Case Note & Summary
The case involves a landlord-tenant dispute where the respondent, Shri Ram Lal, owner of a house in Dehradun, let out a portion to the appellant, Dr. H.K. Sharma, under a tenancy agreement dated 22.07.1985 at a monthly rent of Rs. 750. On 28.04.2008, the respondent filed an application under Section 21(1)(a) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 seeking eviction on the ground of bona fide need for his own residence and that of his family members after his retirement. The appellant contested, claiming that an agreement to sell the suit house was executed on 13.05.1993, and that pursuant to part payment, the relationship of landlord and tenant had ceased, converting into that of buyer and seller. The Prescribed Authority dismissed the eviction application, holding that the agreement to sell terminated the tenancy. The Appellate Court affirmed. The High Court, in writ jurisdiction, reversed these decisions, holding that a mere agreement to sell does not terminate the landlord-tenant relationship unless expressly stipulated, and that the unregistered agreement could not support a plea of part performance under Section 53A of the Transfer of Property Act, 1882. The High Court also found the respondent's bona fide need established. The Supreme Court dismissed the tenant's appeals, affirming the High Court's reasoning. The Court analyzed Section 111 of the Transfer of Property Act, which enumerates modes of lease determination, and held that an agreement to sell does not ipso facto determine the lease; there must be an express or implied surrender as per clauses (e) and (f). The Court distinguished the case of R. Kanthimathi & Anr. v. Beatrice Xavier (Mrs.), noting that in that case, the agreement itself stipulated that the tenant would not be liable to pay rent, indicating an intention to surrender. In the present case, no such stipulation existed, and the appellant continued to pay rent. The Court also noted that the appellant's plea of part performance was unavailable due to the unregistered agreement. Consequently, the eviction was upheld, and the appeals were dismissed with no order as to costs.
Headnote
A) Property Law - Lease Determination - Section 111, Transfer of Property Act, 1882 - Mere agreement to sell tenanted property does not ipso facto terminate the lease unless there is express or implied surrender as per clauses (e) and (f) of Section 111 - The court held that the intention of the parties must be ascertained; in absence of stipulation in the agreement or conduct showing surrender, the landlord-tenant relationship continues (Paras 24-31). B) Property Law - Part Performance - Section 53A, Transfer of Property Act, 1882 - An unregistered agreement to sell cannot be used to claim part performance against the lessor - The High Court correctly held that the tenant cannot raise the plea of part performance based on an unregistered agreement (Para 14). C) Rent Control - Bona Fide Need - Section 21(1)(a), U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 - Landlord's bona fide need for own residence and family members is a valid ground for eviction - The court upheld the High Court's finding that the respondent, being an old man with no other house, had made out a case of bona fide need (Paras 14, 32).
Issue of Consideration
Whether execution of an agreement to sell the tenanted premises between lessor and lessee during subsistence of lease results in automatic determination of the lease and severs the relationship of lessor and lessee.
Final Decision
The Supreme Court dismissed the appeals, upholding the High Court's order allowing eviction. The Court held that the agreement to sell did not ipso facto determine the lease; there was no express or implied surrender. The appellant's plea of part performance under Section 53A of TP Act was not available due to unregistered agreement. The respondent's bona fide need was established. No order as to costs.
Law Points
- Mere agreement to sell does not ipso facto terminate lease
- Surrender of lease requires mutual intention
- Section 53A of Transfer of Property Act not available for unregistered agreement
- Bona fide need of landlord for own residence
