TaxTMI 
TaxTMI 
2013 (4) TMI 281
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....r of New Commercial Mills Co. Ltd. The said transfer/assignment of the leasehold rights was accepted by the predecessors of the appellants. In other words, New Commercial Mills Co. Ltd. became the perpetual lessee. Subsequently, there were transactions with New Commercial Mills Co. Ltd. transferring the land to Bharat Vijay Mills Ltd., who in turn vide registered sale deed sold or transferred the lease hold rights to National Textile Corporation and ultimately to Continental Textile Mills Ltd., the company under liquidation. The transfer in favour of Continental Textile Mills Ltd. was made in the year 1991. The said transfer/assignments were accepted by the predecessors of the appellants. 3. During the course of liquidation proceedings, the official liquidator attempted to sell/dispose of the lease hold rights in the said land. Auction was held wherein M/s Suchit Pavitra Industrial Cooperative Society gave the highest bid, but their bid was rejected because auction money was not deposited within time. 4. The appellants herein who claim right, being inheritors of the original lessors, filed company application C.A. No.219/2007, inter alia, alleging that the company in liquidation ....
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....gn or transfer his leasehold rights to a third party. Assuming that the said Act and Part II thereof is applicable, it is clear to us that the contracts in question i.e. the Registered Permanent Lease Deeds dated 23.03.1918 and 03.11.1927 permit and allow the lessee to assign and transfer their rights. In fact, such transfers/assignments have taken place in the past, without any objection from the appellants or their predecessors. 8. The first lease deed dated 23rd March, 1918 records that the land in question was government land and was being given on perpetual or permanent lease on a fixed annual lease rent of Rs.341/-. We reproduce clauses 1 and 2 of the Lease Deed dated 23.03.1918. "1) The said land, as written hereinabove, has been taken on lease. If we make the use of the said land in the work of mill, etc. or construct building or use it as per our wish and will, or keep it vacant, then also, we and our heirs/successors, guardians shall fully pay the lease amount, as stated above, to you, your heirs/successors and guardians, or the one in whose possession this land is, and shall go on paying what is stated hereinabove, and shall not raise any objection or dispute therein.....
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....shoulders." 9. Similarly, the second lease deed dated 3rd November, 1927 records that the land in question was government land and the lessor had granted permanent lease on annual rent of Rs.138/-. The various covenants state that the lessee was entitled to transfer or alienate their lease hold rights in favour of third parties. Clauses 1,2,3 and 5 of the subsequent Lease Deed of 03.11.1927 records as under:- 1) The lease amount of the said field has been agreed to be Rs. 138=00 (Rupees One Hundred Thirty Eight Only) for every year. The said lease amount shall be paid by the Second Party or heirs - guardians of the Second Party to the heirs-guardians of the First Party every year by year in future. 2) The Second Party has taken the aforesaid land on lease from the First Party permanently. If the Second Party uses the said land for the use of mill, etc. or raise construction thereupon, or the Second Party uses it as per his wish and will or keep it surplus, then also, the Second Party shall go on fully paying the aforesaid lease amount to the First Party and his guardians, heirs/successors, and shall not raise any kind of objection or obstacle whatsoever and if the Second Party o....
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....ent, after filling up and surfacing the pits and knolls and making it in a cultivable condition by duty preparing the hedge, the Second Party or heirs/successors and guardians of the Second Party shall hand over the said land to the First Party or heirs/successors, guardians, attorneys of the First Party after duly receiving the receipt. And, if the Second Party does not hand over the land in that manner, then, all expenditure so incurred in that regard by the First Party, shall be recovered by the First Party from the Second Party with interest. Until the land is not handed over after duly cleaning the same by the Second Party or heirs/successors, guardians, administrators of the Second Party, the lease amount shall go on accumulating and all such shall be on the shoulders of the Second Party. xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx 5. If the Second Party sub-lease this land to any person or assign his right in any manner whatsoever, then too, as per this lease deed, all the liabilities of the Second Party shall remain absolute and if the person, in whose favour the Second Party assign his right, is agreeable by the First Party, then, in accordance with the wish of the First Party, t....
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....ontract shall be rendered ineffective. The use of the word "only" in the proviso is significant to emphasise that it relates to grounds alone which cannot be added over and above as provided. The whole contract or other conditions not related to eviction or grounds of eviction shall not be affected. So far as a fixed-term lease is concerned, it shall be affected only to the extent that even after expiry of period of the lease the possession cannot be obtained by the lessor unless one or more of the grounds contained in Section 21 of the Act are available for eviction of the tenant. There is nothing to indicate nor has it been held in any case that in view of Section 21 of the Karnataka Rent Act a contract of fixed-term tenancy stands obliterated in totality. As indicated in the earlier part of this judgment in the case of Dhanapal Chettiar[(1979) 4 SCC 214 : AIR 1979 SC 1745] it has been observed in para 5 that none of the State Rent Acts have abrogated or affected the provisions of Section 107 of the Transfer of Property Act which provides for lease of immovable property from year to year or for a term more than a year or reserving a yearly rent. As indicated earlier, the proviso ....