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Baldeodas Mahavirprasad Vs. G.P. Sonavalla - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 84 of 1947 : Suit No. 322 of 1947
Judge
Reported in(1948)50BOMLR233
AppellantBaldeodas Mahavirprasad
RespondentG.P. Sonavalla
DispositionAppeal dismissed
Excerpt:
.....section 116-lessee of property remaining in possession after termination of tenancy-acceptance of rent by landlord-nature of new tenancy-difference between ordinary tenancy and statutory tenancy.;before the rent restriction act came into force acceptance of rent by a landlord was an unequivocal act which led to the conclusion that he had assented to the tenant remaining in possession. but the position in law has altered since the rent restriction act has come into force. as soon as the notice to quit given to a tenant by a landlord expires and the tenant continues in possession, he becomes a statutory tenant whom the landlord cannot eject so long as the tenant carries out the conditions laid down in section 9 of act vii of 1944. the provisions of section 166 of the transfer of property..........the landlord that changes the character of his possession. as soon as the landlord assents to the tenant's possession, the tenant ceases to be a trespasser and becomes a tenant holding over with the consequences laid down in section 116 of the transfer of property act. act vii of 1944 does not define 'rent' but defines 'standard rent,' and 'standard rent' in relation to any premises is defined and explained by section 4(4) of the act, and section 5 of the act makes any rent in excess of the standard rent irrecoverable by the landlord. section 9 precludes the landlord from recovering possession of his premises so long as the tenant, pays or is ready and willing to pay rent to the full extent allowable by the act and performs the other conditions of the tenancy. therefore, as soon as the.....
Judgment:

M.C. Chagla, C.J.

1. This is an appeal from a judgment of Mr. Justice Tendolkar. It seems that before November 1943 one Mrs. Mooseick was a monthly tenant of the defendant and she was carrying on the business of a boarding house in the premises. On November 30,1943, the defendant's attorneys Messrs. Ghulamali Noorani & Co. gave a notice to Mrs. Mooseick terminating her tenancy on December 31, 1943. After terminating the tenancy Messrs. Ghulamali Noorani & Co. went on to add in their letter that she had not been paying her rent regularly and punctually and she had not performed various other conditions of the tenancy. They also alleged that she had caused nuisance and annoyance in various ways to the adjoining or neighbouring occupiers and they also contended that she had sublet portions of the premises without the landlord's permission. On December 1, Mrs. Mooseick replied to this letter through her attorneys. She refuted the various allegations made in the letter of November 30, 1943, refused to vacate the premises and added that the reason why the landlord wanted to get rid of her was because he wanted to get a premium for reletting and also charge rent higher than the standard rent. On December 23, 1943, Messrs. Ghulamali Noorani & Co. wrote another letter reiterating the allegations they had made in their original letter of November 30, 1943. Thereafter Mrs. Mooseick continued to remain in possession of the premises in suit and the landlord went on accepting the rent. On November 6, 1945, Mrs. Mooseick assigned her business and the premises to the plaintiffs. The landlord continued to receive rent up to April 1946. But it is not disputed by the plaintiffs that they were never recognized as tenants by the defendant, nor did they ever attorn as tenants to the defendant. In November 1946 the defendant took proceedings in the Small Causes Courtfor the ejectment of their tenant, and on November 11, 1946, an order was made by that Court for ejectment against the defendant's tenant. The plaintiffs then filed the present suit for a declaration that they were the monthly tenants of the defendant and not liable to be ejected by the defendant. The whole basis of their claim in the suit is that they became the tenants of the defendant by virtue of the assignment of November 6, 1945. The learned Judge who tried the case raised various issues, but tried two issues as preliminary issues, and those issues were:

(1) Whether Mrs. Mooseick was in possession of the suit premises after January 1, 1944, as a statutory tenant? and

(2) If so, whether she had any right title or interest in the suit premises which she could assign to the plaintiffs?

2. Now, it cannot be disputed that if Mrs. Mooseick became a statutory tenant after January 1, 1944, then she could not assign the tenancy which is in the nature of a personal right to the plaintiffs and the plaintiffs must fail in the suit. If, on the other hand, Mrs. Mooseick held over after January 1, 1944, and a new tenancy was created under Section 116 of the Transfer of Property Act, it is equally undisputable that the plaintiffs would become the tenants of the defendant and they would be entitled to the declaration they have asked for in this suit assuming they proved the assignment in their favour. Mr. Seervai's a contention is that as soon as the defendant accepted rent from Mrs. Mooseick after the tenancy terminated on the expiry of the notice to quit on December 31, Mrs. Mooseick held over and a new tenancy was created. Before a new tenancy can be created under Section 116 two conditions have to be satisfied : (1) the tenant must continue in possession after the termination of the tenancy ; and (2) the landlord must assent to his continuing in possession. This assent can be given either by accepting rent or otherwise. Before the Rent Restriction Act came into force acceptance of rent by the landlord was an unequivocal act which could lead only to one conclusion, namely that he had assented to the tenant remaining in possession. But the position in law has altered since the Rent Restriction Act has come into force. I may point out that under Section 116 you want a bilateral act, not merely a unilateral act either on the part of the landlord or of the tenant. The act on the part of the tenant is his continuing in possession; the act on the part of the landlord is his assenting to the tenant's continuing in possession. If the tenant continues in possession after the determination of the lease, he is a trespasser. It is only the assent of the landlord that changes the character of his possession. As soon as the landlord assents to the tenant's possession, the tenant ceases to be a trespasser and becomes a tenant holding over with the consequences laid down in Section 116 of the Transfer of Property Act. Act VII of 1944 does not define 'rent' but defines 'standard rent,' and 'standard rent' in relation to any premises is defined and explained by Section 4(4) of the Act, and Section 5 of the Act makes any rent in excess of the standard rent irrecoverable by the landlord. Section 9 precludes the landlord from recovering possession of his premises so long as the tenant, pays or is ready and willing to pay rent to the full extent allowable by the Act and performs the other conditions of the tenancy. Therefore, as soon as the notice to quit expires and the tenant continues in possession, the position is not what it used to be under Section 116 of the Transfer of Property Act, namely that he becomes a trespasser, but he becomes a statutory tenant whom the landlord cannot eject so long as the tenant carries out the conditions laid down in Section 9 of Act VII of 1944. We cannot accept Mr. Seervai's contention that even under the present law the mere acceptance of rent by itself is sufficient to bring into existence a new tenancy as contemplated by Section 116. If the landlord accepts rent-as he did in this case-he does it with the knowledge that although he has given a notice to quit, in law he cannot get possession from the tenant, and it is difficult to see how one can possibly speak of the landlord assenting to the tenant's possession when that possession is forced upon him by the law of the land. We agree with the learned Judge below that the assent contemplated by this section is a free assent. It must be an act of volition on the part of the landlord. Before the Rent Restriction Act that act of volition was indicated by his accepting the rent. Now his accepting the rent is attributable either to the fact that in law the tenant has become a statutory tenant and he cannot get possession and he must accept rent from the statutory tenant, or to his agreeing to a new tenancy coming into existence and the tenant becoming his tenant under the new tenancy. Therefore, in our opinion, in every case what has to be determined is whether the acceptance of rent is attributable to the statutory tenancy which came into existence on the notice to quit having expired, or to the landlord assenting to a new tenancy coming into existence. The acceptance of rent by itself is no longer as unequivocal an act as it used to be before Act VII of 1944 came into force. Now, in this case and on the facts of this case there can be no doubt, on a careful perusal of the correspondence to which I have referred, that both the landlord and the tenant knew of their respective rights and obligations under Act VII of 1944. In the notice to quit the landlord does not merely put an end to the monthly tenancy, but goes further and makes an averment which would be necessary if he were to succeed in ejecting his tenant. He says the tenant has not paid rent, he says the tenant has not carried out her part of the tenancy agreement, and in short he is preparing for a case which he would have to establish if he were to succeed in a Court of law in ejecting his tenant. On the other hand, the tenant is conscious of the fact that her liability is merely to pay standard rent, and she accuses the landlord with wanting to get rent higher than the standard rent, and there is nothing before us to show that the rent that the landlord was accepting from the tenant was anything more than the standard rent. After all the burden of establishing that there was a new tenancy under Section 116, that Mrs. Mooseick held over from January 1, 1944, and then assigned the premises to the plaintiffs, lies upon the plaintiffs, and the only way they have sought to discharge their burden is by proving that the landlord accepted rent from Mrs. Mooseick. In our opinion that evidence under the present state of the law is not sufficient to enable us to hold that the burden has been discharged. As we have already stated, if the acceptance of rent is no longer an unequivocal act, it was incumbent upon the plaintiffs to prove more than mere acceptance of rent in order to ask the Court to hold that there was a holding over by Mrs. Mooseick from January 1, 1.944.

3. Mr. Seervai has strongly relied on a decision of Mr. Justice Fawcett which he delivered on the Original Side in Meghji Vallabhdas v. Dayalji & Co. I.L.R. (1924) 48 Bom. 341 In that case a tenancy expired on October 20, 1923, and the defendants, who were the tenants, wrote to their landlord, the plaintiff, saying that they would vacate not on October 20, but on October SO. The plaintiff objected to this and said that if they continued they would have to give a proper notice to quit. The defendants as a matter of fact quitted on October 26 and then the plaintiffs filed the suit ' claiming rent for the whole month and also additional rent for a further month in lieu of notice, and Mr. Justice Fawcett held that the plaintiff was entitled to succeed as a new tenancy had come into existence, and the defendants by continuing in possession held over, and the reason which led Mr. Justice Fawcett to this conclusion was that once the tenant continued in possession after the determination of the lease, it was left to the landlord to exercise his option either to assent to that possession or not to assent to it. The option was no longer with the tenant. It was for the landlord to determine the character of the tenant's possession either by assenting to it or refusing to assent to it, and the learned Judge held that in this particular case the landlord had assented to the tenant's possession and, therefore, a new tenancy had come into existence and the defendants were liable to give a proper notice to quit before they gave up possession. We fail to see with respect to Mr. Seervai how this decision helps him ; because the whole question resolves itself to this : Has the landlord assented to the tenant's possession or not? He is perfectly right in urging that that particular right to determine the character of the possession has been given by the law to the landlord, but he must express his intention, he must exercise his option, he must determine the character, and the question in each case is whether the landlord has done so or not.

4. Two English oases may be considered which have taken the same view of the law as we are suggesting is the correct law on the subject. The first in Davies v. Bristow. Penrhos College v. Butler [1923] 3 K.B. 428. In that case the English Court of Appeal held that where a tenant held over after the expiry of a notice to quit and paid rent to the landlord, that was not to be taken as acceptance on the part of the landlord to a renewal of the tenancy on the old terms, because, as they point out, he had no choice but to accept the rent, the tenant having become a statutory tenant on the expiry of the notice to quit. And the Court of Appeal went even further in the ease of Shuter v. Hersh [1922] 1 K.B. 438. By then the English Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, had been amended and a new clause had been incorporated, Section 16(3) which provided:

Where the landlord of any dwelling-house to which this Act applies has served a notice to quit on a tenant, the acceptance of rent by the landlord for ft period not exceeding three months from the expiration of the notice to quit shall not be deemed to prejudice any right to possession of such premises, and, if any order for possession is made, any payment of rent so accepted shall be treated as mesne profits.

5. It was sought to be argued before the Court of Appeal on the strength of this amendment that if the landlord accepted rent beyond a period of three months then a contractual tenancy would come into existence. That argument was rejected by the Court consisting of Lord Justice Bankes and Lord Justice Scrutton.

6. Under the circumstances we are of the opinion that the learned Judge below was right in the conclusion he came to. The appeal, therefore, fails and is dismissed with costs.


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