G. Krishna Vs. Smt. K. Amaravathi and Another - Court Judgment

SooperKanoon Citationsooperkanoon.com/950051
CourtAndhra Pradesh High Court
Decided OnApr-02-2012
Case NumberSECOND APPEAL NO. 1373 OF 2011
Judge B.N. RAO NALLA
Reported in2012(5)ALT81; 2012(4)ALD576
AppellantG. Krishna
RespondentSmt. K. Amaravathi and Another
Excerpt:
transfer of property act, 1956, section (1) of section 106 – 1. this second appeal is filed by the appellant assailing the judgment in a.s. no.142 of 2008 dated 12-09-2011 passed by the learned i additional chief judge, city civil court, secunderabad, whereby and whereunder, the first appellate court dismissed the appeal confirming the judgment in o.s. no.252 of 2007 dated 24-07-2008 passed by the learned iii senior civil judge, city civil court, secunderabad. 2. appellant herein is the defendant and respondents nos.1 and 2 herein are the plaintiffs before the trial court. respondent nos.1 and 2, who are landlords, are wife and husband and the appellant is their tenant. 3. for the sake of convenience, the parties are referred to as they arrayed before the trial court. 4. o.s. no.252 of 2010 was filed by the plaintiffs against the defendant for recovery of possession of the suit schedule property, recovery of arrears of rent for 10 months and for future mesne profits at rs.15,000/- per month from september, 2005 onwards till possession is delivered. the trial court was pleased to decree the suit observing that the plaintiffs have terminated the tenancy of the defendant by issuing notice of termination under ex.a-4 dated 28-07-2005 as the defendant has committed default in payment of rents, and, as such, the plaintiffs are entitled to recovery of possession of the suit schedule property from the defendant. 5. assailing the judgment of the trial court, the defendant carried the matter in appeal in a.s. no.142 of 2008 on the file of the i additional chief judge, city civil court, secunderabad. the lower appellate court after hearing both sides and after re-appreciating the entire evidence and other material on record came to the same conclusion as that of trial court and accordingly dismissed the appeal confirming the trial court’s judgment. aggrieved of the same, defendant preferred this appeal. 6. sri o. manohar reddy, learned counsel for the defendant – appellant, submits that it is an admitted fact that the plaintiffs wanted to demolish the suit schedule premises in order to make new construction and requested the defendant to vacate the suit premises. he submits that though a fresh rental agreement was not executed, ex.a.1 – memorandum of understanding (mou) dated 11-08-2004 entered into by the parties, could have been treated as rental agreement in the light of sub section (1) of section 106 of the transfer of property act, 1956. he also submits that the defendant is liable to pay the rent at the rate of rs.2,200/-per month rather than rs.2,500/-per month, as agreed in ex.a-1 - mou, since the area allotted by the plaintiffs after reconstruction of the suit schedule property is less than what they have agreed in ex.a-1 - mou. he further submits that in view of the clause in ex.a.1 - mou that the tenancy was agreed to be for a period of 5 years, the same could not have been terminated, as such, ex.a-4 legal notice, by which, tenancy of the defendant was said to have been terminated by the plaintiffs, is illegal and both the courts below failed to notice the same and erroneously decreed the suit of the plaintiffs observing that the tenancy is from month to month and terminable by either party by issuing fifteen days’ notice. 7. sri p. shiv kumar, learned counsel appearing for the respondents – plaintiffs, supporting the concurrent decision of the courts below submitted that in view of clause - 4 in ex.a-1 mou that a fresh rental agreement has to be executed after handing over the reconstructed portion i.e. suit property and as the same is not entered into by the parties, the tenancy is from month to month as per sub section (1) of section 106 of the transfer of property act, 1956, terminable by issuing fifteen days’ notice by either party and since the defendant has committed wilful default in payment of monthly rents, ex.a-4 legal notice dated 28-07-2005 issued by the plaintiffs terminating the tenancy of the defendant and demanding arrears of rent as well as future mesne profits is maintainable. 8. in reply to the arguments of the learned counsel for the plaintiffs, learned counsel for the defendant submitted that if it was intended to evict the tenant prior to expiry of the period of five years, an appropriate clause would have been provided in ex.a.1 mou, however, it was not so provided in ex.a.1. that, since ex.a.1 mou was in existence and terms thereof were binding on both the parties,ex.a1 mou does not in any way contravene the provisions of section 106 of the tp act, as the provisions thereunder stipulate absence of any contract between the parties and in view of the same, it cannot be said that there was any cause of action for the plaintiffs to file the original suit. it is also submitted that the cause of action, if any, would arise only after the expiry of the period of five years as stipulated in ex.a.1 -mou. 9. the point that arises for consideration is whether the courts below have committed any error or infirmity in decreeing the suit? point: 10. the short questions that fall for determination are whether ex.a-1 mou can be treated as lease deed in the absence of fresh rental agreement as per ex.a-1 mou and whether the defendant has committed any wilful default in payment of rents? 11. clause - 4 of ex.a.1 mou clearly reveals that a fresh rental agreement has to be executed after handing over the reconstructed portion to the defendant and he has to deposit additional deposit of rs.50,000/- and the rent would be rs.2,500/- per month payable on or before 5th of every month and the tenancy would be for a period of five years. however, no rental agreement, as stipulated under the said mou, was entered into by the parties. in the absence of any fresh rental agreement between the parties as stipulated under ex.a-1 mou, by operation of law, it is deemed to be treated that the tenancy is from month to month terminable by issuing fifteen days’ notice by either party as per sub-section (1) of section 106 of transfer of property act. in view of the same, the contention of the learned counsel for the defendant that since no fresh rental agreement was entered into by the parties, ex.a-1 mou could be treated as rental agreement having regard to sub section (1) of section 106 of the tp act, is not tenable in law in view of the provisions of section 107 of the tp act, as per which, such an instrument is required to be registered, whereas ex.a-1 mou is an unregistered document. hence, the contention of the learned counsel for the defendant that in the absence of fresh rental agreement ex.a-1 mou has to be treated as rental agreement between the parties and as per the same, period of lease is five (5) years and before expiry of said five years period, tenancy cannot be terminated, has no merit and the same cannot be accepted. therefore, this court is of the view that in view of clause – 4 in ex.a-1 mou, the same cannot be treated as rental deed. 12. in the circumstances, in view of the fresh rental agreement not being executed, as was agreed under ex.a-1 mou, the tenancy has got to be treated from month to month terminable by either party by issuing fifteen days’ notice as per section 106(1) of tp act, and, as such, the legal notice issued to the defendant under ex.a-4 dated 28-07-2005 terminating the tenancy and to handover vacant possession of the suit schedule property as well as arrears of rent and mesne profits, is to be treated as proper in law. in a decision given by the orissa high court in andhra pradesh handloom weavers cooperative society ltd., hyderabad v. k. venaktesar rao and anotherair 2000 orissa 153 and in a decision of the division bench of delhi high court in m/s. uptron powertronics ltd. v. g.l. rawal air 1999 delhi 377, it was held that though the period of tenancy is agreed for longer period, the tenancy without registered document is invalid and in those circumstances, the tenancy has to be treated as on month to month basis terminable by either party by issuing notice as per sub section (1) of section 106 of tp act. 13. now it has to be seen whether the defendant has committed any wilful default in payment of monthly rent as alleged by the plaintiffs in ex.a-4 legal notice dated 28-07-2005. 14. plaintiffs got issued legal notice under ex.a-4 dated 28-07-2005 to the defendant terminating the tenancy and demanding him to vacate the suit premises stating that he has committed wilful default in paying the monthly rent from november, 2004 to july, 2005 at the rate of rs.2,500/- per month, which comes to rs.20,000/-, and, as such, the tenancy is from month to month. that a reply notice was sent by the defendant under ex.a-5 stating that pending negotiations, no final reply could be issued and depending on the outcome of the negotiations, final reply notice would be issued. however, the record does not reveal that such final reply notice was issued by the defendant. that as there was no final reply notice and as the suit premises was not vacated by the defendant, it appears that the plaintiffs filed o.s. no.252 of 2007 on the file of the iii senior civil judge, city civil court, secunderabad for recovery of possession of the suit schedule property and for recovery of arrears of rent for 10 months and for future mesne profits at rs.15,000/- per month from september, 2005 till possession is delivered. the averments of the written statement are to the effect that after new structure was put up, two mulgies of the agreed extent were not delivered to the defendant and that the mulgies of lesser extent were delivered. therefore, it is contended by the defendant that instead of rs.2,500/- per month, as agreed under ex.a-1 mou, he was liable to pay only rs.2,200/- per month alleging that the plaintiffs have agreed thereto on being convinced as to the area of the mulgies being lesser than what was promised under ex.a-1 mou. however, a perusal of ex.a-1 mou clearly shows that the plaintiffs had agreed to handover two mulgies of 200 square feet area and the rent would be rs.2,500/- per month and the same falsifies the case of the defendant that the plaintiffs agreed to handover two mulgies of 280 square feet area of the reconstructed portion. further, though the defendant contends that he was given two shops of less than 200 square feet area, no material is placed to show the same. 15. further, the case of the defendant is that plaintiff no.2 has purchased articles from the defendant to a tune of rs.7,000/- and did not sign on any credit note and he (plaintiff no.2) also took rs.2,000/- as handloan from him and that he paid rs.13,000/- by way of cheques towards rent, as such, there is no wilful default in payment of rents by him, and therefore, the plaintiffs are not entitled to the relief on this ground of wilful default also and they are not entitled to any amount towards arrears of rent. however, the defendant failed to produce any evidence to show that plaintiff no.2 took handloan of rs.2,000/- from him and that he took articles (paints) on credit basis worth of rs.7,000/- on credit from him. though ex.b-7 shows that a sum of rs.2,000/- was sent by money order, it does not show as to whom the amount was sent and why he sent only rs.2,000/- when his case itself is that agreed rent was rs.2,200/- per month and not rs.2,500/- as agreed under ex.a-1. in the absence of the above, it cannot be said that defendant was paying the rents regularly without fail. thus, it is crystal clear that till ex.a-4 legal notice dated 28-07-2005 was issued by the plaintiffs terminating the tenancy, it can be stated that the defendant has intentionally avoided execution of fresh rental agreement and has not paid rents from november 2004 to july 2005 as contended by the plaintiffs in ex.a-4 legal notice and thus he has committed wilful default in payment of rents. further, when the defendant has issued interim reply notice under ex.a-5 dated 26-08-2005 to the legal notice dated 28-07-2005 of the plaintiffs demanding him to vacate the suit schedule premises and for payment of arrears of rent, he has not questioned the validity of ex.a-4 quit notice, as such, now he has no right to dispute ex.a-4 as invalid. the point is accordingly answered. 16. for the aforesaid reasons, this court is of the considered opinion that both the courts below have not committed any error or infirmity requiring interference of this court. 17. therefore, the second appeal is dismissed confirming the judgment in a.s. no.142 of 2008 dated 12-09-2011 passed by the learned i additional chief judge, city civil court, secunderabad, whereby the judgment in o.s. no.252 of 2007 dated 24-07-2008 passed by the learned iii senior civil judge, city civil court, secunderabad was confirmed. the defendant is directed to vacate the suit schedule premises within three (3) months from today and the learned counsel for the defendant undertakes to file an undertaking to that effect. no order as to costs. the miscellaneous applications, if any, are also dismissed.
Judgment:

1. This Second Appeal is filed by the appellant assailing the judgment in A.S. No.142 of 2008 dated 12-09-2011 passed by the learned I Additional Chief Judge, City Civil Court, Secunderabad, whereby and whereunder, the first appellate Court dismissed the appeal confirming the judgment in O.S. No.252 of 2007 dated 24-07-2008 passed by the learned III Senior Civil Judge, City Civil Court, Secunderabad.

2. Appellant herein is the defendant and respondents Nos.1 and 2 herein are the plaintiffs before the trial Court. Respondent Nos.1 and 2, who are landlords, are wife and husband and the appellant is their tenant.

3. For the sake of convenience, the parties are referred to as they arrayed before the trial Court.

4. O.S. No.252 of 2010 was filed by the plaintiffs against the defendant for recovery of possession of the suit schedule property, recovery of arrears of rent for 10 months and for future mesne profits at Rs.15,000/- per month from September, 2005 onwards till possession is delivered. The trial court was pleased to decree the suit observing that the plaintiffs have terminated the tenancy of the defendant by issuing notice of termination under Ex.A-4 dated 28-07-2005 as the defendant has committed default in payment of rents, and, as such, the plaintiffs are entitled to recovery of possession of the suit schedule property from the defendant.

5. Assailing the judgment of the trial Court, the defendant carried the matter in appeal in A.S. No.142 of 2008 on the file of the I Additional Chief Judge, City Civil Court, Secunderabad. The lower appellate Court after hearing both sides and after re-appreciating the entire evidence and other material on record came to the same conclusion as that of trial Court and accordingly dismissed the appeal confirming the trial Court’s judgment. Aggrieved of the same, defendant preferred this appeal.

6. Sri O. Manohar Reddy, learned counsel for the defendant – appellant, submits that it is an admitted fact that the plaintiffs wanted to demolish the suit schedule premises in order to make new construction and requested the defendant to vacate the suit premises. He submits that though a fresh rental agreement was not executed, Ex.A.1 – Memorandum of Understanding (MOU) dated 11-08-2004 entered into by the parties, could have been treated as rental agreement in the light of sub section (1) of Section 106 of the Transfer of Property Act, 1956. He also submits that the defendant is liable to pay the rent at the rate of Rs.2,200/-per month rather than Rs.2,500/-per month, as agreed in Ex.A-1 - MOU, since the area allotted by the plaintiffs after reconstruction of the suit schedule property is less than what they have agreed in Ex.A-1 - MOU. He further submits that in view of the clause in Ex.A.1 - MOU that the tenancy was agreed to be for a period of 5 years, the same could not have been terminated, as such, Ex.A-4 legal notice, by which, tenancy of the defendant was said to have been terminated by the plaintiffs, is illegal and both the Courts below failed to notice the same and erroneously decreed the suit of the plaintiffs observing that the tenancy is from month to month and terminable by either party by issuing fifteen days’ notice.

7. Sri P. Shiv Kumar, learned counsel appearing for the respondents – plaintiffs, supporting the concurrent decision of the Courts below submitted that in view of clause - 4 in Ex.A-1 MOU that a fresh rental agreement has to be executed after handing over the reconstructed portion i.e. suit property and as the same is not entered into by the parties, the tenancy is from month to month as per sub section (1) of Section 106 of the Transfer of Property Act, 1956, terminable by issuing fifteen days’ notice by either party and since the defendant has committed wilful default in payment of monthly rents, Ex.A-4 legal notice dated 28-07-2005 issued by the plaintiffs terminating the tenancy of the defendant and demanding arrears of rent as well as future mesne profits is maintainable.

8. In reply to the arguments of the learned counsel for the plaintiffs, learned counsel for the defendant submitted that if it was intended to evict the tenant prior to expiry of the period of five years, an appropriate clause would have been provided in Ex.A.1 MOU, however, it was not so provided in Ex.A.1. That, since Ex.A.1 MOU was in existence and terms thereof were binding on both the parties,

Ex.A1 MOU does not in any way contravene the provisions of Section 106 of the TP Act, as the provisions thereunder stipulate absence of any contract between the parties and in view of the same, it cannot be said that there was any cause of action for the plaintiffs to file the original suit. It is also submitted that the cause of action, if any, would arise only after the expiry of the period of five years as stipulated in Ex.A.1 -MOU.

9. The point that arises for consideration is whether the Courts below have committed any error or infirmity in decreeing the suit?

POINT:

10. The short questions that fall for determination are whether Ex.A-1 MOU can be treated as lease deed in the absence of fresh rental agreement as per Ex.A-1 MOU and whether the defendant has committed any wilful default in payment of rents?

11. Clause - 4 of Ex.A.1 MOU clearly reveals that a fresh rental agreement has to be executed after handing over the reconstructed portion to the defendant and he has to deposit additional deposit of Rs.50,000/- and the rent would be Rs.2,500/- per month payable on or before 5th of every month and the tenancy would be for a period of five years. However, no rental agreement, as stipulated under the said MOU, was entered into by the parties. In the absence of any fresh rental agreement between the parties as stipulated under Ex.A-1 MOU, by operation of law, it is deemed to be treated that the tenancy is from month to month terminable by issuing fifteen days’ notice by either party as per sub-section (1) of Section 106 of Transfer of Property Act. In view of the same, the contention of the learned counsel for the defendant that since no fresh rental agreement was entered into by the parties, Ex.A-1 MOU could be treated as rental agreement having regard to sub section (1) of Section 106 of the TP Act, is not tenable in law in view of the provisions of Section 107 of the TP Act, as per which, such an instrument is required to be registered, whereas Ex.A-1 MOU is an unregistered document. Hence, the contention of the learned counsel for the defendant that in the absence of fresh rental agreement Ex.A-1 MOU has to be treated as rental agreement between the parties and as per the same, period of lease is five (5) years and before expiry of said five years period, tenancy cannot be terminated, has no merit and the same cannot be accepted. Therefore, this Court is of the view that in view of Clause – 4 in Ex.A-1 MOU, the same cannot be treated as rental deed.

12. In the circumstances, in view of the fresh rental agreement not being executed, as was agreed under Ex.A-1 MOU, the tenancy has got to be treated from month to month terminable by either party by issuing fifteen days’ notice as per Section 106(1) of TP Act, and, as such, the legal notice issued to the defendant under Ex.A-4 dated 28-07-2005 terminating the tenancy and to handover vacant possession of the suit schedule property as well as arrears of rent and mesne profits, is to be treated as proper in law. In a decision given by the Orissa High Court in Andhra Pradesh Handloom Weavers Cooperative Society Ltd., Hyderabad v. K. Venaktesar Rao and anotherAIR 2000 ORISSA 153 and in a decision of the Division Bench of Delhi High Court in M/s. Uptron Powertronics Ltd. v. G.L. Rawal AIR 1999 DELHI 377, it was held that though the period of tenancy is agreed for longer period, the tenancy without registered document is invalid and in those circumstances, the tenancy has to be treated as on month to month basis terminable by either party by issuing notice as per sub section (1) of Section 106 of TP Act.

13. Now it has to be seen whether the defendant has committed any wilful default in payment of monthly rent as alleged by the plaintiffs in Ex.A-4 legal notice dated 28-07-2005.

14. Plaintiffs got issued legal notice under Ex.A-4 dated 28-07-2005 to the defendant terminating the tenancy and demanding him to vacate the suit premises stating that he has committed wilful default in paying the monthly rent from November, 2004 to July, 2005 at the rate of Rs.2,500/- per month, which comes to Rs.20,000/-, and, as such, the tenancy is from month to month. That a reply notice was sent by the defendant under Ex.A-5 stating that pending negotiations, no final reply could be issued and depending on the outcome of the negotiations, final reply notice would be issued. However, the record does not reveal that such final reply notice was issued by the defendant. That as there was no final reply notice and as the suit premises was not vacated by the defendant, it appears that the plaintiffs filed O.S. No.252 of 2007 on the file of the III Senior Civil Judge, City Civil Court, Secunderabad for recovery of possession of the suit schedule property and for recovery of arrears of rent for 10 months and for future mesne profits at Rs.15,000/- per month from September, 2005 till possession is delivered. The averments of the written statement are to the effect that after new structure was put up, two mulgies of the agreed extent were not delivered to the defendant and that the mulgies of lesser extent were delivered. Therefore, it is contended by the defendant that instead of Rs.2,500/- per month, as agreed under Ex.A-1 MOU, he was liable to pay only Rs.2,200/- per month alleging that the plaintiffs have agreed thereto on being convinced as to the area of the mulgies being lesser than what was promised under Ex.A-1 MOU. However, a perusal of Ex.A-1 MOU clearly shows that the plaintiffs had agreed to handover two mulgies of 200 square feet area and the rent would be Rs.2,500/- per month and the same falsifies the case of the defendant that the plaintiffs agreed to handover two mulgies of 280 square feet area of the reconstructed portion. Further, though the defendant contends that he was given two shops of less than 200 square feet area, no material is placed to show the same.

15. Further, the case of the defendant is that plaintiff No.2 has purchased articles from the defendant to a tune of Rs.7,000/- and did not sign on any credit note and he (plaintiff No.2) also took Rs.2,000/- as handloan from him and that he paid Rs.13,000/- by way of cheques towards rent, as such, there is no wilful default in payment of rents by him, and therefore, the plaintiffs are not entitled to the relief on this ground of wilful default also and they are not entitled to any amount towards arrears of rent. However, the defendant failed to produce any evidence to show that plaintiff No.2 took handloan of Rs.2,000/- from him and that he took articles (paints) on credit basis worth of Rs.7,000/- on credit from him. Though Ex.B-7 shows that a sum of Rs.2,000/- was sent by money order, it does not show as to whom the amount was sent and why he sent only Rs.2,000/- when his case itself is that agreed rent was Rs.2,200/- per month and not Rs.2,500/- as agreed under Ex.A-1. In the absence of the above, it cannot be said that defendant was paying the rents regularly without fail. Thus, it is crystal clear that till Ex.A-4 legal notice dated 28-07-2005 was issued by the plaintiffs terminating the tenancy, it can be stated that the defendant has intentionally avoided execution of fresh rental agreement and has not paid rents from November 2004 to July 2005 as contended by the plaintiffs in Ex.A-4 legal notice and thus he has committed wilful default in payment of rents. Further, when the defendant has issued interim reply notice under Ex.A-5 dated 26-08-2005 to the legal notice dated 28-07-2005 of the plaintiffs demanding him to vacate the suit schedule premises and for payment of arrears of rent, he has not questioned the validity of Ex.A-4 quit notice, as such, now he has no right to dispute Ex.A-4 as invalid. The point is accordingly answered.

16. For the aforesaid reasons, this Court is of the considered opinion that both the Courts below have not committed any error or infirmity requiring interference of this Court.

17. Therefore, the Second Appeal is dismissed confirming the judgment in A.S. No.142 of 2008 dated 12-09-2011 passed by the learned I Additional Chief Judge, City Civil Court, Secunderabad, whereby the judgment in O.S. No.252 of 2007 dated 24-07-2008 passed by the learned III Senior Civil Judge, City Civil Court, Secunderabad was confirmed. The defendant is directed to vacate the suit schedule premises within three (3) months from today and the learned counsel for the defendant undertakes to file an undertaking to that effect. No order as to costs. The miscellaneous applications, if any, are also dismissed.