Case Note & Summary
The appellant trust, landlord of shop premises No. 1930/1 situated in Mohalla Ghatia Azam Khan, Agra, leased the premises to the original respondent in 1954 at a monthly rent of Rs. 75. The terms of tenancy were reduced to writing in an unregistered document marked Ex.12. The respondent did not pay rent since 1 January 1960. The appellant served a notice to quit dated 27 March 1961 and filed a suit for ejectment and recovery of arrears of rent. The trial court decreed the suit, but the appellate court dismissed it on the grounds that the appellant trust was not registered and all trustees had not joined in the suit. Thereafter, the trust got itself registered on 8 May 1963 and served a fresh notice to quit dated 30 May 1963, requiring the respondent to vacate within 30 days. The respondent failed to comply, and the appellant filed a second suit for ejectment and recovery of arrears of rent before the Munsif's Court at Agra. The trial court decreed the suit. The respondent appealed to the Additional Civil Judge, Agra, contending that the notice dated 30 May 1963 was invalid because the lease was a manufacturing lease and six months' notice under Section 106 of the Transfer of Property Act was necessary. The appellate court rejected this contention, holding that the agreement Ex.12 contained an express term requiring only fifteen days' notice. In second appeal before the Allahabad High Court, a learned Single Judge held that the terms of Ex.12 could not be relied upon due to Section 107 of the Transfer of Property Act, and since the lease was for a manufacturing purpose, six months' notice was required under the deeming provision of Section 106. Consequently, the High Court allowed the appeal, dismissed the suit for ejectment, but decreed the claim for arrears of rent. The appellant trust appealed to the Supreme Court. The Supreme Court noted that all courts below had held that the lease was valid, was from month to month, and was not for a term exceeding one year. The High Court also recorded that the respondent did not contend that the lease was from year to year; the contention was that it was for a term exceeding one year and thus compulsorily registrable under the first part of Section 107. The High Court negatived this contention, holding the lease was not for a term exceeding one year. However, the High Court erroneously held that because the lease was for a manufacturing purpose, six months' notice was required. The Supreme Court held that Section 106's deeming provision for manufacturing leases applies only when the lease is, or is deemed to be, from year to year. Since the lease was not from year to year and not for a term exceeding one year, the second half of Section 106 applied, which requires fifteen days' notice of termination. The 30-day notice given by the appellant was therefore valid. The Supreme Court allowed the appeal with costs, set aside the High Court's order, and restored the order of the first appellate court, thereby decreeing the suit for ejectment.
Headnote
A) Transfer of Property - Lease - Registration - Transfer of Property Act, 1882, Sections 107 - A lease of immovable property from year to year or for any term exceeding one year can be made only by registered instrument; all other leases may be made by registered instrument or oral agreement accompanied by delivery of possession - The High Court held that the lease was not for a term exceeding one year and was not from year to year, so it was not compulsorily registrable under the first part of Section 107; the unregistered lease deed Ex.12 could not be looked at for its terms, but the factum of lease was undisputed - Held that the lease was valid and not hit by Section 107 (Paras 1-3). B) Transfer of Property - Lease - Notice to Quit - Transfer of Property Act, 1882, Sections 106 - In the absence of a contract to the contrary, a lease of immovable property for manufacturing purposes shall be deemed to be a lease from year to year terminable by six months' notice; a lease from month to month or a lease other than a lease from year to year is terminable by fifteen days' notice - The High Court erroneously held that six months' notice was required because the lease was for a manufacturing purpose, but the Supreme Court found that the deeming provision of the first part of Section 106 applied only when the lease was from year to year or for a term exceeding one year; since all courts found the lease was from month to month and not exceeding one year, the second half of Section 106 applied, requiring fifteen days' notice - Held that the thirty-day notice given was valid; appeal allowed with costs and High Court order set aside, first appellate court order restored (Paras 1-3). C) Transfer of Property - Lease - Termination - Contractual Notice Period - Transfer of Property Act, 1882, Sections 106 - The second half of Section 106 permits a contract to the contrary for the period of notice to quit - The original agreement Ex.12 provided for fifteen days' notice but was unregistered and could not be relied upon; however, the statutory requirement of fifteen days under the second half of Section 106 applied because the lease was not from year to year, so the notice was valid even without relying on the contract term - Held that termination notice of thirty days was valid and suit for ejectment should succeed (Paras 1-3).
Issue of Consideration
Whether a manufacturing lease that is not from year to year and not for a term exceeding one year requires six months' notice under Section 106 of the Transfer of Property Act, 1882, or fifteen days' notice; whether an unregistered lease deed can be considered for its terms under Section 107 of the Transfer of Property Act, 1882
Final Decision
The Supreme Court allowed the appeal with costs, set aside the order of the Allahabad High Court, and restored the order of the first appellate court, thereby decreeing the suit for ejectment. The Court held that the 30-day notice to quit was valid because a manufacturing lease not from year to year falls under the second half of Section 106 of the Transfer of Property Act, requiring only fifteen days' notice.
Law Points
- A manufacturing lease that is not from year to year or for a term exceeding one year falls under the second half of Section 106 of the Transfer of Property Act
- 1882
- requiring fifteen days' notice of termination
- not six months' notice
- the deeming provision of the first part of Section 106 applies only when the lease is
- or is deemed to be
- from year to year
- an unregistered lease deed for a term not exceeding one year is not compulsorily registrable under Section 107
- but its terms cannot be looked at while the factum of lease can be proved by other evidence
