes impossible or by reason of some event which the promisor could not prevent unlawful, becomes void when the act becomes impossible or unlawful. But on that account the transfer of property resulting from the lease granted by the lessor to the lessee is not declared void.

11. By the agreement of lease the appellant undertook to pay rent for the year 1947-48 and the Court of Wards agreed to give on lease the land in its management. It is not claimed that the agreement of lease was void or voidable. Nor is it the case of the appellant that the lease was determined in any manner known to law. The appellant obtained possession of the land. He was unable to continue in effective possession on account of circumstances beyond his control. Granting that the parties at the date of the lease did not contemplate that there may be riots in the area rendering it unsafe for the appellant to carry on cultivation, or that the crops grown by him may be looted, there was no covenant in the lease that in the event of the appellant being unable to remain in possession and to cultivate the land and to collect the crops, he will not be liable to pay the rent. Inability of the appellant to cultivate the land or to collect the crops because of widespread riots cannot in the events that transpired clothe him with the right to claim refund of the rent paid.

12. Authorities in the Courts in India have generally taken the view that s. 56 of the Contract Act is not applicable when the rights and obligations of the parties arise under a transfer of property under a lease.

13. In Tarabai Jivanlal Parekh v. Lala Padamchand MANU/MH/0046/1950 : AIR1950Bom89 it was held that monthly tenants of residential premises from whose occupation the premises were requisitioned continued to remain the monthly tenants of the landlord as before and that by reason of the requisition there was no eviction by title paramount or a frustration of adventure. The Court in that case observed that the doctrine of frustration did not apply where there is a lease whether the term is one for a fixed period or one which can be terminated by notice to quit, as the estate vested in the lessee by a lease is not extinguished by the order of requisition which is of a temporary nature.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 407 of 1965

Decided On: 01.03.1968

Dhruv Dev Chand Vs. Harmohinder Singh and Ors.

Hon'ble Judges/Coram:

G.K. Mitter, J.C. Shah and Vaidynathier Ramaswami, JJ.

Citation:  (1968) 3 SCR 339 

J.C. Shah, J.

Print Page

Important Notes on Transfer of property Act

1) NOTES ON LEASES OF IMMOVABLE PROPERTY

https://www.lawweb.in/2018/06/notes-on-leases-of-immovable-property.html

2) NOTES ON PART PERFORMANCE(S 53A OF TRANSFER OF PROPERTY ACT)

https://www.lawweb.in/2018/06/notes-on-part-performances-53a-of.html

3) Good article on subrogation( Transfer of property Act)

https://www.lawweb.in/2018/05/good-article-on-subrogation.html

4) Good legal article on Lis pendens( S 52 of Transfer of Property Act)

https://www.lawweb.in/2018/05/good-legal-article-on-lis-pendens.html

5)NOTES ON GIFT ( S 122-129 of Transfer of property Act)

https://www.lawweb.in/2018/06/notes-on-gift.html

Print Page

Supreme Court: Filing of eviction itself amounts notice to quit to tenant

In Nopany Investments (P) Ltd. v. Santokh Singh (HUF) MANU/SC/8184/2007 : (2008) 2 SCC 728, a two judge Bench of this Court has held:

22. ...In any view of the matter, it is well settled that filing of an eviction suit under the general law itself is a notice to quit on the tenant. Therefore, we have no hesitation to hold that no notice to quit was necessary Under Section 106 of the Transfer of Property Act in order to enable the Respondent to get a decree of eviction against the Appellant.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3873 of 2019 

Decided On: 11.04.2019

Sevoke Properties Ltd. Vs. West Bengal State Electricity Distribution Company Ltd.

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud and Hemant Gupta, JJ.

Citation: 2019(1) RCR(Rent) 586,2019 SCC OnLine SC 592

Print Page