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Navnitlal Chunilal Vs. Baburao (No. 1) - Court Judgment

LegalCrystal Citation
SubjectTenancy;Property
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 6 of 1944 and Summary Suit No. 701 of 1943
Judge
Reported inAIR1945Bom132; (1944)46BOMLR776
AppellantNavnitlal Chunilal
RespondentBaburao (No. 1)
DispositionAppeal dismissed
Excerpt:
transfer of property act (iv of 1882), sections 113, 112-landlord and tenant--notice to quit -ejectment suit-receipt of rent as compensation for use and occupation-whether such receipt amounts to waiver of notice-bombay rent restriction order, 1942-certificate of controller.; the plaintiffs', landlords, obtained a certificate prescribed by the bombay rent restriction order, 1942, gave a notice to quit to their tenant, defendant, and filed a suit in ejectment. during the pendency of the suit the defendant paid rent for the demised premises month after month, which the plaintiffs accepted as 'compensation for use and occupation' of the premises. a question arose whether by such acceptance the plaintiffs had waived the notice to quit:-; that, in the circumstances of the case, there was no..........the amount could alter the situation. the opinion was expressly based on the view that except as rent the landlord had no right to receive that amount at 911. the house of lords has not affirmed that view. having regard to the fundamental difference between waiver of the forfeiture of a lease and waiver of a notice to quit i do not think that case has any application here.27. in the present case, as i have pointed out, although the period of notice to quit had come to an end, the landlord had the right under the rent restriction order to receive from the tenant the same amount which was sent by the tenant. after receiving the amount he stated, in terms, that he was not receiving the same as rent but as compensation for use and occupation. on being informed of this the tenant did not.....
Judgment:

Leonard Stone, Kt., C.J.

1. This is an appeal from the decision of Mr. Justice Blagden dated December 17, 1943. The point raised is a short one, and is whether the acceptance of a payment after notice to quit waived the notice, as it is sometimes described, and in effect created a new tenancy.

2. Now, it is necessary to say something with regard to relevant dates. It appears that in February of 1943 the landlords, who are the respondents to this appeal, were minded to get possession of these premises if they could, and under the supposition that the whole of the Bombay Rent Restriction Order, 1942, was valid and effectual, they applied to the Controller, and ultimately, after having gone to the Collector, they got a certificate saying that the premises were needed for their own occupation. That certificate is dated April 19, 1943. Accordingly, on the following day, April 20, they served a notice to quit on their tenant, the appellant to this appeal. No point turns on the validity of that notice. The notice expired on June 2, and on June 7, this suit was filed, and be it noted in passing that in the prayer to the plaint the respondents ask (a) for an order for delivering up of vacant possession, and (b) that the defendant might be ordered to pay compensation for use and occupation of the premises from June 3, 1943, till vacant possession given, at Rs. 181 per month.

3. What subsequently happened was as follows : On July 10, 1943, a cheque was sent with a covering letter by the appellant to the respondents, and the covering letter says this :

Please find herewith my cheque for Rs, 181 being the rent for the month of Jeth.

4. On July 22 the respondents cashed that cheque, and on August 13 of the same year they sent a receipt. In fact there are two receipts, because the rent was split up between the flat and the garage. The receipt for the rent of the flat is in the following terms : .

For rent including municipal taxes for Block No. 6 on the 2nd floor of INDIRA situated on plot No. 15A of the West Chaupaty Estate, Babulnath Road, Bombay, for the month of Jeshtha 1919

and then the amount is stated, and that is signed by the agent, but one of the landlords respondent No. 1, endorsed on the bottom : 'Received as compensation for use and occupation,' and signed his own name. Three days previous to the receipt of that receipt the appellant had sent the rent for the next month, namely, on August 10, and it does not appear that any receipt was ever sent in respect of that payment. But for the following month payment was made on September 9, and there is some degree of particularity this time in giving the receipt : since the word ' Rent' is struck out and ' Compensation for use and occupation ' is written in instead. I think it is to be noticed that the appellant sent this third payment after he had received the receipt for the first payment. Two further payments were made in October and November, and receipts were ultimately given in a like form for ' compensation for use and occupation ', and not for rent.

5. The written statement of the appellant was not in fact put in until December 1, 1943, but the delay was due to the fact that on July 12, 1943, Mr. Justice Coyajee made an order against the appellant for possession which was appealed against, and which appeal was allowed on November 12, 1943.

6. What is said by Sir Jamshedji Kanga on behalf of the appellant is this : That the acceptance of rent is a waiver of the notice to quit, even though the landlord may have received the payment as compensation for use and occupation, because the sums of money were in each case tendered as rent, and, therefore, they could not be accepted on any other basis. Certain well-known English cases were relied upon ; but before I turn to them, it is necessary to look at the relevant sections of the Transfer of Property Act, which govern this matter. They are s.111, Clauses (g) and (h), Section 112, Section 113 and Section 116.

7. Section 111, Clauses (g) and (A), of the Transfer of Property Act, 1882, is as follows :

A lease of immoveable property determines-.(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter ; or (2) in case where the lessee renounces his character as such.....(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other.

8. Section 112 deals with the case of forfeiture, and it provides that a forfeiture is waived by acceptance of rent; and to this section there is this proviso :

Provided also that, where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver.

9. Then comes Section 113, which is the one with which we are immediately concerned, and it is as follows :

A notice given under Section 111, Clause (h), is waived, with the express or implied consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting.

And Sir Jamshedji Kanga has pointed out in his argument that it is significant that Section 113 has no proviso to it as in the case of Section 112.

10. Section 116 is also relied upon, and it is in the following terms :

If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106.

Before parting with that section it is necessary to note the words ' the lease is renewed.

11. The question we have to determine is : whether on the facts that I have stated there was an intention by the landlord to treat the tease as continuing or to treat a new-lease as having been created. In my judgment, there can be no question of the lease continuing. The lease and the tenancy came to an end on June 2, 1943, and the premises then became subject, as they previously were, to the Bombay Rent Restriction Order, 1942. No payment was tendered by the tenant until July 10; so that in any event there was an interval after June 2, when the notice to quit became effective, and the tender of the first payment, during which the lease and the tenancy had come to an end The real question, in my opinion, is : whether a new tenancy was by the conduct of the landlord created, apart from any statutory right of the tenant to remain in occupation of the premises.

12. Sir Jamshedji Kanga has referred us to two English cases in the House of Lords, namely, Croft v.Lumley and Davenport v. The Queen (1877) 3 A.C.115. But 'both those cases were cases of the waiver of a forfeiture; and, in my judgment, there is a fundamental difference between a waiver of a forfeiture, which is a matter which can be done at the election of the landlord alone, and what is inaccurately referred to as the waiver of a notice to quit, which can only proceed on the basis that the landlord and tenant are ad idem in making a new agreement. The difference is well stated in the following passage in Woodfall's ' Law of Landlord and Tenant', 24th edn., at p. 980 :

A notice to quit can be waived, and a new or continual tenancy created, only by the express or implied consent of both parties'. There is this difference between a determination of a tenancy by a notice to quit and a forfeiture ; in the former case the tenancy is put an end to by the agreement of the parties, which determination of the tenancy cannot be waived without the assent of both ; but in the case of a forfeiture the lease is voidable only at the election of the lessor : in the one case the estate continues though voidable, in the other the tenancy is at an end.

In my opinion, the English cases on waiver of forfeiture are not of any assistance in the determination of the question before us.

13. Three other English cases have been relied upon ; and they are all cases in which the alleged waiver is of a notice to quit. The first one is : Hartell v.Blackler [1920] 2 K. B. 161. The second is : Davies v. Bristow : Penrhos College v. Butler [1920] 3 K. B. 428 and the third is : Shuter v. Hersh [1922] 1 K.B. 438. The two latter cases show that the first one Hartell v. Blackler (supra) is no longer to be considered good law, and cannot be relied upon as an authority. Davis v. Bristow : Penrhos College v. Butler (supra) and Shuter v. Hersh (supra) were both cases in which the premises were controlled under the English Rent Restrictions Act, and it was held that the acceptance of rent was not a waiver. There is no English case in which a waiver of a notice to quit has been claimed by the acceptance of a payment made after action for ejectment brought. These two cases are useful in that they show that it is not in every case that the payment and acceptance of rent of necessity waives the notice.

14. In my judgment, what we have to do is to apply Section 113 to the facts of this case. The determination of that question is really a question of fact for a jury : was the act of the landlord one from which one can impute the intention of creating a renewal of the tenancy In my opinion, it was not. At the time these payments wereaccepted, and I am prepared to take the date of acceptance as that laid down by the learned Judge in the Court below, namely, the date when the cheques were cashed,-the premises were subject to the standard rent contained in Clause 3(4) of the Bombay Rent Restriction Order, 1942.

15. But, apart from this aspect of the matter, the payments were expressly accepted as compensation for use and occupation, and although the payments may have been tendered as rent, they were not received as such, and further there was not only a suit in ejectment pending but also a claim in that suit for compensation for use and occupation.

16. We have been referred to a decision of Mr. Justice Buckland in Manicklal v.Kadambini A.I.R. [1926] Cal. 763 where that learned Judge in effect decided this point under Section 113, and he said this (p. 763, col. 2) :-

Had rent been withdrawn from the Rent Controller prior to the filing of the suit there could be no question that this section would operate and that there would be a waiver of the notice to quit. It is however argued that inasmuch as the money was withdrawn from the Rent Controller after the suit had been filed there was no waiver.

And the learned Judge decided that there was in effect a waiver. Now, it is to be observed that apparently neither in the arguments of counsel nor in the judgment of the learned Judge was any reported case at all referred to, and in my opinion,Manicklal v. Kadambini (supra) is in conflict with what was laid down by Lord Mansfield in Doe v.Batten (1775) 1 Cowp. 243. What Lord Mansfield said at p. 245 is as follows :

The single question is : Whether the landlord has, by any subsequent act or agreement, waived such his right, and consented that the tenant should continue the possession? If he has, no doubt but he will be bound by such agreement. As to that, the fact in this case is that the landlord has received rent eo-nomine for a quarter of a year which became due after the time of the demise in the declaration laid. This circumstance, it is insisted, is in fact a declaration on his part, that he departs from the notice he had given : and is an acknowledgment that he still considers the defendant as his tenant. But let us suppose the landlord had accepted this rent under terms, or made an express declaration that he did not mean to waive the notice, and that, notwithstanding his acceptance or receipt of the rent, he should still insist upon the possession. Or suppose any fraud or contrivance on the part of the tenant in paying it. Clearly under such circumstances the plaintiff ought not to be barred of his right to recover : but all these are facts which ought to be left to the consideration of the jury.

17. Now, Doe v. Batten (supra), though of some antiquity, has stood the test of time, and is cited with approval in Smith's ' Leading Cases ', 13th edn., Vol. I, p. 43, under the notes to Dumpors case; in Woodfall's 'Law of Landlord and Tenant', 24th edn., at p. 981 ; and in Halsbury's ' Laws of England ', Hailsham Edition, Vol. XX, at p. 143, in the articles on ' Landlord and Tenant' which stand in the name of Lord Justice Du Parcq ; and lastly it has been referred with approval in Abram Steamship Co. v. Westville Shipping Co. [1923] A.C. 773. the passage being in the judgment of Lord Atkinson at p. 788, which judgment was assented by the other noble Lords, including the Lord Chancellor, Lord Birkenhead. '

18. In my judgment, when all the facts of this case are taken into consideration, it is clear that there was no intention on the part of the landlord within the meaning of Section 113 of the Transfer of Property Act to renew the lease or to treat the lease as still subsisting.

19. Accordingly, in my judgment, this appeal must be dismissed with costs.

20. The appellant must vacate the premises on or before May 22, 1944.

Kania, J.

21. I agree. The relevant correspondence and facts have been summarized in the judgment of the learned Chief Justice. In that judgment the cases cited at the bar have also been referred to. I generally agree with the reasoning of the learned Chief Justice, but would add a few words to deal with some aspects of the case which were argued at the bar.

22. It was contended that Section 113 of the Transfer of Property Act made the Indian law different from the English law. In my opinion, there is no substance in that contention. Section 112 deals with the case of forfeiture. In terms it provides that forfeiture could be waived by acceptance of rent. The section specifies certain other ways also in which a forfeiture could be waived. Because it was stated in the body of the section that forfeiture could be waived by acceptance of rent, it was essential to insert a proviso that if rent was accepted after the institution of a suit to eject the lessee, such acceptance was not a waiver. From this structure of Section 112, in my opinion, it is erroneous to argue that, because there is no such proviso in Section 113, if rent is accepted after a suit is filed, the Legislature intended that the same should operate as a waiver of a notice to quit. It should again be noted that forfeiture is recognised as a unilateral act following on certain acts or defaults of the tenant. When covenants entitling the landlord to determine the lease have been broken, the landlord exercises his right to forfeit. In law, he has, therefore, made his election; and if such an election is once made, he cannot go back on the same. The election is his, and his act has produced the result of forfeiture. The structure of Section 113 is entirely different. It is expressly provided that there must be the consent of the person to whom property was given on lease to bring about a waiver of the notice to quit. On the side of the landlord it is provided that he must do an act showing an intention to treat the lease as subsisting. It is, therefore, clear that under Section 113 there has to be an agreement between the two parties, and the waiver of a notice to quit cannot be brought about by an action either of the tenant alone or of the landlord alone.

23. Some reliance was placed on the words 'showing an intention to treat the lease as subsisting', as they were found both in Sections 112 and 113. In my opinion, this is a very unsound way of attempting to construe two different sections, when the material structure thereof is quite different In the case of a forfeiture, if there is a waiver, it must be of the alleged breach of covenant, with the result that the old lease has to continue. The result of a waiver of forfeiture is as if the forfeiture had never occurred and the lease was subsisting. In the case of a waiver of a notice to quit, on the expiry of the period mentioned in the notice the term of the lease comes to an end, and that lease cannot be brought into existence again. It is only on the agreement of the two persons that a new lease comes into existence. To that extent the phraseology of Section 113 is not strictly accurate. This point is made clear both in the passage cited in the judgment of the learned Chief Justice from Woodfall's 'Law of Landlord and Tenant' and as noticed in Halsbury's ' Laws of England,' Hailsham Edition, Volume XX, at p. 143.

24. It was contended that Section 116 made a difference in the Indian law. That argument, in my opinion, is unsound. Moreover, Section 116 has to be read along with Section 111, Clause (a), which deals with the termination of a tenancy by efflux of time. I do not think that section affects the rights of landlord and tenant as contained in Sections 112 and 113 in the present case, again, the whole argument is based on the contention that from the day the respondent obtained the certificate from the Rent Controller the appellant became a trespasser. In my opinion, that argument is unsound. Under the Rent Restriction Order the position is that a landlord is entitled to enforce his rights under the Transfer of Property Act, save to the extent they are curtailed by that Order. Before the judgment given by the full bench of this Court a few days ago, the relations of landlord and tenant were understood as governed by the Rent Restriction Order. It had also been held by a bench of this Court that when a landlord filed a suit for ejectment, the tenant could put forth Clause (8) of the Rent Restriction Order as a defence. In order to avail himself of that defence, he had to establish first that he was a tenant who was ready and willing to pay the rent due by him and had fulfilled the other conditions of the tenancy. On his establishing that position, the landlord would normally fail, unless he produced a certificate in terms of the proviso. In spite of the judgment of the full bench this aspect of the case is material to be considered, because the question is : What was the intention of the respondent-landlord when he received and cashed the cheques sent by the appellant At that time the landlord had claimed that the tenancy had come to an end by the notice to quit. He had further filed a suit claiming possession of the property. By paragraphs 2 and 3 of the plaint read with prayer (b) he had claimed Rs. 181 as compensation for use and occupation after the period of notice to quit came to an end. As ordinarily understood, the question is : whether he had waived that claim of his in any manner By his actions, as pointed out in the record of this case, I do not think he had done so.

25. The argument of the appellant is that because the landlord accepted the amount sent as rent, although while accepting the same he stated that he was receiving it on account of compensation for use and occupation, he must in law be deemed to have accepted it as rent, and, therefore, there was a waiver of the notice to quit. In my opinion, this line of argument is faulty, because it attempts to split the provision of Section 113 in two parts. It is an attempt to read in Section 113 the words ' by acceptance of rent' as an act resulting absolutely in the waiver of the notice to quit, irrespective of the question whether there was an intention to treat the lease as subsisting or not. It is true that under ill., (a) if an amount is sent as rent and is 'received as rent', there will be a waiver of a notice to quit. But the section does not provide that if an amount is sent as rent, but is received by the landlord and accepted by him not as rent but as compensation for use and! occupation, that is receipt of rent. In each case, according to the wording of Section 113, it is for the Court to determine whether the act in question, (whether it is a receipt of the amount sent as rent, or is the receipt of the amount sent without any statement at all), discloses an intention to treat the lease as subsisting. If the answer to the question is in the affirmative, then only if there is consent, express or implied, of the tenant, there is a waiver of a notice to quit.

26. The whole basis of the appellant's argument on this point is Croft v.Lumley (1858) 6 H.L.C. 672. It was a case of forfeiture of a lease. The tenant was contending that he had not committed a breach of covenant entitling the landlord to forfeit and, therefore, he was a tenant. He therefore tendered the amount as rent. When the landlord stated that he would accept it without prejudice to his contention that covenants were broken, the tenant reiterated that he was not paying it on any such condition ; he was paying it as rent; and the landlord can take it as such or refuse it. Under those conditions the landlord received the amount, although he continued to state that he received it as compensation. The learned Judges, who were summoned to express their opinion, in a large majority stated that on the facts the act of the landlord in retaining the amount amounted to acceptance of rent, and as it was a case of forfeiture, no statements of his when accepting the amount could alter the situation. The opinion was expressly based on the view that except as rent the landlord had no right to receive that amount at 911. The House of Lords has not affirmed that view. Having regard to the fundamental difference between waiver of the forfeiture of a lease and waiver of a notice to quit I do not think that case has any application here.

27. In the present case, as I have pointed out, although the period of notice to quit had come to an end, the landlord had the right under the Rent Restriction Order to receive from the tenant the same amount which was sent by the tenant. After receiving the amount he stated, in terms, that he was not receiving the same as rent but as compensation for use and occupation. On being informed of this the tenant did not protest. I am unable to split this action of the landlord in two parts as suggested on behalf of the appellant, namely, that the receipt of the amount should be held as conclusive evidence showing the intention to treat the lease as subsisting, when the landlord, in terms, stated that he was not receiving it as rent but as compensation for use and occupation. In my opinion the question is one of fact. In this case it is not shown that the landlord in receiving the amount sent by the tenant had done an act showing an intention to treat the lease as subsisting. On that ground, the appeal fails.

28. The learned counsel for the appellant has confined his argument to the question of waiver of the notice to quit, and has not addressed us at length on the first contention urged by him before the trial Court, namely, that the certificate granted by the Controller was invalid. Having regard to the judgment of the full bench delivered last week, the question has become immaterial; but the learned counsel has made it quite clear that he does not abandon the point. That position is well appreciated, because even if he argued at length, in view of the full bench case, which is binding, upon us on this point, the result is a foregone conclusion.


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