Holding

Because the 1945 lease incorporated the renewal covenant without reservation, the assignee was entitled to one further 50‑year renewal, and the Land Acquisition Act could not be used to deny that renewal.

Summary

The State of Uttar Pradesh leased a 5‑acre government parcel for 50 years in 1887 with a covenant allowing the lessee to renew for another 50 years. The original lessee transferred his interest to Lalji Tandon, who, as assignee, exercised the renewal option and obtained a fresh lease on 20‑Feb‑1945 that incorporated all covenants of the original lease, including the renewal clause, without reservation. When the term of the 1945 lease expired in 1987, Tandon sought a further 50‑year renewal, but the State refused, arguing that the renewal right was exhausted and that the land had been acquired under the Land Acquisition Act, 1894. The High Court ordered the State to renew the lease; the State appealed to the Supreme Court. The Court held that the 1945 lease’s referential incorporation of the renewal covenant entitled the assignee to one more renewal of 50 years, that the Land Acquisition Act cannot be invoked to deny renewal of State‑owned land, and that a breach of lease terms does not preclude renewal where re‑entry was not exercised.

Issues considered

The effect of a referential incorporation of a renewal covenant in a fresh lease on the right to a further renewal.
Whether a lease may be perpetual under the Transfer of Property Act, 1882.
Whether the Land Acquisition Act, 1894, can bar renewal of a lease of State‑owned land.
Whether alleged breach of lease terms can defeat the lessee’s right to renewal.

Legislation cited

Land Acquisition Act, 1894s. 4, s. 6
Transfer of Property Act, 1882

Subjects

lease renewalcovenant for renewalTransfer of Property ActLand Acquisition Actperpetual leasegovernment leasemandamus

Judgment

STATE OF U.P. AND ORS. A
v.
LALJI TANDON (DEAD) THROUGH LRS.

NOVEMBER 3, 2003

[R.C. LAHOTI AND ASHOK BHAN, JJ.] B
)

Transfer of Property Act, 1882-Government land given on lease for 50
years-Principal lease deed containing covenant for renewal-Assignee of
original lessee exercising option for renewal-Execution of fresh lease deed C
incorporating all covenants of original lease, with option to seek renewa/-
Re-exercise of option for renewal-Grant of-Held: As in the fresh lease deed
covenant for renewal has been referentially incorporated without any
reservation, assignee entitled to one more renewal for fifty years and not
thereafter.
D
Land Acquisition Act, I 894-Sections 4 and 6-Land owned by the
State-Denial of renewal of lease as land acquired by the State-Correctness
of- Held: Such land is beyond the purview of the Land Acquisition Act-
Hence, cannot be denied renewal in the garb of acquisition notification and
declaration.
E
Government land was given on lease for a term of 50 years to the
original lessee. The lease contained a renewal clause conferring option on
the lessee to seek renewal of lease for another term of 50 years. The term
of 50 years ended in 1937. Lessee alienated his interest in the suit property
to the respondent. Respondent-assignee of the original lessee exercised his F
option for renewal. State Government-lessor renewed the lease by
executing fresh lease deed but belatedly on 20.02.1945. It incorporated all
the covenants of the original lease including covena_nt of renewal.
Respondent sought for renewal of the lease for another term of 50 years.
State officials recommended renewal and also advised the renewal to be
expedited. Government was issuing instructions to its officers generally G
directing them to renew such like leases. State Government did not renew
the lease. Respondent filed a writ petition seeking writ of mandamus. High
t Court directed the State to renew the lease. Hence the present appeal.

Appellant-State contended that the respondent was entitled only for
77 G
78 SUPREME COURT REPORTS [2003) SUPP. 5 S.C.R.

A one renewal for a term of 50 years consistently with the covenant for
renewal contained in the original lease executed in favour of the original
lessee which right to renewal stood exhausted with the lease deed of
20.2.1945 on the expiry of 42 years 2 months and 20 days from the date
of the lease; that the first renewal shall be deemed to have renewed all
B other covenants incorporating the rights and obligations between the lessor
and the lessee excepting the clause for renewal, else it would result in
creating a lease in perpetuity; and that the land having been acquired by '
the State and also the respondent-State committed breach of the terms of
the lease, there could be no renewal of lease.

C Dismissing the appeals, the Court

HELD : 1.1. In India, a lease may be in perpetuity. Neither the
Transfer of Property Act nor the general law abhors a lease in perpetuity.
Where the principal lease executed between the parties contains a covenant
for renewal, its exercise is a unilateral act of the lessee, and the consent
D of the lessor is unnecessary. Such lease is renewed in accordance with the
said covenant and whether the renewed lease shall also contain similar
clause for renewal depends on the facts and circumstances of each case
regard being had to the intention of the parties as displayed in the original
covenant for renewal and the surrounding circumstances. There is a
difference between an extension of lease in accordance with the covenant
E in that regard contained in the principal lease and renewal oflease, again
in accordance with the covenant for renewal contained in the original lease. •
In the case of extension it is not necessary to have a fresh lease deed
executed as the extension of lease for the term agreed upon shall be a
necessary consequence of the clause for extension. However, option for
F renewal consistently with the covenant for renewal has to be exercised
consistently with the terms thereof and, if exercised, a fresh lease deed
shall have to be executed between the parties. Failing the execution of a
fresh lease deed, another lease for a fixed term shall nut come into existence
though the principal lease in spite of the expiry of the term thereof may
continue by holding over for year by year or month by month, as the case
G may be. (84-H; 85-A-E)
1.2. In the instant case, the respondent is not claiming a lease in
perpetuity or right to successive renewals under the covenant for renewal
contained in the 1887 lease. Fresh lease executed on 20.2.1945 does not
H set out any fresh covenants, mutually agreed upon between the parties for
STA TE OF U.P. v. LALJI TANDON (DEAD) THROUGH LRS. 79
the purpose of renewal. It incorporates all the covenants, provisos and A
stipulations as contained in the principal lease as if they had been repeated
in full. Lease deed executed and also the conduct of the parties shows that
at the end of the term appointed by the 1945 lease, i.e. 1987, the lessor
did not exercise its right of re-entry but, the respondent exercised his
option for renewal. The officials of the appellant-State recommended B
renewal and advised the State Government to expedite the renewal. The
) State Government was generally renewing such like leases by issuing
general orders/instructions to its officers. Also at no point of time prior
to the filing of the counter-affidavit, on the present litigation having been
initiated, the State or any of its officers took a stand that the right of
renewal, as contained in the principal deed of lease, having been exhausted C
by exercise of one option for renewal, was not available to be exercised
again. Therefore, as the covenant for renewal has been referentially
incorporated without any reservation in the lease deed of 1945 the exercise
of option for renewal cannot be denied to the respondent. However, in the
lease deed to be executed for a period of 50 years commencing May 20,
1987, the covenant for renewal need not be incorporated and, therefore, D
the term of the lease would come to an end on expiry of 50 years calculated
from May 20, 1987. (88-8-H)

Syed Jaleel Zane v. P. Venkata Mur/idhar and Ors., AIR (1981) AP
328 and Secretary of State/or India in Council v. A.H. Forbes, (1912) 17 IC E
180, approved.

State of U.P. and Ors: v. Purshottam Das Tandon and Ors., (1989) Supp.
2 sec 412, referred to.

Baker v. Merckel, [1960) 1 All ER 668 and Green v. Palmer, (1944) 1 F
All ER 670, referred to.

Transfer ofProperty Act by Mu/la, Ninth Edition, 1999, pp.1011, 1204,
referred to.

2.1 •. The submission that the land having been acquired there could G
be no renewal of lease, cannot be accepted. It would be an absurdity to
comprehend the provisions of the Land Acquisition Act being applicable
to such land wherein the ownership or the entirety of rights already vests
in the State. The notification and declaration under Sections 4 and 6 of
the Land Acquisition Act for acquisition of the land i.e. the site below the
bungalow are meaningless. It would have been different if the State would H
80 SUPREME COURT REPORTS [2003] SUPP. 5 S.C.R.

A have proposed the acquisition of leasehold rights and/or the superstructure
standing thereon, as the case may be. But that has not been done. The
renewal of lease cannot be denied in the garb of so called acquisition
notification and declaration which have to be just ignored . (89-B-D)

Sharda Devi v. State of Bihar, (2003) 3 SCC 128, referred to.
B
2.2. The High Court held that the plea taken by the appellant-State
that the respondent committed breach of the terms of the lease thus not
entitled to renewal is not substantiated. Further, the exercise for option
for renewal cannot be stalled on the ground that the lessor proposes to
C exercise right of re-entry on account of alleged breach when no steps were
taken for exercising the right of re-<'ntry till the option for renewal was
exercised by the lessee. If the lessee ~s in breach and the lease entitles the
lessor to re-enter, that right is available to be exercised without regard to
the renewal of the lease. [89-D-E)

D CIVIL APPELLATE JURISDICTION : Civil Appeal No . 4698-4700 of
1994.

From the Judgment and Order dated 30.7.91 of the Allahabad High
Court in W.P. Nos.1551/90 and 3465 of 1989.

E Subodh Markandeya and Ashok K. Srivastava for the Appellants.

The Judgment of the Court was delivered by

R.C. LAHOTI, J. The property in question is plot no.81/1-M area 5
acres (out of 98 bighas) in village Nasibpur, Bhaktiara, Chhail, District
p Allahabad, U.P. over which stands a bungalow bearing no. 241 Mor Road,
Alllahabad. This property shall hereinafter be referred to as 'the suit property'.
The ownership of the land vests in the State. The super-structure which is a
bungalow seems to have been brought up by the lessee or his transferee, as
stated hereinafter, and which is not very clearly borne out from the pleadings,
also not very relevant for the issue at hand.
G
The land consisting in the suit property was given on fifty years lease
to one J.W.Walsh. The lease contained a clause for renewal which, as far as
ascertainable from the material available on record, and as found by the High
Court, conferred an option on the lessee to seek renewal of lease for another
H term of 50 years and on such option being exercised before the expiry of ·
STATE OF U.P. v. LALJI TANDON (DEAD) THROUGH LRS. [LAHOTI, J.] 81

tenn of 50 years of the existing lease, the lessor shall "act upon forthwith and A
execute and deliver to the lessee upon his duly executing a counter part or
renew the lease for the said premises for a further tenn of 50 years and with
and subject to the same covenants conditions and provisions as are herein
contained."

The original deed of lease though very material for ascertaining the B
covenants thereof, including the one for renewal, has not been placed on
record by either party. The High Court has in its impugned judgment observed
that the suit property has changed hands but the document is certainly available
with the State-appellant, and in the facts and circumstances of the case, the
State ought to have produced the lease or its copy to assist the Court in C
arriving at a just decision, but the same was not done in spite of several
opportunities having been allowed for the purpose and though the State had
filed a counter-affidavit followed by two supplementary-affidavits. The High
Court has chosen to draw an adverse inference against the State without
expressly stating so, as its observation indicates, (to quote) "Initial lease deed
has not been placed on record by either party. It would be fair to assume that D
the State should be in possession of the same. The condition whether renewal
was pennissible only once must be in the initial lease deed but unfortunately
it has not been placed before us. In our opinion it was for the State to have
filed a copy thereof if it wanted to rely upon such a tenn. That having not
been done despite several opportunities availed by it when filing supplementary E
counter affidavit we can safely conclude that really no such tenn was contained
in the initial lease deed. We have no hesitation, therefore, in rejecting the
contention of the State that the lease was renewable only once". This is the
most crucial part of the controversy and we will revert back to the same after
completing the narration of facts.
F
Walsh alienated his interest in the suit property to Lalji Tandon, the
respondent-plaintiff, who has died during the pendency of the proceedings
and whose LRs have been brought on record; however, for convenience, we
will refer to the respondent Lalji Tandon, succeeded by his LRs., as 'the
respondent'.
G
The respondent, having stepped into shoes of Walsh, the original lessee,
sought for renewal of the lease consistently with covenant for renewal as
contained in the original lease. The State Government agreed for renewal and
the renewed lease deed came to be executed on February 20, 1945. It seems
that the State Government was agreeable to renew the lease for a tenn of 50 H
82 SUPREME COURT REPORTS (2003] SUPP. 5 S.C.R.

A years but by February 20, 1945, the day on which the renewed lease came
to be executed, a period of 42 years, 2 months and 20 days had remained
available out of the 50 years of the second tenn and therefore the tenn of the
renewed lease as recited therein is "42 years, 2 months, 20 days''. This lease
has been placed on record. Covenant - 2 thereof is very crucial and the same
B is extracted and reproduced hereunder:

"It is hereby mutually convenanted and agreed by and between the
lessor and the lessee that the obligations hereunder shall continue
throughout the tenn hereby created and shall be binding on their
respective successors-in-interest in the demised premises that they
will perform and observe the several convenants provisos and
c stipulations in the afores2id lease expressed as fully as if the same
convenants provisos and stipulations had been herein repeated in full
with such modifications only as are necessary to make them applicable
to this demise and as if the name of the parties hereto had been
substituted for those in the aforesaid lease provided always that the
D building referred to in the aforesaid lease having been erected the
lessee shall not be under any obligation to erect another."

(underlining by us)

Proceeding on an assumption (the correctness whereof is the core of
E the controversy and shall be dealt with shortly hereinafter) that the renewed
lease incorporated all the covenants of the original lease including the covenant
for renewal, the respondent sought for renewal of the lease for yet another
term of 50 years. The Collector of the District recommended renewal. The
Board of Revenue also directed the renewal to be expedited. The Government
had also issued instructions to all the Commissioners and District Magistrates
F generally directing them to renew such like leases. However, the State
Government set over the renewal which led to the respondent filing a writ
petition in the High Court of Allahabad which was disposed of at the admission
stage itself by order dated 19.4.1989. The Division Bench passed the order
in the following tenns :
G "The grievance of the petitioner is that in spite of the judgment
of this court in the case of Purshottam Dass Tandon and Ors. v. State
of Uttar .Pradesh and Ors., [1987] Allahabad Law Report, page 92
and confinned by the Supreme Court, the respondents are not renewing
the lease of the petitioner. The prayer is that a writ in the nature of
H mandamu~ be issued to the respondents to do so. The respondents
STATE OF U.P. v. LALJI TANDON (DEAD) THROUGH LRS. (LAHOTI, J.) 83
_,..
shall endeavour to renew the lease of the petitioner in accordance A
with the aforesaid judgment as soon as possible."

With these observations, this petition is dismissed summarily."

The observation made by the High Court holding out a hope from the
State that it shall renew the lease at the earliest did not bring any results and B
consequently the respondent had to file another writ petition leading to the
passing of the impugned order dated 30.7.1991. The short grievance raised
by the respondent as a writ-petitioner before the High Court was that he was
entitled for a renewal of lease for yet another term of 50 years, which the
State having not done, the writ-petitioner was entitled to a mandamus directing
the respondents (before the High Court) to renew the lease. However, the c
respondent was active in politics which was not to the liking of the then
ruling party and therefore the State was creating obstacles in the renewal of
the lease, pleaded the respondent as writ-petitioner in the High Court.

In the counter-affidavit filed on behalf of the State Government it was
pleaded that the original lease was for a period of 50 years, renewable only D
once for a further term of 50 years, which right of renewal was exhausted on
having been exercised once culminating into the execution of lease deed
dated February 20, 1945. On the expiry of the term limited by the latter lease
deed the respondent did not have any further right of renewal. o-
E
Another supplementary counter-affidavit sworn in by Shri Bira Ram,
Naib Tahsildar was filed wherein an additional plea was raised that on
28.3.1987 the State of U.P. had issued a notification under Section 4 of the
Land Acquisition Act, 1894 followed by declaration under Section 6 dated
31.12.1987 whereby the land was acquired by the State.and therefore the
renewal of lease was not legally possible. F
A third counter-affidavit sworn in by one Lateefullah was filed on
April I, 199 I raising yet another plea that the respondent was negotiating the
sale of the leased land without prior sanction of the State Government which
was in violation of the terms of the lease deed and so also the respondent was
not entitled for any further renewal. G

In the decision dated I9.4.1989 referred to hereinabove, the High
Court had made a reference to the case of Purshottam Das Tandon and Ors.
and expected the State of U.P. to endeavour to renew the lease of the
respondent herein in accordance with the aforesaid judgment as soon as
H
84 SUPREME COURT REPORTS [2003) SUPP. 5 S.C.R.

A possible. It seems that Purshottam Das Tandon was holding lease of the land
owned by the State on similar terms as was held by the respondent herein,
excepting for the difference that the land held by Purshottam Das Tandon
was nazul land while the land held by the respondent herein is government
estate. Though this difference was pointed out at the time of hearing, however
B the learned counsel for the appellant State of U.P. was unable to point out
what difference it makes so far as the case for renewal is concerned if the
covenants in the lease deeds held by Purshottam Das Tandon and the
respondent herein respectively were identical. The decision of the Allahabad
High Court in the case of Purshottam Das Tandon and Ors. is reported as
AIR (1987) Allahabad 56. The Division Bench presided over by R.M. Sahai,
C J. (as His Lordship then was) and who spoke for the Division Bench deals
with the history of such like leases, the several government orders and
instructions relating thereto and takes into consideration almost all the legal
aspects relevant thereto excepting a few with which we will be elaborately
dealing hereafter. The High Court held that the State Government was bound
to renew the lease held by Purshottam Das Tandon in accordance with the
D covenant for renewal. The State of U.P. and Ors. preferred special leave
petition against the judgment of the Allahabad High Court which was dismissed
on January 14, 1987 refusing to interfere with the decision of the High Court.
The decision of this Court is reported as State of U.P. and Ors. v. Purshottam
Das Tandon and Ors., [1989) Supp. 2 SCC 412.
E
The first submission of Shri Subodh Markandeya, the learned senior
counsel for the State of U.P., has been that the respondent was entitled only
for one renewal for a term of 50 years consistently with the covenant for
renewal contained in the original lease executed in favour of John William
Walsh dated May 10, 1887 which right to renewal stood exhausted with the
F lease deed dated February 20, 1945 which came to an end on the expiry of
42 years 2 months and 20 days from the date of the lease, i.e. February 20,
1945. It was submitted that the first renewal evidenced by the lease deed
dated February 20, 1945 shall be deemed to have renewed all other covenants
incorporating the rights and obligations between the lessor and the lessee
G excepting the clause for renewal; else it would result in creating a lease in
perpetuity because every renewed lease shall have to incorporate the clause
for renewal for 50 years as contained in the original lease deed which wou Id
mean endless renewa\s and hence a lease in perpetuity. We find it difficult
to agree with Shri Markandeya in the facts and circumstances of this case.

H In India, a lease may be in perpetuity. Neither the Transfer of Property
STATE OF U.P. v. LALJI TANDON (DEAD) THROUGH LRS. [LAHOTI, J.] 85

Act nor the general law abhors a lease in perpetuity. (Mui/a on The Transfer A
of Property Act, Ninth Edition, I999, p. IOI I). Where a covenant for renewal
exists, its exercise is, of course, a unilateral act of the lessee, and the consent
ofthe lessor is unnecessary. (Baker v. Merckel (1960) I All ER 668, also
Mulla, ibid, p.1204). Where the principal lease executed between the parties
containing a covenant for renewal, is renewed in accordance with the said B
covenant, whether the renewed lease shall also contain similar clause for
renewal depends on the facts and circumstances of each case regard being
had to the intention of the parties as displayed in the original covenant for
renewal and the surrounding circumstances. There is a difference between an
extension of lease in accordance with the covenant in that regard contained
in the principal lease and renewal of lease, again in accordance with the C
covenant for renewal contained in the original lease. In the case of extension
it is not necessary to have a fresh deed of lease executed; as the extension
of lease for the term agreed upon shall be a necessary consequence of the
clause for extension. However, option for renewal consistently with the
covenant for renewal has to be exercised consistently with the terms thereof
and, if exercised, a fresh deed of lease shall have to be executed between the D
parties. Failing the execution of a fresh deed of lease, another lease for a
fixed term shall not come into existence though the principal lease in spite
of the expiry of the term thereof may continue by holding over for year by
year or month by month, as the case may be.

The issue - whether a right to a new lease consequent upon the option
for renewal having been successfully exercised should again contain the
covenant for renewal, is not free from difficulty and has been the subject
matter of much debate both in England and in India. It would all depend on
the wordings of the covenant for renewal contained in the principal lease, the
intention of the parties as reflected therein and as determinable in the light F
of the surrounding relevant circumstances.

A Division Bench decision of Andhra Pradesh High Court in Syed
Jaleel Zane v. P. Venkata Murlidhar and Ors., AIR (1981) AP 328, wherein
Jeevan Reddy, J., as His Lordship then was, spoke for the Division Bench
makes almost an exhaustive discussion of the relevant English and Indian G
Law available on the point and we express our respectful agreement with the
exposition of law as made therein. We note with approval the following
proposition of law laid down therein:-

(i) In India, the law does not prohibit a perpetual iease; clear and H
86 SUPREME COURT REPORTS [2003] SUPP. 5 S.C.R.

A unambiguous language would be required to infer such a lease.
If the language is ambiguous the Court would opt for an
interpretation negating the plea of the perpetual lease;

(ii) To find an answer to the question whether a covenant for renewal
contained in the lease deed construed properly and in its real
B context, entitles the tenant to continue as long as he chooses by
exercising the option of renewal at the end of each successive:
period of 5 years subject to the same tenns and conditions depends
on the deed of lease being read as a whole and an effort made
to ascertain the intention of the parties while entering into the
contract. No single clause or tenn should be read in isolation so
c as to defeat other clauses. The interpretation must be reasonable,
hannonious and be deduced from tlie language of the document;

(iii) The Court always leans against a perpetual renewal and hence
where there is a clause for renewal subject to the same tenns and
conditions, it would be construed as giving a right to renewal for
D the same period as the period of the original lease, but not a right
to second or third renewal and so on unless, of course, the
language is clear and unambiguous.

Another illuminating decision on the point is by Sir Ashutosh Mookerjee,
J., speaking for the Division Bench of Calcutta High Court in Secretary of
E State for India in Council v. A.H. Forbes, (1912) 17 IC 180. The Division
Bench on a review of several English decisions held:-

"(I) A lease, which creates a tenancy for a tenn of years, may yet
confer on the lessee an option of renewal.

F (2) If the lease does not state by whom the option is exercisable, it
is exercisable (as between the lessor and lessee) by the lessee only,
that is to say, a covenant for renewal, if infonnally expressed, is
enforced only in favour of the lessee.

(3) The option is exercisable not merely by the lessee personally but
G also by his representative-in-interest.

(4) If the option does not state the terms of renewal, the new lease
will be for the same period and on the same terms as the original
lease, in respect of all the essential conditions thereof, except as to
the covenant for renewal itself.
H
STATE OF U.P. v. LAU! TANDON (DEAD) THROUGH LRS. [LAHOTI, J.) 87

(5) There is no sort of legal presumption against a right of perpetual A
renewal. The burden of strict proof is imposed upon a person claiming
such a right. It should not be inferred from any equivocal expressions
which may fairly be capable of being otherwise interpreted. The
intention in that behalf should be clearly shown; otherwise, the
· agreement is satisfied and exhausted by a single renewal.
B
(6) A covenant for renewal runs with the land.

(7) The position of a lessee, who has been always ready and willing
to accept a renewal on proper tenns, is the same in equity as if a
proper lease had been granted. Where the covenant for renewal was
still specifically enforceable at the commencement of a suit for C
· ejectment against the lessee, the position of the lessee in equity is the
same as if it had been specifically enforced."

Green v. Palmer, [1944] I All ER 670, bears a close resemblance with
the tacts of the present case. There the parties had entered into a lease
agreement for six months. One of the covenants in the lease read so--"The D
tenant is hereby granted the option of continuing the tenancy for a further
period of six months on the same tenns and conditions including this clause,
provided the tenant gives to the landlord in writing four weeks' notice of his
intention to exercise his option." The plea raised on behalf of the tenant was
that the clause gave him a perpetual right of renewal. Uthwatt, J. of Chancery E
Division held -
)
" ......... the first thing one observes is that, in tenns, there is granted
to the tenant a single option exercisable only once upon the named
event, and the subject-matter of that option is an option "of continuing
the tenancy for a .further period of six months on the same tenns and F
conditions including this clause." To my mindJthat that means is
this : the tenant is to be allowed once, and once only, the opportunity
of continuing the tenancy--<:ontinuing it for a further six months.
Then we come to the critical words "on the same tenns and condition
including this clause." As I read it, that means there is included in the
new tenancy agreement a right in the tenant, if he thinks fit, to go on G
for one further six months, and when you have got to that stage you
have finished with the whole matter. In other words, it comes to this:
"Here is your present lease. You may continue that, but I tell you, if
you continue it, you continue it on the same tenns as you were
granted the original lease. You may continue it for a further 6 months H
88 SUPREME COURT REPORTS [2003) SUPP. 5 S.C.R.

A with the right to go on for another 6 months."

Upon that footing; ifflhe events which have happened, all the landlord
was bound to do under this arrangement was to permit the tenant to
occupy for a period not exceeding 18 months in the whole from the
time when the original lease was granted."
.B
We find ourselves in full agreement with the view of the law taken in
the decisions cited hereinabove. It is pertinent to note that the respondent is
not claiming a lease in perpetuity or right to successive renewals under the
covenant for renewal contained in the 1887 lease. The term of 50 years under
the 1887 lease came to an end in the year 193 7 and the option for renewal
C was exercised by the respondent as assignee of the original lessee which
exercise was honoured by the lessor State executing a fresh deed of lease
belatedly on February 20, 1945. This lease deed does not set out any fresh
covenants, mutually agreed upon between the parties for the purpose of
renewal. Rather it incorporates, without any reservation, all the covenants,
D provisos and stipulations as contained in the principal lease as if they had
been herein repeated in full. Not only was a fresh deed of lease executed but
the conduct of the parties also shows that at the end of the term appointed
by the 1945 lease, i.·e. in or around the year 1987, the lessor did not exercise
its right of re-entry. On the other hand, the respondent exercised his option
for renewal. The offkials of the appellant State, i.e. the Collector and the
E Board of Revenue, all recommended renewal and advised the State Government
to expedite the renewal. The State Government was generally renewing such
like leases by issuing general orders/instructions to it~ officers. At no point
of time prior to the filing of the i.;ounter-affidavit, on the present litigation
having been initiated, the State or any of its officers took a stand that the
F right of renewal, as contained in the principal deed of lease, having been
exhausted by exercise of one option for renewal, was not available to be
exercised again.

Now that the covenant for renewal has been referentially incorporated
without any reservation in the lease deed of 1945 the exercise of option for
G renewal cannot be denied to the respondent. However, in the lease deed to
be executed for a period of 50 years commencing May 20, 1987, the covenant
for renewal need not be incorporated and therefore the term of the lease
would come to an end on expiry of 50 years calculated from May 20, 1987.
This view also accords with the view of the law taken in Green v. Palmer
(supra).
H
STATE OF U.P. v. LALJI TANDON (DEAD) THROUGH LRS. [LAHOTI, J.] 89

The other two pleas raised on behalf of the appellant State merit a short A
and summary burial. The appellant's plea that the land having been acquired
there could be no renewal of lease has been termed by the High Court as
'ridiculous' and we find no reason to take a different view. Suffice it to refer
to a recent decision of this Court in Sharda Devi v. State of Bihar, (2003] 3
sec 128 wherein it has been held that the Land Acquisition Act, 1894 B
cannot be invoked by the Government to acquire its own property. It would
be an absurdity to comprehend the provisions of the Land Acquisition Act
being applicable to such land wherein the ownership or the entirety of rights
already vests in the State. The notification and declaration under Sections 4
and 6 of the Land Acquisition Act for acquisition of the land i.e. the site
below the bungalow are meaningless. It would have been different if the C
State would have proposed the acquisition of leasehold rights and/or the
superstructure standing thereon, as the case may be. But that has not been
done. The renewal of lease cannot be denied in the garb of so called acquisition
notification and declaration which have to be just ignored.

Lastly, it was submitted that the respondent is in breach of the terms D
of the lease and hence not entitled to renewal. Firstly, the High Court has
held the plea taken by the appellant State not substantiated. Secondly, exercise
for option for renewal cannot be stalled on the ground that the lessor proposes
to exercise right of re-entry on account of alleged breach when no steps were
taken for exercising the right of re-entry till the option for renewal was E
exercised by the lessee. If the lessee is in breach and the lease entitles the
lessor to re-enter, that right is available to be exercised without regard to the
renewal of the lease.

For the foregoing reasons the appeals are held devoid of any merit and
liable to be dismissed. May are dismissed accordingly. As the respondent has F
chosen not to appear we make no order as to the costs.

NJ. Appeals dismissed.