2014 (8) TMI 1167 - HC - Indian Laws

Surrender /termination of the lease - whether mere writing of letters by a tenant to the landlord calling upon him to take the possession of the tenanted premises would tantamount to surrender /termination of the lease? - Held that - Vacant possession of the leased premises could be handed over to the lessor only after removal of its belongings by the lessee. Let us now examine what is the effect of three letters dated 22nd July 2008; 23rd August 2008 or 20th September 2008 written by the lessee to the lessor. None of these communications specifically state that the lease would stand terminated. The letters also do not state that the appellant had removed its installations and vacated the premises and therefore the lessor should visit the spot on any particular specified date or month to take over the vacant possession in accordance with the law in terms of Clause- 1 (d) of the said Lease. These letters thus do not contain a clear demand upon the lessor to take back the possession at a particular date and time. Thus the embedded installations of the LIC thus had not been removed prior to or even after sending the letter dated 22nd July 2008. They were still in place almost two years thereafter on the 6 th of March 2010 when the Local Commissioner visited the leased premises and the LIC sought time from the Local Commissioner for vacating the premises. Whether merely writing such communications absolve the tenant of the liability to pay rent for the period till such time the premises were actually handed over to the landlord? - Held that - Given the clear stipulation in the lease deed as well as the requirement under the Transfer of Property Act it was the responsibility of the tenant to invite the landlord on a date and time as to when it was going to hand over the vacant possession of the property. The tenant made no efforts to remove its fittings and fixtures and was not in a position to hand over the vacant and physical possession even on the visit of Local Commissioner on 6th March 2010. As such the landlord is within his rights to seek recovery of rent. Therefore it has to be held that the three letters written by the lessee though terminated the lease therefore did not express intention to hand over vacant and peaceful possession of the premises. These communications therefore do not absolve LIC from its liability to pay rent. The respondent s letter dated 22nd July 2008 could be deemed to be notice of termination of the lease but it certainly does not invite the plaintiff as to when the vacant possession should be taken in terms of Clause-1(d) of the Lease Deed dated 9th May 2008. The other two letters are of identical tenor and effect. In the instant case the lessee was bound by virtue of Clause-1 (d) of the Lease Deed dated 9th May 2008 to put the landlord in vacant possession of tenanted premises and the provisions of Section 108 (q) of Transfer of Property Act. The suit filed by the appellants-plaintiffs is decreed against the respondent-defendant directing it to pay the appellants/ plaintiffs rent @ 3, 18, 750/- per month w.e.f. 1st June 2008 till 15th April 2010 together with costs all throughout - Appeal allowed.

Summary

Issues Involved:
- Whether mere writing of letters by a tenant to the landlord calling upon him to take possession of the tenanted premises amounts to surrender/termination of the lease.
- Whether merely writing such communications absolves the tenant of the liability to pay rent until the premises are actually handed over to the landlord.
- The impact of third-party litigation on the lease.
- The obligations of the parties under the lease deed and the Transfer of Property Act regarding the handing over of possession.
- The direction to deposit the keys in court and its implications.
- Whether the tenant was obstructed from using the leased premises.
- The liability of the tenant to pay rent.

Detailed Analysis:

1. Termination of Lease by Letters:
The court examined whether the tenant's letters dated 22nd July 2008, 23rd August 2008, and 20th September 2008 constituted valid termination of the lease. It was held that these letters could be treated as notices terminating the lease on the part of the tenant. However, mere termination of the lease without handing over possession did not absolve the tenant from paying rent. The letters did not specify a date and time for the landlord to take back possession or indicate that the tenant had vacated the premises.

2. Liability to Pay Rent:
The court held that the tenant's liability to pay rent continued until the premises were actually handed over to the landlord. The tenant's letters did not constitute a clear demand for the landlord to take back possession. The tenant continued to occupy the premises and did not remove its installations, thereby failing to hand over vacant possession.

3. Third-Party Litigation:
The tenant cited litigation by a third party, Smt. Arvinder Kaur Sethi, as a reason for losing interest in the leased premises. The court found that this litigation did not impact the tenant's ability to use the premises. The tenant was estopped from challenging the landlord's title under Section 116 of the Evidence Act. The litigation did not provide a valid ground for terminating the lease without paying rent.

4. Obligations Under Lease Deed and Transfer of Property Act:
Under the lease deed and Section 108(q) of the Transfer of Property Act, the tenant was obligated to hand over vacant possession to the landlord upon termination of the lease. The tenant's failure to remove its belongings and vacate the premises meant it did not fulfill this obligation.

5. Direction to Deposit Keys in Court:
The court found that the direction to deposit the keys in court was unwarranted. This direction deprived the landlord of use and occupation of the premises without adjudicating the landlord's rights. The tenant should have handed over the keys directly to the landlord.

6. Obstruction from Using Leased Premises:
The court found no evidence that the tenant was obstructed from using the leased premises. The tenant's letters and legal notice did not mention any obstruction. The tenant's installations and continued possession indicated it was not prevented from using the premises.

7. Result:
The court set aside the judgment and decree dated 19th July 2010. The tenant was directed to pay the landlord rent at Rs. 3,18,750 per month from 1st June 2008 until 15th April 2010, along with costs and simple interest at 10% per annum from 15th April 2010 until realization. The appeal was allowed in these terms.