BADRI LAL v. MUNICIPAL CORPORATION OF INDORE

The suit out of which this appeal arises was filed on 16th Sep- tember, 1957. The appellant filed his written statement on 20th January, 1958 and the issues were framed on 24th March, 1958. At this stage the defendant wrote Ex. D.4 on 17-3-1959 in the fol luwing terms : "I lx'g to say that it has been approved by you to give me the plot of land at H.N. 85 Parsimohalla on permanent lease of 99 years after having received upset price from ine. I agree to pay whatever lease rent found due against nie upto 31-3-1951 besides reason able costs of the suit and I have depOSited tJday vide fo the cheque number E/2/104221 dated 17-3-59 Indore Bank, Sanyogitaganj and I undertake to pay in cash any amount found due against me at the time of execution of the lease deed." The Commissioner wrote Ex. D.5 to the defendant on 23·4-1959 asking him to deposit the upset price of Rs. 16,212, rent accord ing to the new rates after deducting a sum of Rs. 824-6-0 already paid by the appellant up to 31-3-54, as also the court expenses. 3-L631Sup.C. I. 173 18 SUPREME COURT REPORTS [1973] 3 S.C.R. Along with his letter dated 17-3-1959 the appellant had apparently sent a cheque for Rs. 16,601.93. The balance not having been paid, as demanded in the letter Ex. D.5, the Commissioner wrote again on 28-5-1959 and sent a further reminder on 19-8-1959 giving the appellant four days" time for paying the balance which was actually paid only on 22-9-1959. The Municipal Council passed a resolution on 31-5-1960 refusing to grant the lease to the appellant and directing the Municipal Commissioner to take back possession of the land. Curiously the appellant somehow pleaded that he was a perma nent lessee of the land but ·that claim o!Wiously could npt be and was not seriously pressed before this Court by Mr. Gupte, learned counsel appearing for him. The Trial Court surprisingly held that he became a permanent tenant, the Trial Court as well as the Ist Appellate Court held that the appellant was a tenant holding over. Both of them decided in favour of the appellant. The High Court observes at one place that the appellant's position after 30-9-1949 was that of a lessee holding over and not that of a trespasser, but there is no discussion as to whv it considers that the appellant was a lessee holding over. We shall later point out that the appellant cannot be deemed to be a lessee holding over. The High Couri also held that there was no compromise of the suit by any person authorised to do so on behalf of the Corporation. It also held that there was no acceptance of rent with the san~tion of the Council. As a consequence it allowed the appeal and decreed the plaintiff's suit. Before this Court Shri Gupte appearing for the appellant did not contend that there was a compromise of the suit. His contention on the other hand was that a concluded contract emerged when the appellant paid a sum of Rs. 5697.93 on 22-9-59 pursuant to the letter of the Commissioner and therefore the suit could not conti nue. He also argued that the appellant would be entitled to benefit of the provisions of Section 53A of the Transfer of Property Act, and that i'n any case he was a tenant holding over and would be entitled to the benefit of provisions of Section l 06 and 116 of the Transfer of the Property Act. We may straight away say that we find ourselves unable agree with the contention that there was a concluded contract bet ween the Municipal Council and the appellant on· 22-9-1959. There is no dispute that in this case the Commissioner cannot enter into a contract by himself and can do so only if it is sanctioned by the Municipal Corporation under section 80 of the Madhya Pradesh Municipal Corporation Act. The resolution of the Corpo ration dated 9-12-1949 was specific that the land would be given to the appellant if he deposited the upset price and rent fa accor• the Municipal dance with the letter dated 26-10-1949 sent by A B c D E F G H BADRI LAL v. MUNICIPAL CORP. (Alagiriswami, J.) 19 Commissioner to the appellant and otherwise the land should be taken back into possession. That letter is not on record. Appa rently, it was on the same terms as Ex.P. 20 dated 31-12-1949. It could no~ be otherwise. The appellant did not comply with the terms of that letter. He went on to make a counter offer by Ex. P.19 dated 9-1-1950. He appealed to the Minister and having fail ed there, he waited nearly 7 years after the Corporation's resolu ~ion to pay a part of the amount and pay the balance in instalments. This was accepted by the Municipal Commissiqner on 20-6-1956. But we must make it clear that the Municipal Commissioner had no power in view of the resolution of tne Corporation to accept the appellant's offer. He was given a specific mandate and was not authorised to enter into negotiations with the appellant regarding the lease. The amount was not paid in spite of two further letters and the suit was filed on 16-9-1957. Tlie Municipal Commissioner had· no power to go on accepting the offers from the appellant more than 15 days after his letter to him on 31-12-1949; nor could he accept any terms other than those mentioned in the Corporation's resolution either within those 15 days or later. Even the offer made by the Corporation's resolution came to an end with the filing of the suit, which was a clear and unequivocal revoca tion of the resolution. Thereafter the Corporation cannot be deemed to keep open its offer of the year 1949. Nor was ii open to the Commissioner either to make any offer to the appellant or to accept any offer from the appellant in respect of the I.and except with the sanction of the Municipal Council. The appellanl's offer made on 17-3-59, a year and a half after the suit was filed, was a new offer. and it was rejected by the only authority competent to accept it i.e. the Corporation on 31-5-1960. The correspondence carried on by the Commissioner with the appellant was wholly beyond his powers. The offer made by the appellant in 1959 cannot have anything to do with the resolution passed by the Municipal Council in 1949. The offer was of a different set of terms and included an offer pay the costs of the suit and that also had in fact been deposited by the appellant at the instance of the CommiSBioner. That indi cates the new situation that had come into exisrence and estab lishes beyond doubt that this was a fresh offer. We therefore hold that no contract came into existenc~ between the parties on 22-9-1959. It was then urged bv Mr. Gupte that the appellant having deposited the rent up to 31-'.l-1954 and the Municipal Commis to be sioner having accepted a tenant holding over. Leavine aside contention put forward on behalf of the Corporation that this pay ment was made behind its back, it has to be noted that the payment was at the rate prevailing before 30-9-1949 and on that date the it he should be deemed the moment B c D E F G H 20 SUPREME COURT REPORTS [1973] 3 S.C.R. Corporation having passed a resolution specifying a new rate df rent of Rs. 9 per Chasma the payment at the old rate by the appel- lant and its acceptance by the Municipal Commissioner was not an acceptance of rent as such and in clear recognition of the tenancy right of the appellant. It cannot amount to the Corporation consenting to the appellant continuing as a tenant by paying the old rates of rent. There is thus no question of the appellant being a tenant holding over. But a person who was lawfully in occupa- tion does not become a trespasser, even if he does not become a tenant holding over but is a tenant by snfferance. The position at law was explained in Kai. Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden & Anr.( 1 ) ·as follows: "On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised pre mises to the lessor. If the lessee or a sub-lessee under him continues in possession even after the determina- tion of ·the lease, the landlord undoubtedly has right to e.iect him forthwith; but if he does not, and there is neither assent nor dissent on his part to the continu- ance of occupation of such person, the latter becomes in the language of English law a tenant on sufferance who has no lawful title to the land but holds ii merely through the !aches of the landlord. If now the landlord accepts rent .from such person or otherwise expresses assent to the continuance of his possession, a new tenancy comes into existence as is contempla~ by s. 116, Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be re- garded as one from year to year or from month to month in accordance with the provisions of s. 116 of the Act." At page 272 it was pointed out : A B c D E f "It can scarcely be disputed that the assent of the landlord which is founded on, acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays·it." The same position was explained in a recent decision of this Court to which one of us was a party in Bhawanji Lakhamshi v. Himat- G la/ Jamnadas Dani('). At page 391 it was observed: "The act of holding over after the expiration of the term does not create a tenancy of any kind. If a tenant remains in possession after the determination of tenant on lease, the common law rule is that he is a sufferance. A distinction should be drawn between a tenant continuing in possession after the determination (1)[1949-50] F.C.R. 262 at 270. (2) [1972) I S.C.C. 388. H A B c D E

1.1 BADRI LAL v. MUNICIPAL CORP. (A/agiriswami, J.) 21 landlord and a of the term with the consent of tenant doing so Without his consent. The former is a tenant at sufferance in English Law and the latter a tenant holding over or a tenant at will. In view of the concluding words of Section 1 J 6 of the Transfer of Property Act, a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy. What the section contemplates is that on one side there should be an offer of taking a new lease evidenced by the lessee or sub-lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or other wise. In Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden and Another, the Federal Court had occasion to consider the question of the nature of the tenancy created under section 116 of- the Transfer of Property Act and Mukherjea, J., speaking tW: majority said that the tenancy which is created by the "holding over" of a lessee or under-lessee is a new ten ancy in law even though many of the terms of the old lease might be continued in it, by implication; and that to bring a new tenancy into existence, there must be a bilateral act. It was further held that the assent of the landlord which is founded on acceptance of rent must be acceptance of rent as such. and in clear recognition of the tenancy right asserted by the person who pays it." The appellant being merely a· tenilllt by sufl!erance there is no need for any notice before he could be evicted. Thus the .iudgment of the High Court is correct, in so far as it held the appellant was liable to be ·evicted. The appeal is dismissed with costs. The petition for reception of additional evidence is also dismissed. V.P.S. A. p peal dismissed.