In SIRI CHAND (DECEASED) THR. LRS. vs SURINDER SINGH, the appellant was a landlord of a shop measuring 14 sq. yds. Respondent took the shop on rent @Rs.2,000/- per month for running a hair cutting and dressing work. The respondent-tenant on 27.07.1993 executed an agreement/rent deed undertaking to pay a sum of Rs.2,000/- each month. The rent deed was to be applicable w.e.f. 28.07.1993. The house tax and electricity bills were undertaken to be paid by the tenant. Rent was to be paid up to 5th day in each month to the owner. In event, the tenant failed to make the payment of rent up to the prescribed date in advance, the owner shall have right to get the shop vacated. The shop owner, if is in need of the shop, can serve notice of one month and get the shop vacated from the tenant. The tenant also undertook to make the payment of rent money by increasing 10 per cent each year.
Subsequently, the appellant/landlord filed application before the Rent Controller praying for eviction of the Respondent alleging arrears of rent and house tax and interest on the arrears of rent.
The tenant contended that rate of rent is Rs.1,000/- per month. It was further pleaded that at the time of taking shop in question, no other condition was agreed or settled. However, the signatures were obtained on some blank paper as security by the landlord, which appears to have been fabricated as alleged rent note. The tenant claimed to have paying the rent @Rs.1,000/- per month till February, 2006, after which landlord refused to accept the rent.
Perusing a copy of the impugned rent note dated the Rent Controller held rent deed as proved. The Rent Controller held that rent note is not signed by both the parties and that although time is not specified, but it is not a lease deed, so not compulsorily registrable. The Rent Controller also held that tenant was liable to pay the house tax. The respondent tendered rent @ Rs.2,000/- w.e.f. 28.01.2004, which was accepted under protest. The Rent Controller held that tenant was in arrears of rent and house tax so the respondent-tenant is liable to eviction from the premises in dispute. The Rent Controller held that there exist relationship of landlord and tenant between the parties. The Rent Controller allowed the application of the appellant and directed eviction of the respondent from the premises in question.
The Appellate Court after holding that document was compulsorily registrable took the view that the clause regarding 10% yearly increase cannot be relied and judgment of Rent Controller was accordingly set aside and allowed the appeal filed by the tenant. The revision bench also agreed with the appeal court and the matter came to the Supreme Court.
The questions before the Supreme Court were – Whether the rent deed can be treated to be a lease of immovable property - (i) from year to year (ii) for any term exceeding one year, (iii) or reserving a yearly rent?
The deed had no mention of the term 'lease' nor any time period was specifically mentioned.
The Supreme Court observed that clause (1) of the rent deed specifically makes it clear that monthly tenancy was created on payment of rent of Rs.2,000/- per month. The agreement/rent deed, which is written and signed by the respondent alone contains 16 clauses, which were promises made by the respondent written in the rent deed. The payment was to be made before 5th of each month to the owner. The rent deed does not provide for any specific period for which the rent deed was executed. The rent deed is not also a lease of immovable property from year to year.
Only clause which need to be, thus, considered is as to whether the rent deed was “for any term exceeding one year”. The present is a case where rent deed does not prescribe any period for which it is executed. When the lease deed does not mention the period of tenancy, other conditions of the lease/rent deed and intention of the parties has to be gathered to find out the true nature of the lease deed/rent deed. The two conditions written in the rent note are also relevant to notice. First, if payment of rent in any month is not made up to 5th of month, owner shall have right to get the shop evicted and second if the owner is in need of shop, he by serving notice of one month can get the shop vacated. In Ram Kumar Das Vs. Jagdish Chandra Deo, Dhabal Deb and Another, AIR 1952 SC 23 after quoting Section 106 of the Transfer of Property Act, 1882, this Court held that when there is no period agreed upon between the parties, duration has to be determined by referring to the purpose and object with which the tenancy is created and when the rent reserved is an annual rent, the presumption would arise that the tenancy was an annual tenancy unless there is something to rebut the presumption.
The Supreme Court held that clauses of the rent note makes it clear that there was a categorical promise that tenancy is a monthly tenancy and rent is paid every month by 5th of every month. It is true that although in clause (9), it was mentioned that the tenant will be bound for making the rent money by increasing 10% each year, that was promise by the tenant to increase the rent by 10% each year for the period of tenancy, though the period of tenancy was unspecified. Clause (9) may or may not operate in view of specific clauses reserving right of landlord to evict the tenant on committing default of non-payment of rent by 5th of every month or when landlord requires shop by giving one month’s notice. Clause (9) was a contingent clause which binds the tenant to increase the rent by 10% each year, which was contingent on tenancy to continue for more than a year, but that clause cannot be read to mean that the tenancy was for a period of more than one year. In Kashi Nath and Ors. Vs. Abdur Rahman Khan and Ors., AIR 1922 All. 54, Allahabad High Court had occasion to consider an agreement where defendant had contracted to pay eight annas a year as a rent of the site. The High Court held that when the terms of the lease are looked at, one sees that though in fact it might continue for an undefined number of years, there was no certainty that it would last for more than one year, hence the lease was held not exceeding a term of one year. The Supreme Court also referred to another judgment of Lahore High Court in Mengh Raj Vs. Nand Lal and Ors., AIR 1939 Lah.558, where it was observed that in Mt. Aishan v. Municipal Committee Lahore 92 Ind.Cas. 526 Campbell J. held that a mere recital of an annual rate of rent did not constitute the lease, a lease reserving a yearly rent within the meaning of Section 17, Registration Act. Further in Muhammad Masam Khan v. Mt. Bakhtawar (1895) 70 P.R. 1895 where a Division Bench held on a construction of the document before them that only those leases must be registered which are in terms for a period exceeding one year, a lease reserving a yearly rent, and containing no other provision establishing a tenancy-at-will, being presumably a lease from year to year.
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