Ganga Dutt Murarka vs Kartik Chandra Das And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 82 of 1957

Decision Date: 10 February, 1961

Coram: J.C. Shah, J.L. Kapur, M. Hidayatullah

In the matter titled Ganga Dutt Murarka versus Kartik Chandra Das and Others, the Supreme Court of India delivered its judgment on the tenth day of February, 1961. The opinion was authored by Justice J.C. Shah, who was joined by Justices J.L. Kapur and M. Hidayatullah. The citation for this decision appears in the 1961 All India Reporter at page 1067 and in the 1961 Supplementary Court Reports (Series III) at page 813, with subsequent references recorded in the Reporter of the Supreme Court in later years.

The petitioner, Ganga Dutt Murarka, occupied certain premises in the city of Calcutta as a contractual tenant. The respondents, identified as the owners of the premises, demanded that the petitioner surrender possession upon the expiry of the tenancy period. The petitioner's refusal to vacate gave rise to a dispute because the succession of rent‑control statutes enacted by the State provided the tenant with protection against removal. While the contractual tenancy had terminated, the petitioner continued to remit monthly payments equal to the original contractual rent, and subsequently to the amount later declared to be the statutory rent. The respondents accepted these payments. The central issue for determination was whether the respondents’ acceptance of the payments conferred upon the petitioner the status of a tenant holding over within the meaning of section 116 of the Transfer of Property Act, 1882.

The Court held that where a contractual tenancy, to which rent‑control legislation is applicable, ends either by the passage of time or by a notice to quit, the subsequent continuation of the tenant in possession does not create a new contractual tenancy simply because the landlord accepts rent after the termination. The Court relied on the precedent set in Kai Khushroo v. Bai Jerbai, reported in the 1949 Federated Chamber Reports at page 262, affirming that acceptance of amounts equivalent to rent after the expiry of the tenancy, or acceptance of amounts fixed as standard rent, does not amount to rent acceptance under section 116 of the Transfer of Property Act. Consequently, the petitioner’s occupation after the determination of the tenancy was not founded upon any express or implied contract but was sustained solely by the protection afforded by the successive rent‑control statutes. Accordingly, such occupation was not required to be terminated in accordance with the procedure prescribed by section 106 of the Transfer of Property Act.

The judgment arose from Civil Appeal No. 82 of 1957, which challenged the decree dated 4 April 1955 rendered by the Calcutta High Court in Appeal from Appellate Decree No. 1224 of 1953. The Court’s analysis addressed the factual background, the effect of statutory rent control provisions, and the statutory interpretation of sections 106 and 116 of the Transfer of Property Act in the context of a tenancy that had expired but continued under legal protection.

Counsel Pathak and D N Mukherjee appeared for the appellant, while the Additional Solicitor‑General of India, H N Sanyal, together with P K Chatterjee, represented the respondents. The judgment was pronounced on 10 February 1961 by Justice Shah. The dispute concerned premises situated at number 5, Raja Rajkissen Street, Calcutta. The respondents were the owners of the property and the appellant had occupied the premises as a contractual tenant from 15 June 1917 until 15 June 1947, the tenancy being renewed three times for successive periods of ten years each. During the first ten‑year term the appellant paid rent of Rs 84 15 0 per month; in the second term the rent increased to Rs 180 per month; and in the third term the rent was Rs 225 per month. The premises comprised buildings used for the manufacture of tin canisters together with a portion of open land.

On 30 September 1946 the Governor of Bengal issued the Calcutta Rent Ordinance, 1946 (Ordinance V), which introduced a scheme for controlling rents in the city. Section 12 of that Ordinance provided, to the extent that it was relevant, that notwithstanding any provisions of the Transfer of Property Act, the Presidency Small Cause Courts Act or the Indian Contract Act, no order or decree for recovery of possession of any premises could be made as long as the tenant continued to pay rent within the limits allowed by the Ordinance and complied with the conditions of the tenancy. The proviso to that provision, however, preserved the landlord’s right to obtain possession if the conditions specified therein were satisfied. The Ordinance was subsequently replaced by Act I of 1947, which retained substantially the same provisions. The West Bengal Act V of 1948 continued the effect of the Ordinance V of 1946 and Act I of 1947. On 1 December 1948 the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948 (Act XXXVIII) came into force, repealing the 1948 Act but maintaining the protective regime for tenants.

The temporary provisions were later superseded by the West Bengal Premises Rent Control Act, 1950. Section 12 of the 1950 Act again granted tenants protection against eviction, including those whose tenancies had already expired, by prohibiting courts from granting any decree or order for recovery of possession in favour of a landlord. The 1950 Act also specified that a landlord could obtain an ejectment decree where the premises were reasonably required by the landlord for either rebuilding or for his own occupation.

On 15 May 1957 the respondents issued a letter to the appellant demanding that he vacate the premises and hand over possession upon the expiry of the tenancy period. The appellant did not surrender possession; instead, he continued to pay the agreed rent, and the respondents accepted those payments. Subsequently, the appellant filed an application under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948, seeking relief in accordance with the statutory scheme.

In the earlier proceeding, the Controller, acting under the Temporary Provisions Act of 1948, fixed the standard rent for the premises at rupees four hundred fifty‑five per month. After the West Bengal Premises Rent Control Act of 1950 came into force, the appellant filed another application and the standard rent was subsequently reduced to rupees two hundred forty‑seven and eight tenths. On 10 October 1950, the respondents served a notice on the appellant requiring him to quit, vacate, and deliver possession of the premises, which the appellant was described as holding as a “monthly tenant.” The notice specified that the demand for possession would take effect on the expiry of the 31st day of the month of Chaitra, year 1357 of the Bengali calendar, which corresponded to 14 April 1951. The respondents asserted that the ground for eviction was that the landlords reasonably required the premises in order to erect new buildings there. The appellant failed to vacate the premises as demanded, and the respondents instituted proceedings in the Court of Small Causes, Calcutta, seeking a decree of ejectment. The Court of Small Causes granted the decree in favour of the respondents.

The respondents appealed the decree to the Special Bench of the Court of Small Causes. That appellate bench set aside the decree of the lower court. In reaching that conclusion, the Special Bench observed that the appellant had continued to occupy the premises after the lease had been determined in June 1947, and that the rent continued to be accepted by the respondents. The bench held that the appellant was therefore a “tenant holding over.” Because the purpose of the original tenancy was manufacturing, the tenancy could be terminated only by a notice of six months that expired at the end of the tenancy year. No such notice had been served; consequently, the tenancy was not deemed to have been terminated and the suit for ejectment was liable to fail.

The respondents then appealed to the High Court of Judicature at Calcutta. The High Court reversed the decision of the Special Bench and restored the original decree of the Court of Small Causes. The appellant, invoking a certificate of fitness under article 133(1)(c) of the Constitution, filed the present appeal challenging the order of the High Court. The appellant’s contractual tenancy had terminated by the mere expiry of time on 15 June 1947, and since that date there had been no fresh contractual tenancy between the parties. The respondents were evidently eager to obtain possession of the premises, but they were unable to secure the assistance of the courts because the appellant was protected by the successive rent‑control statutes. Nevertheless, the appellant continued to pay the monthly amounts that were equal to the contractual rent, and later the amounts that had been declared the statutory rent. The pivotal question before this Court was whether the respondents’ acceptance of the rent paid by the appellant conferred upon him the status of a tenant holding over within the meaning of section 116 of the Transfer of Property Act. Section 116, insofar as it is material, provides that when a lessee remains in possession after the lease has been determined and the lessor accepts rent from the lessee or otherwise assents to his continued possession, the lease, absent an agreement to the contrary, is deemed to be renewed from year to year or month to month according to the purpose for which the property was originally leased.

It was reiterated that, contrary to a general rule that a tenancy may be deemed renewed from year to year or from month to month according to the purpose for which the property is let, as prescribed in section 106 of the Transfer of Property Act, the law is clear on the effect of a landlord’s acceptance of rent after a contractual tenancy has ended. The law is well settled that when a tenancy which is subject to rent‑control legislation terminates either by the mere lapse of time or by a notice to quit, and the tenant nevertheless remains in possession, any subsequent acceptance of rent by the landlord does not constitute the landlord’s assent to a new contractual tenancy. In the judgment of B. K. Mukherjee, J., in Kai Khushroo v. Bai Jerbai, the court explained that upon the determination of a lease the lessee is obligated to surrender possession to the lessor. If the lessee or a sub‑lessee continues to occupy the premises after the lease has been determined, the landlord ordinarily has the immediate right to eject the occupant. Should the landlord refrain from acting and neither expressly assent nor dissent to the continued occupation, the occupant becomes, in English law, a “tenant on sufferance” who holds the premises without lawful title, merely by the landlord’s inaction. However, if the landlord thereafter accepts rent or otherwise signals assent to the occupant’s continued possession, a new tenancy arises under section 116 of the Transfer of Property Act, and, unless the parties agree otherwise, such tenancy is treated as a periodic tenancy from year to year or month to month in accordance with the provisions of section 106.

The court further observed that, in the context of dwelling‑house tenancies governed by the Rent Restriction Acts, a tenant may enjoy statutory immunity from eviction even after the expiry of the lease. The landlord is therefore prohibited from ejecting the tenant except on the specific grounds enumerated in the Acts. In this situation, the landlord’s acceptance of rent from a statutory tenant whose lease has already expired cannot be taken as proof of the creation of a fresh tenancy. Consequently, a tenant cannot rely on such acceptance as a defence in an ejectment proceeding by claiming that a new tenancy was formed that would require a fresh notice to quit. The Calcutta Rent Ordinance of 1946 and the later West Bengal Premises Rent Control Act of 1950 broadened the definition of “tenant” to include any person who continues in possession after the termination of his tenancy. Section 12 of the West Bengal Premises Rent Control Act expressly protects a tenant whose lease has expired, reinforcing the principle that the statutory framework, at the relevant time, afforded the appellant immunity from eviction and that the landlord’s acceptance of amounts equivalent to rent after the contractual tenancy had ended did not satisfy the requirements of section 116 of the Transfer of Property Act.

In this case the Court observed that statutory immunity had been granted to the appellant, protecting him from eviction, and that the landlord’s acceptance of amounts from him which were equivalent to rent after the contractual tenancy had expired, or which were fixed as standard rent, did not constitute acceptance of rent from a lessee within the meaning of section 116 of the Transfer of Property Act. The Court further held that a failure to take action, when such failure arose because of a statutory prohibition imposed upon the courts and not because of any voluntary conduct on the part of the appellant, did not amount to “otherwise assenting to the lessee continuing in possession”. The Court noted that the law does not forbid a landlord from entering into a fresh contract of tenancy with a tenant whose right of occupation continues by virtue of the statutory immunity.

The Court explained that, apart from an express contract, the conduct of the parties may sometimes justify an inference that after the determination of the original contractual tenancy the landlord had entered into a fresh tenancy with the tenant, but that whether the conduct justifies such an inference must always depend upon the facts of each case. Occupation of premises by a tenant whose tenancy has been determined is sustained solely by the protection granted by the statute and not by any right arising from the terminated contract. The statute protects the tenant’s possession so long as the conditions that would justify a lessor in obtaining an order of eviction do not exist. Once the prohibition against the exercise of jurisdiction by the court is removed, the lessor’s ordinary right to obtain possession springs into action, and the lessor may evict the tenant unless the statute provides otherwise.

The Court affirmed the view of the High Court that by merely accepting rent from the appellant and by failing to take action against him, the appellant did not acquire the rights of a tenant holding over. It is true that in the notice dated 10 October 1950 the appellant is described as a “ monthly tenant ”, but that description is not indicative of conduct justifying an inference that a fresh contractual tenancy had come into existence. Within the meaning of the West Bengal Premises Rent Control Act, 1950, the appellant was a “tenant”, and by calling the appellant a tenant the respondents did not evince an intention to treat him as a contractual tenant. The use of the adjective “monthly” also was not indicative of a contractual relation. The tenancy of the appellant was determined by the efflux of time, and his subsequent occupation was not in pursuance of any express or implied contract but was by virtue of the protection given by the successive statutes. That occupation did not confer any rights upon the appellant and was not required to be terminated by a notice prescribed in section 106 of the Transfer of Property Act.

The Court examined the record and concluded that the appellant’s submission did not establish any basis for overturning the lower court’s finding. Accordingly, the Court determined that the appeal was without merit and therefore could not be sustained. On that basis, the Court entered an order dismissing the appeal in its entirety. In addition to dismissing the appeal, the Court directed that the appellant be required to pay the costs incurred in these proceedings. The cost order was made in accordance with the applicable procedural rules, and it was intended to place the financial burden of the unsuccessful challenge on the appellant. The dismissal of the appeal, together with the award of costs, constituted the final relief granted by the Court in this matter.