BHUNESHWAR PRASAD AND ANR.versusUNITED COMMERCIAL BANK AND ORS.

                  BHUNESHWAR PRASAD AND ANR.                                    A
                                     v.
               UNITED COMMERCIAL BANK AND ORS.

                            AUGUST 25, 2000

  [SYED Sl-IAH MOHAMMED QUADRI AND Y.K. SABHARWAL, JJ.]                         B

      Rent Control and Eviction :

       Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982-Section
11-Lease of suit-premises-Expiry of lease period-Request for renewal of
lease rejected-Notice to tenant to vacate premises-Payment of enhanced rent
                                                                                c
by tenant after expiry of lease period at the direction of landlord-Claim of
monthly tenancy-Validity of-Held, there is no monthly tenancy unless there is
an agreement, express or implied-However, in view of the facts and circum-
stances of the case, there is an implied agreement-Transfer of Property Act,
                                                 1
1882-Section IJ 6.                                                              D

       Appellants gave suit-premises to Respondent-Bank on lease. The
lease was renewed from time to time for a period of 5 years by the
appellants on respondent's request. The respondent did not exercise option
for renewing the lease as per the lease agreement before the end of the
                                                                                E
lease period in March. Therefore, after the lease period, the appellants
communicated to the respondent to vacate the premises. On receiving the
communication, the respondent requested the appellants for renewal of
lease which was rejected. The respondent continued to deposit the rent in
the account of the appellants. The appellants filed an eviction petition
before Trial Court under section 11(1) of Bihar Buildings (Lease, Rent and      F
Eviction) Control Act, 1982, which was decreed in favour of the appellants.
In appeal by the respondent, High Court set aside the decree and judgment
of the Trial Court.

      In appeal to this Court, the appellants contended that the respondent
                                                                                G
deposited the rent without consent; and that the deposit and acceptance of
rent does not create monthly tenancy under Section 116 of the Transfer of
Property Act, 1882.

       Respondent, on the other hand, contended that after the lease pe-
riod, it deposited enhanced rent on the direction of the appellants, which      H
                                    635
    636                 SUPREME COURT REPORTS               (2000] SUPP. 2 S.C.R.
A   was withdrawn; and that the lease is renewed from month to month.

          Dismissing the appeal, the Court

           HELD : 1.1. To bring a new tenancy into existence within the mean-
    ing of the Section 116 of the Transfer of Property Act, 1882 there should be
B   an agreement. The section contemplates that on one side, there should be
    an offer of taking a fresh demise evidenced by lessee's continuing occupa-
    tion of the property after the expiry of the lease and on the other side, there
    must be a definite assent to this continuance of possession by the lessor/
    landlord and that such an assent of the landlord cannot be assumed in
    cases of tenancies to which Rent Restriction Acts apply on account of the
c   immunity from eviction which a tenant enjoys even after the expiry of
    lease. In such cases, the landlord cannot eject him execpt on specified
    grounds mentioned in the Rent Restriction Acts and thus the acceptance of
    rent by the landlord from a statutory tenant, whose lease has already
    expired, would not be taken as evidence of new agreement of tenancy and
D   it would not be open to such a tenant to urge that by acceptance of rent, a
    fresh tenancy was created. A lessor is not expected notto accept the rent
    when, in view of the protection granted by the Rent Restriction laws,
    without existence of one or the other ground, he is precluded from seeking
    eviction of the lessee and in such a case, there would be no question of
    creation of tenancy from month to month. Under these circumstances,
E
    mere acceptance of amount equivalent to rent or the standard rent would
    not attract Section 116 of the Act. Assent to lessee continuing in possession
    would be absent in such cases. However, an agreement creating fresh
    tenancy within the meaning of Section 116 can be implied from the conduct
    of the parties. The whole basis of Section 116 of the Act is that a landlord is
F   entitled to file a suit for ejectment and obtain a decree for possession and,
    therefore, his acceptance of rent after expiry of lease is an unequivocal act
    referable to his desire to assent to the tenant continuing possession. It
    would be absent in cases where there are restrictions as contemplated by
    Rent laws. In such cases, therefore, it is for the tenant to establish, where it
G   is said that the landlord accepted the rent not as a statutory tenant but
    only as a legal tenant, indicating his assent to tenant's continuing posses-
    sion. [639-F-H; 640-A-F]

          1.2. In the present case, the bank, from the conduct of the owners
    established that the acceptance of increased rent was in token of owners'
H   assent to the bank continuing in possession after expiry of the lease, thereby
BHUNESHWAR PRASAD v. UNITED COMMERCIAL BANK [Y.K. SABHARWAL, J.] 637

creating lease from month to month within the meaning of Section 116 of             A
Transfer of Property Act, 1882. The High Court has rightly reversed the
judgment and decree of the trial court. It is made clear that this Court is
not concerned with the proceedings for fixation of the rent if any, pending
before the appropriate authorities under the Act, as the same are not the
subject matter of the appeal and the fixation of the standard rent and from         B
when it is payable is a matter to be decided by the said authorities in
accordance with law. [640-H; 641-A]

      Ganga Dutt Murarka v. Kartik Chandra Das & Ors., [1961) 3 SCR 813,
relied on.

     Bhawanji Lakhamshi & Ors. v. Himatlal Jamnadas Dani & Ors., [1972)
                                                                                    c
1 sec 388, distinguished.

      Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden & Anr.,
(1949) Federal Court Reports 262, referred to.

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11756 of 1996.
                                                                                    D

     From the Judgment and Order dated 3.4.96 of the Patna High Court in
C.R. No. 2159 of 1994.

     S.B. Sanyal, Ranjan Mukherjee, Ms. Manita Verma, Avik Datta, R.D.
Upadhyay, Chanchal Kumar Ganguli and S.C. Ghosh for the appearing parties.          E

      The Judgment of the Court was delivered by

      Y.K. SABHARWAL, J. The appellants and respondents 3 to 7 are
owners and landlords of the premises in question. United Commercial Bank-
respondent No.I is the tenant. Respondent No.2 is an officer of the bank.           F
       A suit seeking a decree of eviction of the bank from the premises was
filed by the owners. It has been, inter alia, alleged in the plaint that the bank
was inducted as a tenant in the premises for a fixed period of five years
commencing from 1st April, 1981 to 31st March, 1986 through a registered
                                                                                    G
deed of lease. The bank was given an option to get the lease renewed for two
terms of five years each provided it gives notice for renewal of the lease each
time one month prior to the expiration of the period of lease. The bank
exercised this option one month prior to 31st March, 1986 and accordingly the
lease was renewed for the period from !st April, 1986 to 31st March, 1991 at
a monthly rent of Rs. 10,876. It seems that before 31st March, 1991, the bank       H
    638                  SUPREME COURT REPORTS               r20001 suPr. 2 s.c.R.
A   did not exercise option for renewal of the lease. The bank was asked to vacate
    the premises by 31st May, 1991 under plaintiff's letter dated 22nd April, 1991.
    Now, the bank by letter dated 24th April, 1991 requested the plaintiffs for
    renewal of lease but the plaintiffs did not agree and requested for vacation of
    the premises. It has also been stated in the plaint that after expiry of lease on
    31st March, 1991, the bank used to deposit the rent in the account of the
B
    plaintiffs in their branch but that was without their consent and mere payment
    of rent without consent would not create any fresh tenancy. Under the aforesaid
    circumstances, the owners sought eviction of the bank on the sole ground of
    expiry of the period of the lease under clause (e) of sub-section (I) of Section
    11 of Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982 (for short
c    'the Act').

           The suit was resisted by the bank, inter alia, pleading that the bank has
    been in occupation of the premises as tenant since 1963 and from time to time
    the rent has been enhanced. The bank has claimed to be a tenant month to
    month. The bank pleaded that it regularly deposited the rent in the account of
D   the plaintiffs and they were withdrawing the rent so deposited every month
    after 31st March, 1991 at the enhanced rate of rent of Rs. 13,595 per month
    in place of Rs. 10,876. The bank pleaded that the amount is being paid as
    monthly rent as per its letter dated 7th September, 1991 addressed to the owners
    and after discussion, they agreed to receive the said enhanced rent and are
E   withdrawing the same. It has thus been claimed that the bank is not tenant for
    any fixed term period but is a monthly tenant.

           A decree for eviction on the ground above stated was passed by the trial
    court directing the bank to deliver vacant possession of the premises to the 1
    plaintiffs. In revision petition, however, judgment and decree of the trial court
F   has been set aside by the High Court. The said judgment is under challenge in
    this appeal.

          The High Court has recorded the finding of fact that even after expiry
    of period of lease, rent of the premises at the increased rate, as per request of
    the plaintiffs, was regularly deposited by the defendant in their bank in the
G   accounts of the plaintiffs which have been subsequently withdrawn by them.
    Admittedly, the rent under the lease for the period up to 31st March, 1991 was
    Rs. 10,876 per month. The High Court has further held that the plaintiffs asked
    the bank as per their letter dated 5th September, 1992 to deposit the rent of the
    premises at the increased rate and the bank deposited rent at the enhanced rate
H   which amount was withdrawn by the plaintiffs. The amount being deposited
BHUNESHWAR PRASAD v. UNITED COMMERCIAL BANK [Y.K. SABHARWAL, J.] 639

by the bank after 3 lst March, 1991 was at the rate of Rs. 13,595 per month.           A
The High Court has held that "it is admitted position that the plaintiffs accepted
25 per cent increased amount of monthly rent of the premises in question which
is evident from Exs. B-3 and B-4." The question to be considered, therefore,
is as to the effect of payment of enhanced rent by the bank to the owners. Does
it create or not a fresh tenancy from month to month within the meaning of
                                                                                       B
Section 116 of the Transfer of Property Act? Learned counsel for the appellants
contends that mere acceptance of rent does not create tenancy from month to
month because of the protection from eviction available to the bank under the
provisions of the Act.

       The present is not a case of the payment and acceptance of the rent which
was stipulated in the lease deed. It is also not the case where standard rent fixed
                                                                                       c
by any authority has been paid. The increased rent as aforestated was deposited
after 3 lst March, 1991. The same was accepted by withdrawal of the amount.
In terms of letter dated 5th September, 1992, in fact, the owners asked for
payment of the rent "hitherto deposited." It has been established on the record
that the rent demanded, deposited and withdrawn was increased rent. In the             D
light of these established facts, we would examine whether in law monthly
tenancy as contemplated by Section 116 of the Transfer of Property Act, 1882
came into existence or not.

        Mr. Sanyal, learned senior counsel appearing for the appellants contends
that Section 116 of the Transfer of Property Act would not be attracted merely         E
on acceptance of rent. Reliance is placed upon a decision of Federal Court in
Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden & Anr.,
(1949) Federal Court R.eports 262. We agree that to bring a new tenancy into
existence within the meaning of Section 116, there should be an agreement as
the section contemplates that on one side, there should be an offer of taking          F
a fresh demise evidenced by lessee's continuing occupation of the property
after the expiry of the lease and on the other side, there must be a definite assent
to this continuance of possession by the lessor/landlord and that such an assent
of the landlord cannot be assumed in cases of tenancies to which Rent Restric-
tion Acts apply on account of the immunity from eviction which a tenant enjoys
                                                                                       G
even after the expiry of lease. In such cases, the landlord cannot eject him
except on specified grounds mentioned in the Rent Restriction Acts and thus
the acceptance of rent by the landlord from a statutory tenant, whose lease has
already expired, would not be taken as evidence of new agreement of tenancy
and it would not be open to such a tenant to urge that by acceptance of rent,
a fresh tenancy was created. We do not expect a lessor not to accept the rent          H
    640                 SUPREME COURT REPORTS               [2000] SUPP. 2 S.C.R.
A   when, in view of the protection granted by the Rent Restriction laws, without
    existence of one or the other ground, he is precluded from seeking eviction of
    the lessee and in such a case, there would be no question of creation of tenancy
    from month to month. Under these circumstances, mere acceptance of amount
    equivalent to rent or the standard rent would not attract Section 116. Assent
    to lessee continuing in possession would be absent in such cases. However, an
B
    agreement creating fresh tenancy within the meaning of Section 116 can be
    implied from the conduct of the parties. In Ganga Dutt Murarka v. Kartik
    Chandra Das and Ors., [1961] 3 SCR 813, while affirming the dictum laid
    down in Khushroo 's case (supra), it was held that apart from an express
    contract, conduct of the parties may undoubtedly justify an inference that after
c   determination of the contractual tenancy, the landlord had entered into a fresh
    contract with the tenant, but whether the conduct justifies such an inference
    must always depend upon the facts of each case. In Bhawanji Lakhamshi and
    Ors. V. Himatlal Jamnadas Dani and Ors., (1972] 1 sec 388, again the
    question that came up for consideration was as to whether a fresh tenancy was
D   created or not by acceptance of rent by the lessor after the termination of the
    tenancy by efflux of time. This Court declined the prayer to reconsider Ganga
    Dutt Murarka's case (supra) and held that acceptance by landlord from the
    tenant, after the contractual tenancy had expired, of amounts equivalent to rent
    or amounts which was fixed as standard rent did not amount to acceptance of
    rent from a lessee within the meaning of Section 116 of the Transfer of Property
E   Act. The present is not a case of acceptance of amounts equivalent to rent or
    amounts fixed as standard rent but acceptance of increased rent. It was also
    observed that "we do not say that the operation of Section 116 is always
    excluded whatever be the circumstances under which the tenant pays the rent
    and the landlord accepts it." The whole basis of Section 116 is that a landlord
F   is entitled to file a suit for ejectment and obtain a decree for possession and,
    therefore, his acceptance of rent after expiry of lease is an unequivocal act
     referable to hi~ desire to assent to the tenant continuing possession. It would
     be absent in cases where there are the restrictions as contemplated by Rent
     laws. In such cases, therefore, it is for the tenant where it is said that the
     landlord accepted the rent not as a statutory tenant but only as a legal tenant
G    indicating his assent to tenant's continuing possession. to establish it.

           In the present case, the bank from the conduct of the owners has estab-
    lished that the acceptance of increased rent was in token of owners assent to
    the bank continuing in possession after expiry of the lease, thereby creating
    lease from month to month within the meaning of Section 116 of Transfer of
H
BHUNESHWAR PRASAD v. UNITED COMMERCIAL BANK [Y.K. SABHARWAL, J.] 641

Property Act, 1882. The High Court has rightly reversed the judgment and           A
decree of the trial court. Before parting we may make it clear that we are not
concerned with the proceedings for fixation of the rent if pending before the
appropriate authorities under the Act, as the same are not the subject matter of
this appeal and the fixation of the standard rent and from when it is payable
is a matter to be decided by the said authorities in accordance with law.
                                                                                   B
       For the aforesaid reasons, we dismiss the appeal. The parties are, how-
ever, left to bear their costs.

B.S.                                                        Appeal dismissed.