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Issues Involved:
1. Validity of the lease agreement. 2. Right to renewal of the lease. 3. Impact of the Mysore Rent Control Acts. 4. Entitlement to specific performance. 5. Doctrine of frustration. 6. Entitlement to possession and mesne profits. 7. Calculation of the lease period. 8. Relief and costs. Detailed Analysis: 1. Validity of the Lease Agreement The lease agreement dated September 2, 1946, was a "demise in presenti," meaning it was an agreement of lease and not merely an agreement to lease. This distinction was crucial as it granted the appellant an immediate interest in the property, entitling him to sue for possession. 2. Right to Renewal of the Lease The original lease to respondent 2 included an option to renew for another five years, subject to mutually agreed terms. However, respondent 1 refused to renew the lease, leading to a legal dispute. Respondent 1's refusal was based on alleged misbehavior and non-payment of rent by respondent 2. 3. Impact of the Mysore Rent Control Acts The Mysore House Rent and Accommodation Control Order, 1948, and the subsequent Mysore Rent Control Acts affected the legal proceedings. Initially, these laws posed impediments to eviction and specific performance. However, the Mysore Rent Control Act, 1961, excluded buildings with monthly rents exceeding Rs. 500, removing these impediments and allowing the court to grant relief. 4. Entitlement to Specific Performance The court found that the suit for specific performance was misconceived because the appellant already had a vested interest in the property due to the "demise in presenti." The proper relief was to sue for possession, which the appellant had done. 5. Doctrine of Frustration The High Court applied the doctrine of frustration, stating that changes in rent control laws made it impossible for respondent 1 to evict respondent 2 within a reasonable time. This was deemed incorrect because the lease was a "demise in presenti," not an executory contract. Therefore, the doctrine of frustration was inapplicable. 6. Entitlement to Possession and Mesne Profits The appellant was entitled to possession and mesne profits because respondent 2 continued in possession with full notice of the lease in favor of the appellant. The court noted that respondent 1's conduct in entering a fresh lease with respondent 2 and filing a compromise was not bona fide. 7. Calculation of the Lease Period The lease period was to commence from the date of possession, not the date of execution. Clause 2 of the lease stated that rent would be payable from the date possession was delivered to the tenant. Clause 4 provided for a 10-year lease with an option to extend for another 5 years, starting from the date possession was obtained. 8. Relief and Costs The appeal was allowed, and the judgments of the Trial Court and the first appellate court were reversed. The appellant was to be put in possession under the terms of Exhibit D upon payment of Rs. 18,000 to respondent 1. The appellant was also awarded costs in the Supreme Court from the respondents. Conclusion The Supreme Court granted the appellant possession of the property under the lease terms, reversing the lower courts' judgments. The appellant was entitled to possession and mesne profits, and the doctrine of frustration was deemed inapplicable. The court also awarded costs to the appellant.
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