Enhanced rent after lease termination, no interest on arrears without basis, and equitable set-off allowed from the same transaction.

Where a lease is terminated by notice and the tenant remains in possession without repudiating a proposal to pay enhanced rent, continued occupation may amount to acceptance of the proposed terms, making the enhanced rent recoverable. Interest on arrears of rent was not available absent a contract, proved usage, or other basis showing such liability. A claim for timber value that was agreed to be deducted from rent arose from the same transaction as the rent claim and could therefore be allowed as an equitable set-off without a separate court-fee. On that basis, the decree was increased only for arrears of rent, while refusal of interest and allowance of set-off were maintained.

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Issues: (i) whether the defendant, after termination of the lease and continued occupation without protest, was liable to pay rent at the enhanced rate proposed in the landlord's notice; (ii) whether interest on arrears of rent was admissible; and (iii) whether the set-off claimed by the defendant could be allowed without payment of court-fee as an equitable set-off.

Issue (i): whether the defendant, after termination of the lease and continued occupation without protest, was liable to pay rent at the enhanced rate proposed in the landlord's notice.

Analysis: The lease stood determined on the date named in the notice. The defendant did not vacate on that date and did not repudiate the landlord's proposal to continue occupation at the enhanced rate. The case was not one of damages for breach of contract under Section 74 of the Contract Act, as no contractual breach by the defendant was established on that footing. Instead, the continued possession after notice justified the inference that the defendant accepted the proposal to hold over on the terms stated by the landlord. The Court also treated the position as distinguishable from a mere trespasser wholly outside the landlord-tenant relationship.

Conclusion: The enhanced rent was recoverable, and the plaintiff was entitled to an additional decree on that basis.

Issue (ii): whether interest on arrears of rent was admissible.

Analysis: No contract to pay interest was shown. No usage supporting allowance of interest on arrears of rent was proved, and the record indicated that interest had not previously been paid or demanded on such arrears. In the absence of contractual or customary basis, interest could not be granted as a matter of course.

Conclusion: Interest on arrears of rent was rightly refused.

Issue (iii): whether the set-off claimed by the defendant could be allowed without payment of court-fee as an equitable set-off.

Analysis: The claim for the value of timber supplied was supported by an agreement that its value would be deducted from rent. That agreement brought the claim within the same transaction as the suit for arrears of rent. A claim so arising could be treated as an equitable set-off, for which the absence of court-fee did not preclude relief.

Conclusion: The set-off was properly allowed as an equitable set-off.

Final Conclusion: The revision succeeded only to the extent of enhancement of the decree for arrears, while the refusal of interest and allowance of set-off were upheld.

Ratio Decidendi: Where a tenant continues in possession after termination of the lease in response to a notice proposing enhanced rent, and does not repudiate that proposal, the tenant may be taken to have accepted the terms for continued occupation; an agreed deduction arising from the same transaction may also be allowed as an equitable set-off without a separate court-fee.

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