1. The principal question for determination in this appeal is whether the lease in favour of the defendant (appellant) had validly terminated by efflux of time or whether there was holding over by the lessee of the leasehold property as contemplated under Section 116 of the Transfer of Property Act,
2. The circumstances under which this question and several subsidiary questions, to which reference will be made later, have arisen, may be briefly stated as follows:--
The plaintiff is the Corporation of the City of Bangalore represented by its Commissioner (hereinafter referred to as the Corporation) who has brought the suit against the defendant. The suit property belongs to the Corporation and is situate at Kalasipalya Bus Stand. The Corporation is a body corporate established under the City of Bangalore Municipal Corporation Act of 1949 (hereinafter referred to as the Act). The property which is a building was leased to the defendant on 1-7-61 for a period of 3 years on a monthly rent of Rs. 525/-. The defendant executed the lease deed (Exhibit. P-1). dated 1-7-1961 for a period of 3 years. According to the terms of the lease, the period of lease came to an end by efflux of tune on the 30th of June 1964. In the meantime, the Corporation invited tenders to lease the right of running a hotel in the suit premises on 21-3-1964. In pursuance of the notification calling for tenders, a number of persons offered tenders. In spite of the fact that one Janardhan offered the highest tender of Rs. 1901/- per month which was accepted by the Corporation by its resolution dated 19-6-1964 marked Exhibit P-6 the defendant did not vacate the suit premises but continued to stay in the suit premises.
3. The case of the Corporation is that the tenancy terminated by efflux of time on the expiry of 30th of June. 1964 and the defendant continued unauthorisedly thereafter and therefore he was liable for damages for use and occupation of the suit premises at the rate of Rs. 1901/- per month. The Corporation also claimed possession of the suit premises from the defendant. Before the filing of the suit the Corporation issued a notice Exhibit D-7 dated 6-3-1965 by which it asked the defendant to vacate and hand over possession of the suit premises to the Corporation. As a matter of abundant caution, the Corporation has mentioned in that notice that even though the Corporation did not recognise that the defendant was a tenant he should vacate the suit premises on the expiry of 30th April, 1965 which happened to be the last day of the month of the tenancy, taking for granted that it was a monthly tenancy. In spite of this, the defendant did not vacate and deliver possession of the suit premises to the Corporation. Therefore, the Corporation filed the present suit seeking for the reliefs against the defendant, out of which this appeal arises for possession and damages for use and occupation at the rate of Rs. 1901/- per month from 1-7-1964 till the date of suit.
4. The defendant in his written statement contended that he was a tenant from the year 1948, the lease of the suit premises having been renewed in his favour by the Corporation from time to time. According to him, the lease was renewed on 1-7-61 on a monthly rent of Rs. 525/-. He does not dispute that the period of lease came to an end on the expiry of 30th June, 1964. He admits having executed the lease deed referred to above in favour of the Corporation; but he pleads that he is not bound to vacate the suit premises as he has paid rents subsequent to 30-6-1964 at the rate he was paying previously to the Corporation. Therefore, according to him, the relationship of landlord and tenant subsists even after 1-7-1964 and he becomes a monthly tenant holding over under the Corporation. He has denied the liability to pay Rs, 1901/- per month as damages, as according to him he was bound to pay only rent at the rate of Rs. 525/- per month only.
5. On these contentions, the trial court raised as many as six issues.
6. The facts are not in dispute. The lease in favour of the defendant came to an end on the expiry of 30th June. 1964. Therefore, the only question for determination as has been stated earlier, is whether by reason of the payment of Rs. 517-50 after adjusting Rupees 7-50 towards light charges as it used to be done before 30-6-1964 to the Assistant Revenue Officer of the Corporation as per Exhibits D-1, and D-7 to D-15 the defendant became a tenant holding over as provided under Section 116 of the Transfer of Property Act. It may be mentioned here that the defendant went on making petitions to various officers of the Corporation from 7-2-64 as is evidenced by Exhibits D-6, D-16, D-17 and D-18 requesting to extend the period of lease. It is clear from Exhibit D-19, dated 9th April, 1964, that in pursuance of a notification issued by the Corporation calling for tenders to lease out the suit premises from 1-11-64, he was also one of the tenderers and he had offered Rupees 625/- per month. In that letter he also made a request to the Corporation to extend the period of lease at the rate of Rupees 625/- per month. The Corporation after receipt of all tenders including the tender of the defendant, prepared a list of names of all the tenderers as per Exhibit P-4 In which one Janardhan is shown as the highest tenderer offering Rupees 1901/- and the defendant is shown as having offered Rupees 625/- being the lowest offer. His name appears at serial number 17 in Exhibit P-4. It is relevant to mention here that the Corporation did not reply to any one of the letters mentioned above agreeing to continue the lease in favour of the defendant by extending the time. But, on the other hand, the Corporation took action to call for the tenders to lease out the suit premises from 1-7-64 pursuant to which the defendant also offered his tender. It is not disputed by the Corporation that Assistant Revenue Officer received amounts from time to time from 1-7-64 from the defendant as per Exhibits D-1 and D-7 to D-15.
7. It is contended by Sri Jagadeesha Sastry, the learned counsel for the defendant, that the defendant tendered rent and the same was accepted by the Assistant Revenue Officer of the Corporation as rent and that therefore, according to him, it should be held that his case came squarely within the provisions of Section 116 of the Transfer of Property Act. Section 116 of the Transfer of Property Act reads as follows:--
'If a lessee or tinder-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'.
A reading of this Section will show that for the application of this section, two things are necessary:
1. The lessee should be in possession after the termination of the lease and
2. The lessor or his representative should accept rent or otherwise assent to his continuing in possession. The use of the word 'otherwise' in Section 116 shows that acceptance of the rent by the landlord has been treated as a form of giving assent to the tenant continuing in possession. The expressions 'lease' and lessor' have been denned in Section 105 of the Transfer of Property Act as follows:
'A lease of immovable property is a transfer of a right to enjoy such property made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.'
'The transferor is called the lessor the transferee is called the lessee the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.'
8. The question is whether in this case, the lessor has accepted the rent thereby agreeing to continuance of the lease of the defendant in the premises. The Corporation is a statutory body governed by the Act. Section 73 deals with disposal of property and interest thereunder. Sub-section (1) of Section 73 deals with the power of the Commissioner to grant a lease. Sub-section (2) of Section 73 requires the Commissioner to take sanction of the Standing Committee to grant a lease of any Corporation immoveable property for a period not exceeding 3 years. Therefore, the resulting position is that it is only upon obtaining the sanction of the standing committee constituted under the statute, the Commissioner is empowered to lease an immovable property not exceeding 3 years. In other words, the Commissioner by himself cannot enter into an agreement of lease of any immoveable property by way of lease to any one. There is no dispute in this case that when the lease was granted in favor of the defendant for a period of 3 years ending with 30th of June, 1964, all the formalities as provided in Section 73 and Section 80 which deal with the mode of making contracts were complied with, it is also not in dispute that by efflux of time the lease in favour of the defendant came to an end on the expiry of 30th of June 1964. It is an undisputed fact in this case, that neither the Commissioner nor the Standing Committee assented to the continuance of lease or authorised any one of the Corporation authorities to receive rents from the defendant from 1-7-64. If. under those circumstances, money is paid to the Assistant Revenue Officer, as rent, can it be said that the payment is made to the lessor according to Section 116 of the Transfer of Property Act. On the determination of lease, it is the duty of the lessee to deliver up the possession of the premises to the lessor. If the lessee continues in possession even after the determination of the lease, the landlord undoubtedly has a right to eject him forthwith. He can continue to be in possession of the property only if he establishes that the landlord assented to his continuance by accepting the rent.
9. At this stage we may refer to the decision of the Supreme Court in the case of Dr. H. S. Rikky v. The New Delhi Municipal Committee : 3SCR604 In which it was contended that a lease had come into existence on mere proof of payment of rent to the hands of some officer of New Delhi Municipality. The Supreme Court in that case had to consider Section 47 of the Punjab Municipal Act under which property belonging to the Municipality could be leased out. That section is in these terms:--
'47 (1) Every contract made by or on behalf of the Committee of any Municipality of the first class whereof the value or amount exceeds one hundred rupees, and made by or on behalf of the Committee of any Municipality of the second and third class whereof the value or amount exceeds fifty rupees, shall be in writing, and must be signed by two members, of whom the president or vice-president shall be one, and counter-signed by the Secretary:
Provided that, when the power of entering Into any contract on behalf of the Committee has been delegated under the last foregoing section, the signature or signatures of the member or members to whom the power has been delegated phall be sufficient. (2) Every transfer of immovable property belonging to any committee must be made by an instrument in writing, executed by the president or vice-president and by at least two other members of committee, whose execution thereof shall be attested by the Secretary.
(3) No contract or transfer of the description mentioned in this section executed otherwise than in conformity with the provisions of this section shall be binding on the committee.' It may be observed here that the provisions of the Punjab Municipal Act are analogous to provisions of Section 80 of the Act- Dealing with the contention that payment of rent to one of the officers of the Municipality resulted in an enforceable contract This is what the Supreme Court observed:--
'The same argument was advanced in another form, viz., that the effect of Section 47 of the Municipal Act is not to render the transaction in question between the parties entirely void but it was only declared to be not binding on the Committee. In other words, the argument is that a distinction has to be made between acts which are ultra vires and those for the validity of which certain formalities are necessary and have not been gone through. This distinction assumes an importance where the rights of third parties have come into existence and those parties are not expected to know and the true facts as to the fulfilment of those formalities. That it is so becomes clear from the following statement of the law in Halsbury's Laws of England (3rd Edition, Vol. 15), paragraph 428 at page 227 :--
'Distinction between ultra vires and Irregular acts. A distinction must be made between acts which are ultra vires and those for the validity of which certain formalities are necessary. In the latter case, persons dealing without notice of any informality are entitled to presume omnia rite ease acta. Accordingly a company which, possessing the requisite powers, so conducts itself in issuing debentures as to represent to the public that they are legally transferable, cannot set up any irregularity in their issue against an equitable transferee for value who has no reason to suspect it.'
'In this connection, it is also convenient here to notice the argument that the Committee is estopped by its conduct from challenging the enforceability of the contract The answer to the argument is that where a statute makes a specific provision that a body corporate has to act in a particular manner, and in no other, that provision of law being mandatory and not directory, has to be strictly followed. The statement of the law in paragraph 427 of the same volume of Halsbury's Laws of England to the following effect settles the controversy against the appellants:
Result must not be ultra vires -- A party cannot by representation, any more than by other means, raise against himself an estoppel so as to create a state of things which he is legally disabled from creating. Thus, a Corporation or statutory body cannot be estopped from denying that it has entered into a contract which it was ultra vires for it to make. No corporate body can be bound by estoppel to do something beyond its powers, or to refrain from doing what it is its duty to do.....'
In view of what is stated above, the Supreme Court negatived the plea of the appellant who had claimed that tenancy had come into existence by mere payment of rent to one of the officers of the Municipality. The Supreme Court in effect said under those circumstances that there was no relationship of landlord and tenant between the parties. What is stated in the above case also applies to the facts of the present case. Admittedly the rent is not paid to the Commissioner but the Assistant Revenue Officer. It is not proved that the Commissioner at any time received money as rent after 1-7-1964 with the previous approval of the Standing Committee. That being the case, it is not open to Mr. Sastry to contend that his client was a tenant holding over under Section 116 of the Transfer of Property Act.
Further, he relied upon the following decisions in Kai Khushroo Besonaiee Capadia v. Bai Jerbai Hirjebhoy Warden , Matthews v. Small-wood. (1910) 1 Ch. D. 777, and George Hence Davenport v. The Queen, (1878) 3 AC 115. None of these cases deals with a lease by a statutory body in favour of individual whose powers are circumscribed by statute. All these cases relate to individuals and the facts of those cases have no bearing on the facts of the present case. Therefore, it is not necessary to examine those decisions in the light of the argument advanced by Mr. Sastry. We therefore, hold that the defendant did not become a tenant holding over under the Corporation.
The second question that arises for determination is whether the damages claimed by the Corporation at the rate of Rupees 1901/- per month from 1964 Is excessive. Mr. Sastry while admitting that one B. Janardhana was the highest tenderer and had offered Rs. 1901/- per month and the Corporation had accepted it by its resolution Exhibit P-6, contended that the said Janardhana had not executed any lease deed nor did he deposit three months rent in advance as per the notification issued by the Corporation and in those circumstances, that figure should not be taken to evaluate the damages for use and occupation of the premises. On the facts of this case, it has to be assumed that if the defendant had vacated the premises on 1-7-1964, Janardhana who had offered the highest bid would have taken the premises on rent of Rupees 1901/- per month. Because the defendant did not vacate the premises, the question of execution of lease deed or depositing of three months rent in advance did not arise. However, it is clear from the resolution of the Corporation and other material available in this case that the contract between the Corporation and Janardhana was that the premises should be leased to Janardhana on a rental of Rupees 1901/- per month from 1-7-1964. That figure is the true basis for awarding damages for use and occupation of the premises by the defendant after 1-7-1964.
Mr. Sastry lastly urged that in view of Section 423 of the Act which required the previous sanction of the Standing Committee to file a suit, it must be assumed that when the Commissioner filed the suit on behalf of the Corporation, the Committee was appraised of the fact of payment of Rupees 517-70 per month after 1-7-1964 to one of the officers of the Corporation, and, therefore, it must be assumed that while giving sanction to the; Commissioner to file the suit it must have also looked into the plaint wherein it has been stated that the amount paid by the defendant had been appropriated towards damages. On that basis he claimed that he had proved the acceptance of rent by the Corporation, and if that be so, he was as tenant holding-over under Section 116 of the Transfer of Property Act. The proceedings authorising the Commissioner to institute the suit against the defendant have not been placed before the Court. Further, such a plea has not been taken in the case. In the circumstances, we do not permit him to raise this new plea at this stage nor are we prepared to express any opinion on this point.
In the result, this appeal fails and It is dismissed with costs.