PABITRA KUMAR ROY AND ANR.versusALITA DSOUZA

A                        PABITRA KUMAR ROY AND ANR.
                                      v.
                                ALITA D'SOUZA

                                SEPTEMBER 27, 2006

B                   [A.K. MATHUR AND ALTAMAS KABIR,JJ.]


         West Bengal Premises Tenancy Act, 1956-Section 3(2) (as added by
   Amending Act XXIV of 1965)-Applicability of the provision to leases for
C over 20 years, but containing a clause allowing prior determination thereof
  at the instance of either of the parties-Lease for over 20 years-Prior
  determination of by lessor-Suit under Transfer of Property Act for vacation
   of leased premises-Lessee not seeking protection under 1956 Act-Suit
  decreed-Lessee seeking Protection under Transfer of Property Act and
  continuing in possession thereby-Completion of lease period-Lessor seeking
D possession from lessee-Failure to give possession-Suit-Lessee questioning
  maintainability of suit on the ground that tenancy was governed by the
  provisions of 1956 Act-Trial Court and First Appellate Court held that
  protection under 1956 Act not applicable-High Court holding that 1956
  Act was applicable-On appeal, held: The protection under the provision is
E applicable only when ti/!! lease is terminated before its expiry period and not
  after the lease was allowed to run its full course-In the present case defence
  under the provision riot available as the same was taken after expiry of the
  lease period-Lessee was also estopped from taking protection thereunder
  having obtained benefit und<;r proviifion of Transfer of Property Act in the
  earlier suit and_ not having sought p'rotedtion under the 1956 Act-Transfer
F of Property Act, 1882-Sections} l l(g) and 114-Doctrine of estoppel.
          On application of the lessee, after the suit ·med against her was decreed
    protection under Section 114 of Transfer of Property Act was granted and as
    such she retained the possession of the suit premises.

G         Thereafter, on completion of the lease period, lessor called upon the
    lessee to give possession of the suit premises. On failure to do so, lessor
    filed another title suit. Lessee questioned the maintainability of the suit on
    the ground that she was protected under Section 3(2) of West Bengal
    Premises Tenancy Act, 1956. The suit was decreed on the ground that the ·

H                                        678
                        PAB!TRA KUMAR ROY v. ALITA D'SOUZA                         679
      lessee was not liable to seek protection under 1956 Act, she having not sought       A.
      protection under the same in the previous suit and on the contrary herself
      seeking protection under Section 114 of Transfer of Property Act. In first
      appeal, order of Trial Court was confirmed. In Second Appeal, High Court
      reversed the findings of the courts below and held that Section 3(2) of 1956
      Act was applicable to the deed of lease in question. Hence the present appeal.       B
            Allowing the appeal, the Court

            HELD: 1. On a construction of the provisions of Sub-section (2) of
      Section 3 of West Bengal Premises Tenancy Act, 1956, this Court is unable
      to subscribe to the view expressed by the High Court. The intention of the C
      Legislature in amending Section 3 appears to have been to prevent landlords
      from using long term leases as a camouflage for excluding them from the
      protection of the 1956 Act and yet retaining the right of prior determination.
      Sub-section (2) appears to have been enacted to prevent such abuse, inasmuch
      as, once the lease was determined before the fixed period, it attracted the
      proviso thereof. (648-EJ                                                       D
            Mahindra & Mahindra Ltd. v. Kohinoor Debi; 93 C.W.N. 773, referred
      to.

            2. Mere inclusion of a clause for prior determination of a lease, which
      is otherwise for a fixed period of more than twenty years, will not ipso facto       E
      bring it within the exception contemplated in the proviso to sub-section (2) of
      Section 3 of the 1956 Act. The inclusion of such a clause may be taken by
      the tenant as a defence in the event the option under the said clause is
      exercised. Such a defence was not set up by the ~essee in the earlier suit
      when it was available to her and the same is not available to her after the
      lapse of the fixed period of the lease. (685-E-FJ                                    F
...          3. The law is clear that lease deeds for periods of twenty years or more
      would stand excluded from the operation of the 1956 Act except in matters
      relating to Sections 31 and 36 thereof, unless the same were terminable before
      their expiration at the option either of the_landlord or of the tenant. In other     G
      words, if such a lease is terminated before its' fixed period expired, the proviso
      to Section 3(2) would be attracted as a defence against eviction. If, however,
      the lease was allowed to run its full course, both the lease and the conditions
      contained therein would come to an end and would cease to be operative and
      the clause for prior determination would no longer be available as a defence
                                                                                           H
    680                     SUPREME COURT REPORTS [2006] SUPP. 6 S.C.R.

A against eviction. f686-8-CI
          4. The appellants must also succeed on the question of estoppel. Having
    submitted to the jurisdiction of the Court under the Transfer of Property Act
    and having obtained relief thereunder, the respondent cannot in the present
    suit claim protection under the provisions of the West Bengal Premises
B   Tenancy Act, 1956, to which she is not, in any event, entitled, in terms of the
    lease deed. f686-DI

          CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2380 of 200 I.

          From the Judgment and Final Order dated 10.9.1999 of the High Court
C of Calcutta in S.A. No. 595/1997.
          P.S. Misra, Hiren Dasan, Dhruv Kumar Jha, Ram Roy and Bijan Ghosh
    for the Appellants.

          Rana Mukherjee, Siddharth Gautam and Goodwill lndeevar for the
D Respondent.
          The Judgment of the Court was delivered by

           ALT AMAS KABIR, J. The appeal raises an interesting question of law
    relating to the interpretation of Sub-section (2) of Section 3 of the West
E   Bengal Premises Tenancy Act, 1956 (hereinafter referred to as 'the 1956 Act')
    which does not appear to have been considered earlier for its full scope and
    effect. The question relates to the applicability of Sub-section (2) of Section
    3 of the 1956 Act to leases which were executed for periods of over twenty
    years but containing a. clause allowing prior determination at the instance of
F   either the lessor or the lessee. Prior to 1965, the said Section was comprised
    only of one Section which is now numbered as Sub-section (1). Sub-section
    (2) was added by Amending Act XXIX of 1965. Since we shall be considering
    the provisions of Section 3 in this appeal, at some length, the same as it
    stands, after amendment, is reproduced hereinbelow for reference:-

G          "3. Certain provisions of the Act not to apply to certain leases.-(1)
           The J>rovisions relating to rent and the provisions of sections 31 and
           36 shall apply to any premises held under a lease for residential
           purpose of the lessee himself and registered under the Indian
           Registration Act, 1908, where-

H
      PABITRA KUMAR ROYv. ALITA D'SOUZA [ALTAMAS KABIR, J.] 681

             (a) such lease has been entered into on or after the 1st December       A
             1948,and
             (b) such lease is for a period not more than 20 years, and save
             as aforesaid nothing in this Act shall apply ~o any premises held
             under a lease for a period of not less than 15 years.
        (2) Notwithstanding anything to the contrary in sub-section (I) but          B
        subject to sub-section (3) of section 1, this Act shall apply to all
        premises held under a lease which has been entered into after the
        commencement of the West Bengal Premises Tenancy (Amendment)
        Ordinance, 1965:

            Provided that if any such lease is for a period of not less than 20
                                                                                     c
        years and the period limited by such lease is not expressed to be
        terminable before its expiration at the option either of the landlord or
        of the tenant, nothing in this Act, other than the provisions relating
        to rent and the provisions of sections 31 and 36, shall apply to any
        premises held under such lease."                                             D
       As will appear from the facts involved in this appeal, by a registered
deed of lease dated 13th January, 1969, the predecessor-in-interest of the
appellants let out the ground floor flat with one garage, measuring 1200 sq.ft.,
in premises No.29/1, Bondel Road, Calcutta 700019, to the respondent on a
rental of Rs.450/-per month. The lease commenced with effect from 1st January,       E
1969, and was for a period of 21 years. The lease deed contained a clause
which permitted the parties to terminate the lease prior to its expiry with notice
from either side.

      On 29th September, 1972, when the lease was subsisting, the lessor
served a notice determining the lease under Section 111 (g) of the Transfer of F
Property Act, 1882. The lessee was asked to quit and vacate and deliver
possession to the lessor on the expiry of the notice period. Inasmuch as, the
lessee did not vacate the premises, the lessor filed a suit, being Title Suit
No.3/1973, for eviction of the lessee from the suit premises and for recovery
of arrear rents and damages. The said suit was decreed by the 2nd Subordinate G
Judge at Alipore under Section 111 of the Transfer of Property Act, 1882, on
the ground of default. However the lessee made an application for protection
under Section 114 of the Transfer of Property Act, 1882, and on payment of
the arrear rents, he was entitled to retain his possession of the suit premises.

                                                                                     H
    682                      SUPREME COURT REPORTS [2006) SUPP. 6 S.C.R.

A          Subsequently, on completion of the period of 21 years reserved in the
    lease deed, in 1990, the lessor, who is represented by the appellants herein,
    called upon the lessee (the respondent herein) to hand over peaceful and
    vacant possession of the suit premises. On the failure of the respondent to
    do so, the lessor filed another suit, being Title Suit No.71/1990, in the court
B   of the Second Munsif, Alipore, for ejectment. In his written statement the
    respondent took a stand that the suit was not maintainable since the respondent
    was a tenant protected under the provisions of the 1956 Act. The Trial Court
    by its judgment and decree dated 29th June, 1996, negated the defence taken
    by the respondent herein that she had been inducted as a monthly tenant and
    decreed the suit upon holding that the respondent had failed to establish her
C   claim ofmonthly tenancy.

         Apart from the above, the trial court also took note of the fact that the
  earlier suit had been filed under the provisions of the Transfer of Property
  Act, 1882, and at no point of time had the respondent taken the plea that her
  tenancy was governed by the provisions of the 1956 Act. The trial court took
D note of the fact that, on the other hand, the respondent had herself obtained
  relief against eviction under Section 114 of the Transfer of Property Act, 1882.

          On the said two grounds, the trial court decreed the suit for eviction
    against the respondent herein.

E           The respondent preferred an appeal against the said judgment and
     dei;ree of the trial court, being Title Appeal No. 246/1996. The first appellate
    court also rejected the respondent's claim of having been inducted as a
    monthly tenant and affirmed the judgment of the trial court by holding that
    the decision in Title Suit No.3/1973 attracted the provisions of Section 11 of
F   the Civil Procedure Code, 1908, relating to the applicability of the Transfer of
    Property Act to the leasehold premises and held further that the said question
    could not. be reopened. It was also held by the 1st appellate court that the
    tenancy created by the deed of lease dated 13th January, 1969 would not be
    governed by the 1956 Act in view of the provisions of Section 3 (2) thereof.
    In arriving at such conclusion, the Ist appellate court referred to and relied
G   upon the decision of this Court in Savita Dey v. Nageswar Majumdar and
    Anr.• reported in AIR (1996) SC 272. Aggrieved by the said order, the
    respondent preferred a second appeal before the Calcutta High Court which
    was numbered as Second Appeal No. 595/1997. By judgment and order dated
    I0th September, 1999, the High Court allowed the second appeal upon reversing
H   the finding of the courts below regarding the applicability of the 1956 Act to
     PABITRAKUMAR ROYv. ALITA D'SOUZA [ALTAMAS KABIR, J.]                   683
the deed of lease executed by the lessor on 13th January, 1969. The High            A
Court also disagreed with the finding that the decision in the earlier suit (T.S.
No.3/ 1973) operated as res judicata as far as the plea of protection under the
1956 Act is concerned.

     This appeal has been preferred against the said judgment of reversal of
the Calcutta High Court.                                                            B
       Appearing in support of the appeal, Mr. P.S. Mishra, Senior Advocate,
reiterated the stand of the appellant before the courts below and submitted
that the defendant-respondent was precluded by the principle of res judicata
from contending that her tenancy was protected under the provisions of the C
1956 Act. He urged that since the respondent had obtained the benefit of
Section 114 of the Transfer of Property Act in the earlier suit, she was
estopped from raising a defence in the later suit that her tenancy was protected
under the proviso to Sub-section (2) of Section 3 of the 1956 Act..

        It was also contended that apart from the question of res judicata, the D
High .Court had erroneously reversed the findings of the courts below regarding
the applicability of the 1956 Act to the tenancy created by the lessee having
regard to the clause which entitled both the lessor and the lessee to terminate
the lease during its subsistence. It was submitted that since the lease was for
a fixed period of twenty one years and was allowed to run for the full length
of its term and the respondent remained in possession of the demised premises E
throughout the period of lease, the High Court had erred in holding that such
clause brought the lease within the protection of the 1956 Act.

     Mr. Mishra submitted that the decision of this Court in Savita Dey v.
Nageswar Majumdar and Anr., (supra), fully supported the case of the
appellant and the High Court had erroneously reversed the judgments of the          F
courts below.

      The application of the principles of res judicata and estoppel was
denied by Mr. Rana Mukherjee, learned advocate, appearing for the respondent.
According to him, the respondent was not precluded from claiming that the G
lease granted in her favour was protected under Section 3 (2) of the 1956 Act,
merely because the provisions of Section 114 of the Transfer of Property Act
had been invoked in the earlier suit. It was contended that the object of
Section 114 of the Transfer of Property Act, 1882, was similar to the object
of Section 17(4) of the 1956 Act and it was immaterial which of the two
provisions was invoked in a given case and, in any event, the question was H
    684                     SUPREME COURT REPORTS [2006] SUPP. 6 S.C.R.

A a pure question of law to which the rule of res judicata would not apply as
    was held by this Court in Mathura Prasad Bajoo Jaiswa/ and Ors. v. Dosvibai
    N.B.Jeejeebhoy, [1970) I SCC613.

         Mr. Mukherjee submitted that the language of Section 3(2) of the 1956
  Act made it clear that on account of the prior determination clause the lessee
B enjoyed the protection of the 1956 Act. It was urged that the lease had, in
  fact, been determined during its subsistence by a notice issued by the
  appellants on 29th September, 1972, followed by a suit for eviction on the
  basis thereof. The exercise of the option of prior determination brought the
  lease within the ambit and protection of the 1956 Act. It was not, therefore,
C a case of uninterrupted continuance of the lease for a fixed period of 21 years
  on account of the break that had been effected by the determination of the
  lease within three years from the date of its execution. There was, therefore,
  no error in the High Court's finding that on account of the clause relating to
  prior determination, the lease would be governed by the provisions of the
  1956 Act notwithstanding the fact that the earlier suit had been filed and
D conducted under the provisions of the Transfer of Property Act.
          On a construction of the provisions of Sub-section (2) of Section 3 of
    the 1956 Act, we are unable to subscribe to the view expressed by the High
    Court. The intention of the Legislature in amending Section 3 appears to have
    been to prevent landlords from using long term leases as a camouflage for
E   excluding them from the protection of the 1956 Act and yet retaining the right
    of prior determination. Sub-section (2) appears to have been enacted to
    prevent such abuse, inasmuch as, once the lease was determined before the
    fixed period, it attracted the proviso thereof.

F         This aspect of the matter was noticed by a Division Bench of the
    Calcutta High Court in Mahindra & Mahindra Ltd. v. Kohinoor Debi, 93
    C.W.N. Page 773, while considering the applicability of Sub-section (2) of
    Section 3 of the 1956 Act to a lease governed by Sub-section ( 1) thereof and
    it was observed therein as follows :-

G          "A lease for, say, 21 years would not cease to be, but would remain,
           such a lease in the eye of law even if the lessee has been given an
           option to terminate it earlier. If a lease for a fixed term with the right
           or option for removal in favour of the lessee remains a lease for that
           fixed term only, until the option is exercised, a lease for a fixed term
           with the right or option in favour of the lessee of earlier termination
H
     PABITRAKUMARROYv. ALITAD'SOUZA [ALTAMAS KABIR,J.] 685

       should also remain a lease for a period fixed, as the option in each          A
       case creates, enlarges, limits or extinguishes no right, title or interest,
       until exercised."

      Although, ultimately the matter was decided on other considerations,
the aforesaid exposition appears to us to be a correct appreciation of the law.
                                                                                     B
      A somewhat similar question came up for consideration before this
Court in Savi/a Dey v. Nageswar Majumdar and Anr.. (supra) which had been
cited before the High Court. While considering the said decision the High
Court merely observed that in the said case what had been decided was that
the lease for a fixed period of twenty one years was not governed by Section
3(2) of the 1956 Act having been entered into prior to the enforcement of the C
amendment made to the provision. The High Court did not take into
consideration the decision relating to the precariousness of a tenure which
was terminable prior to its full duration and the observation that such
suggested precariousness of the tenure did not arise in the facts of the case
because the lessee/tenant had fully enjoyed the period of lease of twenty D
years, which is also the case in the instant appeal. Although, in the instant
case, the tenancy was terminated by notice during the fixed period of lease, .
the lessee continued to occupy the demised premises without interruption for
the full period of twenty one years.

      The decision in Savita Dey's case makes the position clear that the mere       E
inclusion of a clause for prior determination of a lease, which is otherwise for
a fixed period of more than twenty years, will not ipso facto bring it within
the exception contemplated in the proviso to Sub-section (2) of Section 3 of
the 1956 Act. The inclusion of such a clause may be taken by the tenant as
a defence in the event the option under the said clause is exercised. Such a         F
defence was not set up by the lessee in the earlier suit when it was available
to her and the same is not available to her after the lapse of the fixed period
of the lease.

      As was indicated by the Calcutta High Court in the Mahindra and
Mahindra case (supra) a lease for a fixed period does not cease to be'so by G
the inclusion of a clause entitling either the lessor or the lessee to determine
the lease prior to its expiry, unless such option is actually exercised.

      In the impugned judgment under appeal, the High Court went wrong in
holding that it had been found that the lease in question was governed by
Section 3(2) of the 1956 Act. To the contrary, both the trial Court and the !st      H
     686                     SUPREME COURT REPORTS [2006] SUPP. 6 S.C.R.

A Appellate Court held that the deed of lease was not governed by the provisions
     of the 1956 Act under Section 3(2) and such finding was reversed by the High
     Court on a misapplication of the decision in Savita Dey 's case.

           The law is clear that lease deeds for periods of twenty years or more
    would stand excluded from the operation of the 1956 Act except in matters
B   relating to Sections 31 and 36 thereof, unless the same were terminable before
    their expiration at the option either of the landlord or of the tenant. In other
    words, if such a lease is terminated before its fixed period expired, the proviso
    to Section 3(2) would be attracted as a defence against eviction. If, however,
    the lease was. allowed to run its full course, both the lease and the conditions
C   contained therein would come to an end and would cease to be operative and
    the clause for prior determination would no longer be available as a defence
    against eviction.

        The appeal must also be allowed on the question of estoppel. Having
  submitted to the jurisdiction of the Court under the Transfer of Property Act
D and having obtained relief thereunder, the respondent cannot in the present
  suit claim protection under the provisions of the West Bengal Premises
  Tenancy Act, 1956 to which she is not, in any event, entitled, in terms of the
  lease deed dated 13th January, 1969.

           The appeal is accordingly allowed. The judgment and decree of the
E   High Court is set aside and that of the trial Court is restored. The respondent
    is granted time till 3 lst December, 2006, to vacate the premises and make over
    peaceful possession thereof to the appellants subject to filing of the usual
    affidavit within fifteen days.

    K.K.T.                                                        Appeal allowed.