2008 (5) TMI 708 - SC - Indian Laws

Lease Agreement Inadmissible; No Breach of Property Act; Tenant Cleared of Rent Default & Property Damage Claims.

M/s. K.B. Saha & Sons Pvt. Ltd. Versus M/s. Development Consultant Ltd.

The SC dismissed the appeals, ruling that the unregistered lease agreement was inadmissible to prove tenancy terms. The respondent did not violate Section ... Decree of eviction - `Change of user' in the suit premises - Clause 9 of the unregistered Tenancy Agreement between the parties - violation of provisions of Section 108(o) of the Transfer of Property Act - whether the expression `change of user' would cover a situation wherein the property is let out for a particular named officer and for none else and despite this condition, the same is given to some one else, or would it cover and be limited to the cases where property is leased out for a residential or non- residential purpose or for a particular business and despite such express conditions, the property is used for the purpose other than the specified - Section 49 of the Registration Act, an unregistered document can also be admitted into evidence for a collateral fact/collateral purpose or not?. HELD THAT:- We have noted that under the proviso to Section 49 of the Registration Act, an unregistered document can also be admitted into evidence for a collateral fact/collateral purpose. In the case of Bajaj Auto Limited vs. Behari Lal Kohli [1989 (8) TMI 344 - SUPREME COURT], this Court observed that if a document is inadmissible for non-registration, all its terms are inadmissible including the one dealing with landlord's permission to his tenant to sub-let. It was also held in that decision that if a decree purporting to create a lease is inadmissible in evidence for want of registration, none of the terms of the lease can be admitted in evidence and that to use a document for the purpose of proving an important clause in the lease is not using it as a collateral purpose. In our view, the clause 9 in the lease agreement in question cannot be called a collateral purpose. As noted earlier, it is the case of the appellant that the suit premises was let out only for the particular named officer of the respondent and accordingly, after the same was vacated by the said officer, the respondent was not entitled to allot it to any other employee and was therefore, liable to be evicted which, in our view, was an important term forming part of the lease agreement. Therefore, Clause 9 of the Lease Agreement in this case, cannot be looked into even for collateral purposes to come to a conclusion that the respondent was liable to be evicted because of violation of Clause 9 of the Lease Agreement. That being the position, we are unable to hold that Clause 9 of the Lease Agreement, which is admittedly unregistered, can be looked into for the purpose of evicting the respondent from the suit premises only because the respondent was not entitled to induct any other person other than the named officer in the same. Violation of provisions of Section 108(o) - In our view, the High Court was justified in coming to a conclusion that since this was not a case of `Change of User' within the meaning of Section 108(o) of the Transfer of Property Act, it could not be held that the appellant had violated the provisions of Section 108(o) of the Transfer of Property Act. Section 108(o) requires the lessee to use the property as a man of ordinary prudence would use his property and not to use it for a purpose different to that for which it was leased. We are of the view that although the premises was leased out exclusively for the named officer of the respondent, the fact that it was subsequently used for the residence of some other officer of the respondent would not constitute `change of user' so as to be hit by Section 108(o) of the Transfer of Property Act. We are unable to agree with this contention of Mr. Mukherjee for the simple reason that for a decree to be passed under the Act, the landlord has to plead and prove one of the grounds mentioned in Section 13 of the Act. Even if we accept that the appellant had made out a case under Section 13(1b) of the Act to the extent that the respondent was liable to be evicted u/s 108(o) of the Transfer of Property Act, in view of our findings made on that aspect, the appellant is not entitled to a decree of eviction under the Act. We are, therefore, of the view that Clause 9 of the Agreement, which requires the respondent to use the suit premises only for its particular named officer, cannot be looked into even for collateral purposes and that the decision of this court in Smt. Juthika Mullick's case[1995 (10) TMI 249 - SUPREME COURT] would not be of any help to the appellant because in that case, the lease deed was registered. Secondly, we are of the view that although the suit premises was leased out exclusively for the named officer of the respondent, the fact that the respondent sought to use it for some other officer would not constitute 'Change of User' within the meaning of Section 108(o) of the Transfer of Property Act and, therefore, the respondent cannot be evicted for violation of the provisions of Section 108(o) of the Transfer of Property Act. W do not find any merit in this appeal and the appeal is therefore dismissed - Since the appeals have been dismissed, all the interlocutory applications, if any, now pending before this Court have become infructuous and accordingly, they are disposed of as infructuous. Issues Involved:1. Cause of action for the suit.2. Maintainability of the suit.3. Nature of the tenancy and its specific terms.4. Entitlement to the decree and relief sought.5. Validity and sufficiency of the notice of ejectment.6. Alleged default in payment of rent.7. Alleged damage to the suit premises.8. Violation of the terms of the lease agreement.9. Applicability of Section 108(o) of the Transfer of Property Act.10. Admissibility and effect of an unregistered lease agreement.Detailed Analysis:Issue 1: Cause of Action for the SuitThe trial court framed the issue to determine if the plaintiff had a valid cause of action. The court found that the appellant's case was based on the memorandum of lease agreement dated 30th March 1976, which outlined specific terms for the tenancy. The court concluded that the appellant did have a cause of action based on the alleged violation of these terms.Issue 2: Maintainability of the SuitThe trial court and the High Court both examined the maintainability of the suit. The courts found that the suits were maintainable as they were filed based on alleged violations of the lease agreement and the West Bengal Premises Tenancy Act, 1956.Issue 3: Nature of the Tenancy and Its Specific TermsThe courts analyzed the lease agreement, particularly Clause 9, which specified that the tenancy was for the residential use of a particular officer, Mr. Keshab Das, and his family. The trial court found that the tenancy was created in favor of the respondent company and not exclusively for Mr. Das. The High Court upheld this finding, noting that the tenancy continued even after Mr. Das vacated the premises.Issue 4: Entitlement to the Decree and Relief SoughtThe appellant sought a declaration and permanent injunction to prevent the respondent from allotting the premises to another employee. The trial court dismissed the suits, and the High Court affirmed this decision, concluding that the appellant was not entitled to the relief sought.Issue 5: Validity and Sufficiency of the Notice of EjectmentThe trial court examined whether the notice of ejectment served under Section 13(6) of the Act was valid and sufficient. The court found that the notice was legally sufficient but did not provide grounds for eviction under the Act. The High Court agreed with this finding.Issue 6: Alleged Default in Payment of RentThe trial court found that the respondent was not a defaulter in payment of rent as it had been depositing rent with the Rent Controller, Calcutta. This finding was upheld by the High Court.Issue 7: Alleged Damage to the Suit PremisesThe trial court found no evidence to support the appellant's claim that the respondent had caused damage to the suit premises. The High Court also found no merit in this allegation.Issue 8: Violation of the Terms of the Lease AgreementThe courts examined whether the respondent violated the lease agreement by not vacating the premises after Mr. Das had vacated. The trial court found that the lease agreement, being unregistered, was not admissible in evidence to prove this term. The High Court upheld this finding, noting that the lease agreement could not be used to extinguish the tenant's rights under the Act.Issue 9: Applicability of Section 108(o) of the Transfer of Property ActThe appellant argued that the respondent violated Section 108(o) by using the premises for a purpose other than that for which it was leased. The High Court found that the purpose of the tenancy was for residential use, and since the premises continued to be used for residential purposes, there was no violation of Section 108(o). The Supreme Court agreed, noting that leasing the property to another officer did not constitute a change of user.Issue 10: Admissibility and Effect of an Unregistered Lease AgreementThe courts examined the admissibility of the unregistered lease agreement under Section 49 of the Registration Act. The trial court found that the unregistered lease agreement could not be used to prove the terms of the tenancy. The High Court upheld this finding, noting that the lease agreement could not be used to establish that the premises were let out exclusively for Mr. Das. The Supreme Court agreed, stating that the lease agreement could not be looked into for collateral purposes to evict the respondent.ConclusionThe Supreme Court dismissed the appeals, holding that the unregistered lease agreement could not be used to prove the terms of the tenancy and that the respondent did not violate Section 108(o) of the Transfer of Property Act. The court also found no merit in the appellant's claims of default in payment of rent, damage to the premises, or the validity of the notice of ejectment. All interlocutory applications were disposed of as infructuous, and no costs were awarded.