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Civil Revision No. 221 of 1983, heard on 21st May, 1986.
‑.‑‑Ss. 111 & 116‑‑Lessee and lessor‑‑Tenant holding over‑‑Where lessee continues to be a tenant holding over, right of auction of leasehold, held, would not be available to landlord for disposal afresh by auction‑ Auction‑purchaser of such a property would acquire at the most, a right, title or interest in property but tenancy right of occupant would remain unaffected.
Mastakim Ali and 3 others v . Shafique Uddin Chowdhury and 5 others P L D 1971 S C 170 ref.
‑‑‑S. 105‑‑Lessee and lessor‑‑Rights of‑‑Distinction Rights of lessee and lessor, from their very nature, are two distinct rights in one and the same property inasmuch as they belong to two different persons and as soon as the right of the lessee comes to vest in the lessor it loses its entity. In order to grant a lease, the lessor must himself be in possession of property to be able to pass it on to his lessee.
‑‑‑Ss; 111, 116 & 105‑‑Lease‑‑Definition‑‑'Right to enjoy property'‑ Meaning‑‑Creation of a valid lease‑‑Essentials.‑‑[Words and phrases].
Lease of immovable property is a transfer of a right to enjoy such property. Right to enjoy property as defined in section 105, Transfer of Property Act, 1882 is not a mere contract but a transfer of interest in the property leased which creates a right in rem.
Lessee of a property is he who rightfully possesses it but does not own it and the lessor is he who owns it but has transferred the possession of it to another. All rights may be leased which can be possessed, that is to say, which admit of continuing exercise; and no rights can be leased which cannot be possessed. Since a lease, by its very definition in the Act, is a transfer of a right to enjoy property, therefore, it is necessary for creating a valid lease that the lessor should himself be in possession of the property.
A valid lease cannot be granted by a person not in possession of the property.
‑‑‑Ss. 111 & 116‑‑Scope‑‑Determination of tenancy‑‑Consequences of holding over‑‑Renewal of lease‑‑Tenancy created by "holding over" of lessee or under lessee is new tenancy in law even though many of terms of old lease might be continued in it‑‑Bilateral act is must to bring new tenancy into existence‑‑Acceptance of rent or otherwise‑ Effect.
Provisions of sections 111 and 116, Transfer of Property Act, 1882 relate respectively to determination of leases and consequences of holding over. In clause (a) of the former section 111, it is provided that a lease of immovable property would determine by afflux of time limited thereby and in the latter section 116, it is provided that a tenant remaining in possession of the property after the determination of lease would cause a renewal of his lease on account of the lessor accepting rent from the lessee or otherwise assenting to his continuing in possession of the property.
The tenancy which is created by the "holding over" of a lessee or under lessee in new tenancy in law even though many of the terms of the old lease might be continued in it, by implication; and it cannot be disputed that to bring new tenancy into existence, there must be a bilateral act. What section 116, Transfer of Property Act, contemplates is that on one side there should be an offer of taking a renewed or fresh demise evidenced by the lessee's or sub‑lessee's continuing in occupation of the property after his interest has ceased and on the other side there must be a definite assent to this continuance of possession by the landlord expressed by acceptance of rent or otherwise.
The ordinary legal consequence of accepting payment as indicated by the debtor would follow in such cases, however, much the creditor might attempt to repudiate them. Where money was not only paid as rent by lessee but was received as rent by lessor, a monthly tenancy under provisions of section 116, Transfer of Property Act, 1882 came into existence. So long as such monthly tenancy was not determined in a manner recognized by law, ejectment of tenant was not possible.
‑‑‑S. 116‑‑Holding‑over the property‑‑Words "or otherwise assents‑ to his continuing in possession"‑‑Such "assent" need not necessarily be express but can even be implied from facts and circumstances.
‑‑‑S. 116‑‑Tenant holding‑over‑‑Deposit of rent by such tenant‑ Withdrawal of amount so deposited by landlord, even with reservation, held, would be regarded as voluntary acceptance of rent within meaning of‑S. 116‑‑Collection of rent by landlord constitutes assent to tenant continuing in possession.
‑‑S. 116‑‑Tenant holding‑over‑‑Acceptance of rent by landlord‑‑Effect. [p. 120] L & M
‑‑‑S. 116‑‑Tenant holding‑over‑‑‑Forfeiture due to violation of terms of lease‑deed in not handing over possession of premises to landlord‑ Landlord thereafter accepted rent from lessee‑‑Landlord, held, could not take cognizance of such forfeiture as it stood waived in accepting rent by landlord.
‑‑‑Preamble, Ss. 105 to 117‑‑Position as to application of provisions of Act to Cantonment areas in Province of Punjab, stated.
Mool Chand and others v. Ganga Jal and others A I R 1930 Lah. 356; Tara Chand v. Bakhshi Sher Singh and others A I R 1936 Lah. 944; F. Ganda Singh Mehr Singh v. Secretary of State A I R 1934 Pesh. 101; Saifullah Khan v. Chaman Lal and another A I R 1936 Pesh. 43; Was Dev through Mt. Vidya Vati v . Firm Dheru Mal‑Baij Nath and another A I R 1940 Lah. 291 and Hafiz Muhammad Budha v. Ghulam Qadir 112 I.C. 651 ref.
‑‑‑ 'Due process of law'‑‑'Legally'‑‑Distinction.
Rudrappa Bin Sankappa v. Ramchandra Heblikar and another ILR 29 Bom. 213 ref.
‑‑‑S. 115‑‑Revision‑‑Where Trial Court neither had acted in disregard of law nor had improperly exercised his discretion in passing order of variance passed in appeal below, held, was liable to be set aside in revision. [ P . 122 ] R
‑‑‑S . 105‑‑Lease gaining effect in perpetuity on account of conduct of parties can go on indefinitely as leases in perpetuity are envisaged by S.. 105 of Act itself.
‑‑To 'be proved by party alleging.
Muhammad Aref Effendi v . Egypt Air 1980 S C M R 588; Ismail Brothers v. Keval Ram P L D 1981 S C 545; Pakistan through the Secretary, Ministry of Defence v. Province of Punjab and others P L D 1975 S C 37; The Federation of Pakistan through the Secretary, Establishment Division, Government of Pakistan Rawalpindi v. Saeed Ahmad Khan and others P L D 1974 S C 151; Anwarali Bepari and others v. Jamini Lal Roy Choudhury and others A I R 1940 Cal. 89; Knndasami Pillai and others v. Ramasami Mannadi and others A I R 1919 Mad. 168; Salmond, at page 414 of his book on Jurisprudence 12th‑1966 Edition; Olivia H. Tiery v. Kristodhun Bose etc. 1 I A 76; Mastakim Ali and 3 others v. Shafique Uddin Chowdhury and 5 others P L D 1971 S C 170; Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden and another A I R 1949 F C 124; Ashutosh Basak and others v. S.M. Rahmatullah and others 1970 S C M R 386; Hafiz Muhammad Budha v. Ghulam Qadir and others 112 I.C. 651; Ramsunder Tewari and another v. Dulhian Bataso Kuer A I R 1935 Pat. 271; Banathoor Krishan Namburdripad v. Kunkan Nair A I R 1925 Mad. 914; Shira Prasad Singh v. Smt. Mandira Kumar Debi A I R 1940 Pat. 478; Anshutosh Mullick and others v. Secretary of State A I R 1920 Cal 655; Chattar Singh and others v. Nand Kishore A I R 1914 All. 460(2); Bengal‑Nagpur Railway Company Limited v. Firm Bal Mukunda Biseswar Lall AIR 1923 Cal. 663; Raja Sri Krishna Narain Singh v. Sheikh Nazir Hassan and others A I R 1939 Oudh 257; The King v. Paulson and others A I R 1920 P C 190; Sripada Satyanarayana Sarma v. Ravikanti Venkataramamurthy and others A I R 1935 Mad. 454; Matookdhari Skukul v. Jugdip Narain Singh and others A I R 1915 Cal 454 (D.B.); Durgi Nikarini v. Goberdhan Bose A I R 1915 Cal. 64; Mst. Bevi Umma v. Thekkiniyedath Allath Shamu Menon and another A I R 1917 Mad. 141; Adinath Bhattacharjee v. Krishna Chandara Bhattacharjee and others AIR 1943 Cal. 474; Ashutosh Basak 1970 SCMR 386; Habibullah Shah v. Surji XV I.C. 857'; M. Ghani v. M.A. Mullick & Brothers and 3 others 1973 S C M R 90; Rudrappa Bin Sankappa v. Ramchandra Heblikar and another I L R 29 Bom. 213; Mool Chand and others v. Ganga Jal and others A I R 1930 Lah. 356; Tara Chand v. Bakhshi Sher Singh and others A I R 1936 Lah. 944; Firm Ganda Singh Mehr Sigh v. Secretary of State A I R 1934 Pesh. 101; Saifullah Khan v. Chaman Lal and another A I R 1936 Pesh. 43; Was Dev through Mt. Vidya Vati v. Firm Dheru Mal‑Baij Nath and others A I R 1940 Lah. 291; Katragadda Brahmayya, minor and others v. Katragadda Balatripura Sundaramma and others A I R 1948 Mad. 275; Ghazi Nasiruddin v. Seth Hashim Dawood Divan and others P L Q 1962 Kar. 59; Secretary of State for India in Council v. A . H . Forbes 17 I. C . 180; Tellicherry Pichi Naidu v. C. Jefferson A I R 1921 Mad. 541; Secretary of State for India v. Volkart Brothers AIR 1927 Mad. 513 and I L R 25 Mad. 3ref. Maulvi Sirajul Haq for Petitioner. Bashir Ahmad Ansari for Respondent.
Dates of hearing: 20th and 21st May, 1986.
This civil revision arises out of the order dated 14‑11‑1983, passed by Hafiz Khalil Ahmad. learned Additional District Judge, Rawalpindi, to partly accept the respondent's appeal and modify the trial Court's order dated 28‑7‑1983 with regard to temporary injunction issued in favour of the petitioner in his suit for permanent injunction to restrain the respondent from either auctioning the leasehold rights of Hotel Marhaba, Jinnah Road, Murree or interfering with his possession thereof and also from ejecting him therefrom otherwise than in due process of law.
2. The suit was instituted on 25‑7‑1983 in the Court of Civil Judge, Murree and interim orders passed in the suit show that although a brief reply to contest the plaintiffs application for grant of temporary injunction was submitted by the respondent on 28‑7‑1983, yet the written statement in the suit was not filed in spite of four adjournments secured for this purpose until 13‑9‑1983, by which date the file of the suit had been sent to the appellate Court in connection with the respondent's appeal against the temporary injunction and had been received back only in June, 1984 to be adjourned sine die on 11‑7‑1984. Relevant copies from the trial Court record have been filed with this civil revision but a copy of the written statement is not there. On my inquiry, learned counsel for petitioner has stated that the written statement has not so far been filed by the defendant. Learned counsel for respondent has not been able to controvert this representation and has, after going through his brief received from the Mufassil, stated that there is no copy of the written statement available even therein. In this situation, even though the provisions of Order VIII, Rule 10 of the C . P. C . , read with rule 1 thereof, have become liable to be enforced in the suit, yet, for the purposes hereof, the averments made in the plaint will have to be accepted as uncontroverted.
3. The facts giving rise to this litigation, as ascertained from the record, with reference to the plaint, are that the respondent Cantonment Board being the owner of a multistoreyed building‑complex comprising of some shops and one 'A' Class hotel and restaurant in Murree, had invited tenders in the year 1972 for its being leased out for a period of five years extendable to 10 years and the petitioner emerged successful in securing the lease at a rental of Rs.90,000 per annum against his own highest tender of Rs.85,500 per annum and his offer having been accepted by the respondent Board on 2‑5‑1972, there followed a deed of lease, executed on 20‑12‑1972 and registered with the Sub‑Registrar, Murree on 2‑1‑1973 for a period of five years, from 20‑7‑1972 to 20‑7‑1977. Therein the premises leased out to the petitioner is mentioned just as 'a hotel', presumably because by then a name for it had not been settled to run the contemplated business. The rent was fixed therein as Rs.90,000 per annum (unalterable) for the entire period of five years of the currency of the lease and the respondent‑Board also under took to give due consideration to the lessee's case for extension of the lease, before entering into agreement with any other party. It is alleged in the plaint that in the meanwhile, plaintiff had been handed over incomplete building on 3‑7‑1972 which he not only completed at a huge personal expenditure but also furnished with an investment of Rs.1,25,000 in accordance with the directions of the respondent and, in addition thereto, even equipped the premises with the necessary provisions and fittings to establish Hotel Marhaba there with a colossal expenditure and that in due course of time, this hotel came to gain solid reputation which was subsequently also acknowledged by the Director, Military Lands and Cantonments as having enhanced the value of the property and, when the first period of five years of this lease had just run out, on 20‑7‑1977 there was executed another registered lease‑deed between the parties for a further period of three years wherein redetermined rates of rent were set out. In clause 14 thereof it is mentioned, "the present lease 'shall be renewable' for the next three years on the expiry of current three years period or otherwise according to the policy of Government and of the Cantonment Board in this regard". Then, just towards the end of the period of second lease, on 16‑10‑1979, another registered lease‑deed for three more years was executed between the parties wherein the rent for the first year ending on 31‑10‑1980 was mentioned to be Rs.1,79,685 with suitable increase in the following years and clause 14 thereof was modified to provide, "the tenure of the present lease 'shall be renewed' for the next three years on the expiry of current three years period or otherwise according to the policy of the Government of the Cantonment Board in this regard at that time'. This lease‑deed had not completed even its first year when a deed of rectification was executed and got registered on 6‑5‑1980 to provide for rent of Rs.2,15,000 with effect from 1st November, 1979 to 31st October, 1980 with a 10 increase in rent every year for the remaining period upto 31‑10‑1982. Thereby not merely the rent for the first year of the current lease was substantially enhanced but, in fact, the structure of the agreed rent for the following years was also materially altered due to the provision made about a further 10% annual increase. The foregoing treatment meted out to the plaintiff has been described by him as mala fide and a result of illegal tactics. Although the use of the words, 'shall be renewed' in the above‑mentioned clause 14 of the last lease agreement between the parties, as distinguished from the expression 'shall be renewable', used in the previous one, signified that renewal of lease would be automatic and a formal request for the purpose may not have to be made by the lessee, yet, the plaintiff made a written request for renewal of the lease which was placed before the respondent but he was told that the leasehold rights would be auctioned. However, the desired action was at that time withheld on account of intervention of authorities at the representations made by the plaintiff and he was still continuing to 'hold‑over' the property, when there appeared advertisements in the newspapers with regard to the contemplated auction being held on 30‑7‑1983. This obliged him to file the suit with the prayers mentioned above and to also apply for grant of a temporary injunction to the same effect.
4. In his order dated 28‑7‑1983, learned Civil Judge took note of the fact that the past history of the lease, as mentioned by the plaintiff, had not been controverted by the respondent and after hearing the counsel for the parties, he accepted the prayer for grant of temporary injunction for the reasons that the plaintiff is a tenant holding‑over on account of rent paid upto 30‑10‑1983, as was borne out by the receipt dated 21‑7‑1983 and had invested huge amount on the disputed premises in addition to creating a goodwill for the hotel. He concluded that the petitioner had a strong prima facie case in his favour and referred to Muhammad Aref Effendi v . Egypt Air 1980 S C M R 588 as justifying the grant of temporary injunction. He also found that the considerations of balance of convenience and apprehension of irreparable loss and injury were in his favour for the reason that he has continued in possession of a commercial premises for the last 10 years and, as had been laid down in Ismail Brothers v . Keval Ram P L D 1981 S C 545, withholding of temporary injunction would not only result in his physical ouster but will also cause his financial and economic disruption, the reparation and restoration whereof may not be possible in the event of his ultimate success. Consequently, he accepted his application and confirmed the interim injunction already passed on 28‑7‑1983 to restrain the respondent from auctioning the leasehold rights.
5. Respondent maintained an appeal there against‑on 3‑9‑1983. in the memo whereof the above‑noted facts of the plaintiff's suit were again not controverted in any way and, after admitting in para. 2 thereof that the appellant had received rent upto 31‑10‑1983, justification of the trial Court's order was, in a way, acceded to in submitting in para. 6 thereof that the order of restraint may be sustained upto 31‑10‑1983. Ultimately, whereas the learned Additional District Judge accepted the plaintiff‑petitioner's contention that he is a tenant holding‑over with the consent of the lessor he considered that the benefit thereof would not ensure to him beyond 31‑10‑1983 because rent after the expiry of lease‑period had been accepted from him upto that date only and he concluded that since, under section 108 of the Cantonment Act, 1924, the Cantonment Board has the right to manage and control its property, therefore, the order of restraint about auction of leasehold rights, impugned before him, constituted undue interference with such a right of the Board. However, he did not uphold the contention with regard to a power vesting in the Board to summarily take over possession of the premises after the expiry of the period of lease and repelled it with the following observations:‑
"The lease was granted to the respondent in the year 1972. It was incomplete building. The respondent has spent huge amount for its completion and decoration. Defendant is in possession of the property even after the expiry of the original lease. It is against the principle of natural justice that the tenant is thrown out of the Hotel summarily who is responsible for making this incomplete building 'Hotel Marhaba' in its true spirit. This hotel has gained much significance on account of its being upto the required standard. Lacs of rupees have been spent upon it. The respondent has rendered great service to the Board in creating goodwill as admitted in the correspondence of the Board with the higher authorities. The Board has to adopt the legal course for dispossession, intead of summary ejectment. So. I find that the respondent has a prima facie case to maintain his possession till he was ejected in due course of law."
In consequence, he confirmed the order of restraint passed by the trial Court with regard to plaintiff's ejectment otherwise than in due course of law till the final decision of the suit but vacated the order prohibiting the auction of leasehold rights and partly accepted the respondent's appeal on 14‑11‑1983. Plaintiff‑petitioner has now come up to this Court in revision
6. Learned counsel argues that the appellate Court has erred in unlawfully limiting the benefit of the petitioner's holding‑over of the premises upto 31‑10‑198,: only and that therein it has acted inconsistently even with the reasons which had led it to protect his possession of the property as a tenant holding‑over because it has therein wrongly assumed that such a right could be capable of being terminated by the respondent by merely refusing to any more accept rent from him. It is submitted that as a tenant holding‑over, the petitioner has a legal right to remain in possession so long as his right as such continues and is not terminated in accordance with law and it is argued that despite the learned Judge in the' appeal below having himself propounded a proposition to such an effect, he has acted illegally in the exercise of his jurisdiction to omit to give full effect to it by vacating the other part of the order which had been passed by the trial Court upon due consideration of the rules governing the grant of temporary injunctions so that the trial Court's exercise of discretion in the matter was not liable to be interefered with. Learnea counsel has submitted also that the petitioner has all along carried out the terms of the lease‑deed and has continued to pay the agreed rent and is even now depositing the same in the Court in accordance with the agreed rate so that he is not in arrears. In this context, while referring to the order, dated 29‑5‑1985 passed at the request of the respondent's counsel to permit the respondent Board to withdraw the money deposited in its favour by the petitioner, learned counsel for the petitioner has also invited attention to the respondent's Civil Miscellaneous No. 1318/C of 1985, bearing the date 21‑12‑1985, filed for soliciting early hearing of the revision petition. In para. 2 thereof it stands clearly admitted, "the revision‑petitioner is paying only Rs.3,00,000 per annum". Argument of the learned counsel is that the foregoing, coupled with the respondent's failure to sue out for ejectment of the petitioner raises a presumption that he has assented to his holding‑over the premises. He has also placed heavy reliance on Ismail Brothers v. Keval Ram P L D 1981 S C 445 wherein, while considering the rule of balance of convenience and nature of injury likely to be caused, their Lordships of the Supreme Court took notice of the fact that the property was being put to commercial use since more than 20 years and likelihood of dispossession was considered sufficient to justify the claim for temporary injunction because it will not merely bring about physical ouster but would also cause financial and economic disruption, the reparation and restoration whereof may not be possible in the event of ultimate success of the party. It is urged that since Hotel Marhaba has been established by the petitioner who has also earned sound reputation for it by his sweat and money, therefore, the hotel, as such, also includes vital interests of the petitioner which neither belong to the respondent nor to the premises so that the hotel cannot be considered to be comprising merely of a structure of four‑walls and the respondent does not have any right to auction away such interests of the petitioner, therefore, learned Additional District Judge has erred in being of view that the respondent had a legal right to manage and control its property in such a way as to auction away the leasehold rights in the hotel and that the respondent is not entitled to any special privilege, different from any other owner of private property so that in the event of such an auction taking place during the currency of the petitioner's rights as a tenant holding‑over, he would suffer irreparable loss and balance of convenience being in his favour, the trial Court's order could not be modified to permit invasion of the rights of the petitioner during the pendency of his suit which raises substantial questions of law and fact. Reliance is placed on Muhammad Aref Effendi v . Egypt Air in suport of the order of restraint passed by the trial Court.
7. In reply, apart from contending that there will stand made a lease in perpetuity in favour of the petitioner and repeated effect being given to the renewal clause in the lease‑deed which was not intended by the parties to operate in such a way, learned counsel for respondent has, without disputing the facts forming the basis of the petitioner's claim as a holding‑over tenant, also adopted a new line of attack to dispute the consequences thereof. He has argued that since by virtue of section 287 of the Cantonments Act of 1924, the application only of section 107 of the Transfer of Property Act, in respect only of form of lease‑deeds, has been extended to the cantonments, therefore, the remaining provisions of the Act, including the principle of holding‑over contained in section 116, do no get attracted to the Cantonment areas. He has half‑heartedly contended also that the provisions of section 114 of the Cantonments Act, 1924 have not been complied with in executing the lease‑deed whereunder the petitioner claims to hold‑over the premises, therefore, it is not binding on the respondent Board and the benefit of the rules of holding‑over does not avail to the petitioner. He has also placed reliance on Pakistan through the Secretary, Ministry of Defence v. Province of Punjab and others PLD 1975 S C 37, in support of his argument about a right to manage the property vesting in the respondent Board and has referred to Rule 9 (iv) of the Pakistan Cantonment Property Rules, 1957, framed under section 3 of the Cantonments Act, 1924 to contend that there is power in the authority sanctioning the lease to summarily remove any lessee who has contravened any provision of the lease‑agreement and resume possession of the property and that since clause 14 of the lease‑deed of 1979 envisages a peaceful handing over of the premises to the lessor in the event of the tenure thereof being not renewed by the Board, but the petitioner has not surrendered the possession which he is still holding, therefore, contravention of the provision of the lease had come to be made, justifying the exercise of power under the said rule. In the end, he has invited attention to The Federation of Pakistan through the Secretary, Establishment Division, Government of Pakistan Rawalpindi v . Saeed Ahmad Khan and others P L D 1974 S C 151 to submit that mala fides cannot be inferred against the respondent without proper proof because an initial presumption of regularity arises with regard to all official acts.
8. There is no dispute between the parties with regard to the basic facts and the petitioner holding‑over the premises. Learned counsel, however, differ about the effect thereof and hence, this case calls for the respective contentions being considered in some detail. After giving anxious consideration to the dispute raised herein, I have come to the conclusion that whereas the petitioner has a strong case, the pleas raised in opposition hereof do not have merit and are devoid of substance. The order impugned herein is also inconsistent in so far as it has, on the one hand, upheld the petitioner's possession of the premises as a tenant holding‑over and has prohibited interference therewith except in due course of law and, on the other assumed wrongly that his continuance in possession as such could depend on the sweet will of the respondent who could deprive him of it by simply refusing to any more accept rent from him. In taking such view, learned Additional District Judge has omitted to attend to the provision made in section 116 of the Transfer of Property Act and his assumption that the benefit of holding‑over could be available to the petitioner only upto 31‑10‑1983 seems to have resulted from inadequate comprehension of the nature of leasehold rights, holding‑over and the legal consequences flowing there from. Actually, an order to restrain auction of leasehold rights had to follow as a logical consequence of l the restraint order upheld by the learned Additional District Judge himself and, on his part, it is a contradiction in terms to have vacated the trial Court's order of restraint with regard to auction of lease‑hold A rights in the presence of upholding the restraint about dispossession of the petitioner otherwise than in due course of law because so long as the petitioner continues to be a tenant holding‑over, such right will not be available to the landlord for disposal afresh by auction and, as will be presently shown, rights of lessee and lessor, from their very, nature, are two distinct rights in one and the same property inasmuch as they belong to two different persons and as soon as the right of the lessee comes to vest in the lessor it loses its entity. It is also clear that in order to grant a lease, the lessor must himself be in possession to be able to pass it on to his lessee. A lease is defind in section 105 of the Transfer of Property Act which,' so far as is relevant hereto, reads as under:‑
"A lease of immovable property is a transfer of a right to enjoy such property made for a certain time, express or implied, or in perpretuity, in consideration of a price paid or promised, . . . to the transfer by the transferee, who accepts the transfer on such terms."
The right to enjoy the property, mentioned in this definition, has been held in Anwarali Bepari and others v . Jamini Lal Roy Choudhry and others A I R 1940 Cal. 89 to be not a mere contract but a transfer of interest in the property leased which creates a right in rem. To the same effect is also Kandasami Pillai and others v . Ramasami Mannadi and others A I R 1919 Mad. 168. Salmond, at page 424 of his book on Jurisprudence (12th‑1966 edition) has after describing a lease to be the outcome of the separation of ownership and possession, gone on to state that being a rightful separation of possession, it constitutes an enumbrance of the owner's title. According to him, lessee of a property is he who rightfully possesses it but does not own it and the lessor is he who owns it but has transferred the possession of it to another. Learned author has then also stated, "All rights may be leased which can be possessed, that is to say, which admit of continuing exercise; D and no rights can be leased which cannot be possessed" . Since a lease, by its very definition in the Act, is a transfer of a right to enjoy property, therefore, it is necessary for creating a valid lease that the lessor should himself be in possession of the property. To this effect is also the judgment of the Judicial Committee of the House of Lords reported in Olivia H . Tiery v . Kristodh.un Bose etc. 1 Indian Appeals 76, wherein two conflicting claims based on respective leases about the same property had come up for consideration and their Lordships decided the case on the consideration that a valid lease cannot be granted by a person not in possession of the property. In the present case, it is not under contest that the last registered lease for a period of three years was executed in favour of the petitioner on 16‑10‑1979, to determine by efflux of time on 31‑10‑1982; and the petitioner has thereafter continued in possession of the premises and is also paying annual rents with regard thereto, the one for the period upto 31‑10‑1983 having been accepted by the respondent by means of receipt issued on 21‑7‑1983. In Mastakim Ali and 3 others v . Shafique Ilddin Choudhury and 5 others P L D 1971 S C 170, where tenancy was being held‑over, their Lordships of the Supreme Court have declared that an auction‑purchaser of such a property would acquire, at the most, a right, title or interest in the property but tenancy right of the occupant would remain unaffected. Hence, the right acquired by the petitioner as a tenant holding‑over will not end up automatically F and will be capable of being determined only as is provided for in law, either upon default being committed by the petitioner or proceedings being taken in accordance therewith by the respondent. It is clear that so long as the petitioner rightfully remains in enjoyment of the property, the respondent would not have any right to put the leasehold rights to auction and the order of restraint passed by the trial Court in that behalf was eminently justified. Learned Additional District Judge has fallen in error in assuming that right of the petitioner was to be considered limited only upto 31‑10‑1983 on account of the rent having been accepted by the respondent upto that date and therein he has been oblivious of the provisions made in sections 111 and 116 of the Transfer of Property Act which relates respectively to determination of leases and consequences of holding‑over. In clause (a) of the former section 111, it is provided that a lease of immovable property would determine by efflux of time limited thereby and in the latter section 116, it is provided that a tenant remaining in possession of the property after the determination of lease would cause a renewal of his lease on account of the lessor accepting rent from the lessee or otherwise assenting to his continuing in possession of the property. In Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden and another A I R 1949 F C 124, it has been observed at page 127 of the report as under:‑
"It is perfectly right that the tenancy which is created by the 'holding over' of a lessee or under lessee is new tenancy in law even though many of the terms of the old lease might be continued in it, by implication; and it cannot be disputed that to bring new tenancy into existence, there must be a bilateral act. What H section 116, Transfer of Property Act, contemplates is that on one side there should be an offer of taking a renewed or fresh demise evidenced by the lessee's or sub‑lessee's continuing in occupation of the property after his interest has ceased and on the other side there must be a definite assent to this continuance of possession by the landlord expressed by acceptance of rent or otherwise."
and then, after considering the effect of acceptance of rent and the subsequent repudiation thereof, it has been observed at page 130 of the report as under:‑
"The ordinary legal consequence of accepting payment as indicated by the debtor would follow in such cases, however, much the creditor might attempt to repudiate them. This being the position it must be held on the facts of this case that money was not only paid as rent by defendants 2 and 3 but was received as rent by the plaintiff and consequently a monthly tenancy under the provision of section 116, Transfer of Property Act, did come into existence. So long as this monthly tenancy is not determined in a manner recognized by law, the plaintiff's suit for ejectment must fail."
In the appeal below, learned Additional District Judge seems to have thought that acceptance of rent by the lessor could be the only mode of attracting the rule of hold‑over of the property and he appears to have ignored the words "or otherwise assents to his continuing in 'T possession", appearing in section 116 of the Act. Such assent need not necessarily be express and it can even be implied from the facts and circumstances. In Ashutosh Basak and others v. S.M. Rahmatullah and others 1970 S C M R 386, their Lordships of the Supreme Court repelled the contention that a landlord could, by merely refusing to accept rent, lawfully terminate a tenancy and it was held that where the relationship of landlrod and tenant is established and the tenant holds over the property but the landlord neither takes the rent nor brings a suit for ejectment after the expiry of the lease‑period, there a presumption arises that the landlord has assented to holding‑over. Learned counsel for the petitioner has also rightly pointed out that even as late as 21‑12‑1985 the respondent has admitted in Civil Miscellaneous No. 1318 C of 1985 that revision‑petitioner is paying Rs.3,00,000 per annum and, further, that it has through his counsel also prayed for withdrawal of the money deposited in its favour by the petitioner and obtained an order on the point from this Court. The reservation then made with regard to such withdrawal being without prejudice to the case of the respondent, does not prevent it from being regarded a voluntary acceptance of rent within the meaning of section 116 ibid. There is ample authority for the view that such collection of rents by the respondent constitutes an act of its assent to the petitioner continuing in possession of the premises. In Hafiz Muhammad Budha v. Ghulam Qadir and others 112 I C 651 Lah., where, after the expiry of the term of a lease for only one year, the tenant had continued in possession and the landlord had, after some years of the expiry of the lease‑year, sued for recovery of arrears of rent but not for ejectment and had obtained a decree, in his subsequent suit for ejectment, this Court held:‑
"Institution of a suit merely for arrears of rent amounted to a consent on the part of the landlord to the tenants remaining in possession and attracted the application of section 116 of the Transfer of Property Act."
Again in Ramsunder Tewari and another v. Dulhin Bataso Kuer A I R 1935 Pat. 271, it was held that a landlord's instention of recognizing the continuance of the tenancy was sufficiently indicated from the fact that a suit for recovery of rent had been instituted by him. Even in cases of forfeiture of leases under section 111(g) collection of rent accruing due subsequent to forfeiture, after becoming aware of the fact that forfeiture has been incurred, has been held to amount in law to waiver of forfeiture. See, for instance, Banathoor Krishan Namburdripad v. Kunkan Nair A I R 1925 Mad. 914 and Shira Prasad Singh v. Smt. Mandira Kumari Debi A I R 1940 Pat. 478. A‑gain, in Anshutosh Mullick and others v. Secretary of State A I R 1920 Cal. 655 forfeiture of lease due to infringement of the terms of the lease‑deed, was held to have been waived on account of realization of rent for the period subsequent to the incurring of forfeiture by the Deputy Commissioner by attachment of movables of the lessee, and, so also, in Chattar Singh and others v. Nand Kishore A I R 1914 All. 460 (2), it was held:‑
"Where a lease is forefeited for an act done in contravention of the terms of the lease, an acceptance of rent subsequent to forfeiture would amount to waiver."
Such acceptance of rent even under protest or conditionally, as without prejudice of forfeiture, has been held to constitute waiver thereof. In Bengal Nagpur Railway Company Limited v . Firm Bal Nukunda Biseswar Lal A I R 1923 Cal. 663, it was held:‑
"The acceptance of rent due after forfeiture from the lessee .... and this notwithstanding the protest of the lessor that such acceptance is without prejudice to his right to insist upon his forfeiture ...operates as a waiver of the notice to quit."
Again, in Raja Sri Krishna Narain Singh v. Sheikh Nazir Hassan and others A I R 1939 Oudh 257, it has been held:‑
"If there is any forfeiture under the principle of section 111(g) (2), it is waived by the acceptance of rent by the landlord which became due since the forfeiture even if the acceptance of rent is under protest."
It will also be in point to notice that in The King v. Paulson and others A I R 1920 P C 190, where there was a clause in the lease‑deed itself providing that waiver of forfeiture on account of breach of conditions will not be operative unless expressed in writing, while considering the effect of receipt of rent by the landlord subsequent to the arising of the liability for forfeiture, it was observed at page 195 of the report:‑
"The authorities appear to their Lordships to establish that the landlord, by the receipt of rent under such circumstances, shows a definite intention to treat the lease or contract as subsisting has made an irrevocable election so to do, and can no longer avoid the lease or contract on account of the breach of which he had knowledge."
In Sripada Satyanarayana Sarma v. Ravikanti Venkataramamurthy and others A I R 1935 Mad. 454 it was held that a conditional acceptance of rent by the lessor after default involving a forfeiture is nonetheless a waiver. To the same effect is also Matookdhari Skukul v. Jugdip Narain Singh and others A I R 1915 Cal. 454 (D . B .) wherein rent deposited had been received under protest and it was held that acceptance of rent even under protest would operate in favour of the payer as a waiver of any forfeiture incurred because protest does not make the receipt anything else than the receipt of rent.
9. Thus, in accepting the rent from the petitioner upto 31‑10‑1983, respondent had not merely made an irrevocable choice in the petitioner continuing in possession of the property as a tenant holding‑over but had also waived the forfeiture incurred under clause 16 of the lease‑deed of 1979 due to his failure to peacefully hand over the possession, in accordance with its clause 14. Even the subsequent withdrawal by the respondent of rent on the basis of the order secured from this Court on 29‑5‑1985, though with reservation, has the same effect. Such receiving of rents would not be otherwise than as voluntary and would not convert the money so received into anything other than rent and has to be regarded to have invested a right in the petitioner to continue L as a tenant holding‑over in the minimum, as a year to year lessee because by agreement of the parties rent was determined to be payable on yearly basis and has all along been so paid, which, as has been held in Durgi Nikarini v. Goberdhan Bose A I R 1915 Cal. 64 and Mst. Bevi Umma v. Thekkiniyedath Allath Shamu Menon and another A I R 1917 Mad. .141, raised a presumption about the tenancy being from year to year and constitutes a contract to one contrary within the contemplation of section 106 of the Transfer of Property Act, as has been held in the above‑cited Allahabad and Calcutta cases of 1914 and 1915. Again, in Adinath Bhattacharjee v. Krishna Chandra Bhattacharjee and others A I R 1943 Cal. 474, a Division Bench of Calcutta High Court held:‑
"The reservation of yearly rent raises a presumption that lease is from year to year, in the absence of anything to the contrary."
10. Acceptance of rents aforenoted is only one of the factors indicating the assent of the respondent to the petitioner continuing in possession of the premises and since it has not been asserted by the learned counsel for the respondent that it has taken any step under the law for dispossession of the petitioner, therefore, a further presumption to, that effect arises in favour of the petitioner within the scope of the words "or otherwise assents, 'appearing in section 116 of the Transfer. of Property Act. In the above‑cited case of Ashutosh Basak 1970 S C: M R 386, the tenant was found to be continuing in possession of the, property after the expiry of the period of lease but the landlord had neither taken rent nor filed a suit for his ejectment, their Lordships of the Supreme Court did not accept the contention that a landlord could, by merely refusing to accept rent, lawfully terminate a tenancy and declared the law as under:‑
"When the existence of relationship of landlord and tenant has once been proved and the landlord after the expiry of the lease neither takes rent nor brings a suit for ejectment for so long a period as six years, as in the present case, it might well be presumed that he had assented to the holding‑over."
11. Most of the arguments of the respondent's learned counsel stand answered in the above discussion. As regards his contention about the forfeiture due to the violation of the terms of the lease‑deed entitling the respondent to act under rule 9(iv) of the Pakistan Cantonment Property Rules, 1957, forfeiture was no doubt incurred in not handing over the possession of the premises upon the determination of the lease towards the end of the year 1982 but it stood waived in the respondent having thereafter accepted rent from the petitioner and hence it is not open to the respondent to thereafter take cognizance of it. Moreover, in Habibullah Shah v. Surji XV Indian Cases 857, it was held:‑1
"If a lease reserves to the lessor the right of entry in case of a breach of a covenant, the result of the breach is at best to confer upon the lessor the right of re‑entry, and not to entitle the lessor to make a forcible entry. If the lessee resists the exercise of the right to re‑enter, the lessor's only remedy is to enforce his right to re‑enter by a suit in ejectment."
It has been laid down in M. Ghani v. M.A. Mullick and Brothers and 3 others 1973 S C M R 90 that unless and until a tenant is ejected in due process of law he has a right to remain on the premises, and no one can dispossess him. Then, in Rudrappa Bin Sankappa v. Ramchandra Hablikar and another I L R 29 Bom. 213, where a tenant holding‑over after the expiry of the period of tenancy was dispossessed without his consent by the landlord, on the tenant's claim to recover possession from the landlord with reference to section 9 of the Specific Relief Act, it was held by a Division Bench of the Bombay High Court that the words 'due course of law' do not have to be taken merely as N equivalent to the word 'legally' but have to be generally regarded as N indicating that the thing should have been submitted to the consideration and pronouncement of the law and it was declared that thereby is meant the regular normal process and effect of the law operating on a matter which has been laid before a Court for adjudication.
12. The forenoted argument is, even otherwise, not open to the learned counsel to be taken for the respondent because the order of restraint confirmed by the learned Judge in the appeal below has not been assailed by the respondent who seems to be content therewith. Contention of the learned counsel for the respondent is repelled for all the foregoing reasons.
13'. Next objection of the learned counsel that the provisions of the Transfer of Property Act have not been extended to the Cantonment areas in the Punjab is no doubt correct but it is only unavailing because in the areas, including the Province of Punjab, whereto the application of the Act itself has not been extended, those provisions of it which embody the principles of equity, good‑conscience and justice have always been applied. Even though a large number of cases from the Punjab and other Provinces can be cited on this point, yet, reference may be made only to the Full Bench judgment in Mool hand and others v. Ganga Jal and others A I R 1930 Lah. 356; Tara Chand v. Bakhshi Sher Singh and others A I R 1936 Lah. 944; Firm Ganda Singh Mehr Singh v. Secretary of State A I R 1934 Pesh. 101; Saifullah Khan v. Chaman Lal and another AIR 1936 Pesh. 43 and Was Dev through Mt. Vidya Vati v. Firm Dheru Mal‑Baij Nath and another AIR 1940 Lah. 291. Rules embodied in sections 105 to 117 of the Transfer of Property Act, excepting those relating to form of leases in section 107, thereof, are such rules of law and are, therefore, applicable in p the instant case. The specific application of section 107 Transfer of Property Act to the Cantonment areas, as regards only the form of leases, is rather a pointer to the effect the remaining rules of the Act will continue to apply as above. More in point, however, is the judgment of the Lahore High Court in the already cited case Hafiz Muhammad Budha v. Ghulam Qadir 112 I.C. 651 wherein principle of section 116 of the Transfer of Property Act was applied to a case from Hoshiarpur. To the same effect is also a Full Bench judgment of the High Court of Madras, based on a number of other cases, in Katragadda Brahmayya, Q minor and others v. Katragadda Balatripura Sundaramma and others AIR 1948 Mad. 275. The rules in sections 105 to 116 of the Transfer of Property Act, therefore, apply to this case and contention to the contrary raised by the learned counsel for respondent is repelled. There is no cavil with the right of the respondent Board to manage its property under section 108 of the Cantonments Act II of 1924 but it can be exercised only in accordance with the law, with due regard to the rights of others created by the Board by incurring obligations under the law which have to take effect accordingly, but not so as to defeat them. The respondent Board is not entitled to any special privileges, different from those of the ordinary citizens of the State and cannot be considered entitled to disregard the aforesaid law. There would be no conceivable negation of the respondent's right to manage its property involved in its being restrained from auctioning the lease‑hold rights of the property in dispute which, as has been demonstrated above cannot inhere in it so long as the petitioner continues to avail himself of the right to enjoy property as a tenant holding‑over and restraint in that behalf ordered by the trial Court was correct as even logically flowing from the order of protection of possession of the petitioner so that it could not have been vacated by the learned Additional District Judge who has not specifically held in clear terms that the learned trial Judge had acted in disregard of the law or had improperly exercised his discretion in passing such an order, as has been held in Ghazi Nasiruddin v. Seth Hashim Dawood Divan and others P L D 1962 Kar. 59, the order of variance passed in the appeal below is liable to be set R aside in revision.
14. Objection of the learned counsel with regard to the lease‑deed gaining effect in perpetuity is liable to be repelled straightaway with reference to section 105 of the Act which itself envisages leases in perpetuity and there cannot be anything illegal in the lease‑deed of S the year 1979 gaining effect in perpetuity on account of the conduct of the parties because such a lease can go on indefinitely. It has been held in Secretary of State for India in Council v. A.H. Forbes 17 Indian Cases 180 as under:‑
"An express covenant to renew in appropriate technical language is not essential, and the habendum may be so framed as to amount in substance to a covenant to form even perpetual renewal. "
The covenant for renewal of lease runs with the property. In Tellicherry Pichi Naidu v. C. Jefferson A I R 1921 Mad. 541, it was held:‑
"A covenant to renew at the option of the lessee is a covenant running with the land and is not subject to any rule against perpetuities. "
To the same effect also are Secretary of State for India v. Volkart Brothers A I R 1927 Mad. 513 and Reference under Stamp Act, section 57 I L R 25 Mad. 3 (F.B.). Argument of the learned counsel is, therefore repelled.
15. A photostat of the lease‑deed dated 16‑10‑1979 has been placed by the petitioner on this record. It has been signed by the President and a member of the Cantonment Board Murree and has also been countersigned by its executive officer. In addition thereto, two witnesses, Malik Muhammad Akram and Haji Muhammad Ashraf have also signed it. It conforms to the requirements of section 114 of the Cantonment Act, 1924. Learned counsel has himself relied on its clauses 14 and 16 to canvass his argument about forfeiture and inconsistently enough, he also regards it as illegal. This deed has been accepted and acted upon by the parties for the full term of its life and even subsequent thereto. No objection thereabout is open to be now taken by the respondent as regards its validity and contention of the learned counsel is repelled for the foregoing reasons.
16. There is no doubt that in order to succeed on the ground of mala fides, if the petitioner at all so wants, he will have to prove it T according to law in his suit but, as yet, that stage has not reached) and, for the present, nothing more need be said thereabout.
17. Before parting with this case, it deserves to be observed that all the foregoing discussion is limited to the controversies actually raised before me in this proceeding and is neither intended to be an expression of opinion on the facts and law applicable to the suit nor will it be deemed to be a determination of any of the questions likely to arise in the suit. It is, therefore, clarified that this judgment has to be construed accordingly so that the Courts below will be free to decide any question arising in the suit in accordance with the law, uninfluenced by this judgment.
18. Upshot of the foregoing is that the petitioner has succeeded in establishing a strong prima facie case for grant of interim injunctions prayed for by him and the balance of convenience is also in his favour. None of the contentions raised by the learned counsel for respondent in opposition hereof can hold water and they are accordingly repelled. Hence, this civil revision is accepted and the order dated 14‑11‑1983, passed by the learned Additional District Judge, Rawalpindi, is set aside to the extent that it has varied the trial Court's order dated 28‑7‑1983, which is hereby restored. The parties are, however, left to bear their own costs hereof.
M.B.A. Petition accepted.
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