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TMI Blog2003 (11) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... without any reservation, all the covenants, provisos and stipulations as contained in the principal lease as if they had been herein repeated in full. Not only was a fresh deed of lease executed but the conduct of the parties also shows that at the end of the term appointed by the 1945 lease, i.e. in or around the year 1987, the lessor did not exercise its right of re-entry. On the other hand, the respondent exercised his option for renewal. The officials of the appellant State, i.e. the Collector and the Board of Revenue, all recommended renewal and advised the State Government to expedite the renewal. The State Government was generally renewing such like leases by issuing general orders/instructions to its officers. At no point of time prior to the filing of the counter-affidavit, on the present litigation having been initiated, the State or any of its officers took a stand that the right of renewal, as contained in the principal deed of lease, having been exhausted by exercise of one option for renewal, was not available to be exercised again. Now that the covenant for renewal has been referentially incorporated without any reservation in the lease deed of 1945 the exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J. The property in question is plot no.81/1-M area 5 acres (out of 98 bighas) in village Nasibpur, Bhaktiara, Chhail, District Allahabad, U.P. over which stands a bungalow bearing no. 241 Mor Road, Alllahabad. This property shall hereinafter be referred to as 'the suit property'. The ownership of the land vests in the State. The super- structure which is a bungalow seems to have been brought up by the lessee or his transferee, as stated hereinafter, and which is not very clearly borne out from the pleadings, also not very relevant for the issue at hand. The land consisting in the suit property was given on fifty years lease to one J.W.Walsh. The lease contained a clause for renewal which, as far as ascertainable from the material available on record, and as found by the High Court, conferred an option on the lessee to seek renewal of lease for another term of 50 years and on such option being exercised before the expiry of term of 50 years of the existing lease, the lessor shall "act upon forthwith and execute and deliver to the lessee upon his duly executing a counter part or renew the lease for the said premises for a further term of 50 years and with and subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lease for a term of 50 years but by Febraury 20, 1945, the day on which the renewed lease came to be executed, a period of 42 years, 2 months and 20 days had remained available out of the 50 years of the second term and therefore the term of the renewed lease as recited therein is "42 years, 2 months, 20 days". This lease has been placed on record. Covenant - 2 thereof is very crucial and the same is extracted and reproduced hereunder: "It is hereby mutually convenanted and agreed by and between the lessor and the lessee that the obligations hereunder shall continue throughout the term hereby created and shall be binding on their respective successors-in-interest in the demised premises that they will perform and observe the several convenants provisos and stipulations in the aforesaid lease expressed as fully as if the same convenants provisos and stipulations had been herein repeated in full with such modifications only as are necessary to make them applicable to this demise and as if the name of the parties hereto had been substituted for those in the aforesaid lease provided always that the building referred to in the aforesaid lease having been erected th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffidavit filed on behalf of the State Government it was pleaded that the original lease was for a period of 50 years, renewable only once for a further term of 50 years, which right of renewal was exhausted on having been exercised once culminating into the execution of lease deed dated February 20, 1945. On the expiry of the term limited by the latter lease deed the respondent did not have any further right of renewal. Another supplementary counter-affidavit sworn in by Shri Bira Ram, Naib Tahsildar was filed wherein an additional plea was raised that on 28.3.1987 the State of U.P. had issued a notification under Section 4 of the Land Acquisition Act, 1894 followed by declaration under Section 6 dated 31.12.1987 whereby the land was acquired by the State and therefore the renewal of lease was not legally possible. A third counter-affidavit sworn in by one Lateefullah was filed on April 1, 1991 raising yet another plea that the respondent was negotiating the sale of the leased land without prior sanction of the State Government which was in violation of the terms of the lease deed and so also the respondent was not entitled for any further renewal. In the decision dated 19.4.198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first renewal evidenced by the lease deed dated February 20, 1945 shall be deemed to have renewed all other covenants incorporating the rights and obligations between the lessor and the lessee excepting the clause for renewal; else it would result in creating a lease in perpetuity because every renewed lease shall have to incorporate the clause for renewal for 50 years as contained in the original lease deed which would mean endless renewals and hence a lease in perpetuity. We find it difficult to agree with Shri Markandeya in the facts and circumstances of this case. In India, a lease may be in perpetuity. Neither the Transfer of Property Act nor the general law abhors a lease in perpetuity. (Mulla on The Transfer of Property Act, Ninth Edition, 1999, p.1011). Where a covenant for renewal exists, its exercise is, of course, a unilateral act of the lessee, and the consent of the lessor is unnecessary. (Baker v. Merckel (1960) 1 All ER 668, also Mulla, ibid, p.1204). Where the principal lease executed between the parties containing a covenant for renewal, is renewed in accordance with the said covenant, whether the renewed lease shall also contain similar clause for renewal de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d construed properly and in its real context, entitles the tenant to continue as long as he chooses by exercising the option of renewal at the end of each successive period of 5 years subject to the same terms and conditions depends on the deed of lease being read as a whole and an effort made to ascertain the intention of the parties while entering into the contract. No single clause or term should be read in isolation so as to defeat other clauses. The interpretation must be reasonable, harmonious and be deduced from the language of the document; (iii) The Court always leans against a perpetual renewal and hence where there is a clause for renewal subject to the same terms and conditions, it would be construed as giving a right to renewal for the same period as the period of the original lease, but not a right to second or third renewal and so on unless, of course, the language is clear and unambiguous. Another illuminating decision on the point is by Sir Ashutosh Mookerjee, J., speaking for the Division Bench of Calcutta High Court in Secretary of State for India in Council Vs. A.H. Forbes, (1912) 17 IC 180. The Division Bench on a review of several English decisions held:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion "of continuing the tenancy for a further period of six months on the same terms and conditions including this clause." To my mind, what that means is this : the tenant is to be allowed once, and once only, the opportunity of continuing the tenancy ____ continuing it for a further six months.Then we come to the critical words "on the same terms and condition including this clause." As I read it, that means there is included in the new tenancy agreement a right in the tenant, if he thinks fit, to go on for one further six months, and when you have got to that stage you have finished with the whole matter. In other words, it comes to this : "Here is your present lease. You may continue that, but I tell you, if you continue it, you continue it on the same terms as you were granted the original lease. You may continue it for a further 6 months with the right to go on for another 6 months." Upon that footing, in the events which have happened, all the landlord was bound to do under this arrangement was to permit the tenant to occupy for a period not exceeding 18 months in the whole from the time when the original lease was granted." We find ourse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the land having been acquired there could be no renewal of lease has been termed by the High Court as 'ridiculous' and we find no reason to take a different view. Suffice it to refer to a recent decision of this Court in Sharda Devi Vs. State of Bihar, (2003) 3 SCC 128 wherein it has been held that the Land Acquisition Act, 1894 cannot be invoked by the Government to acquire its own property. It would be an absurdity to comprehend the provisions of the Land Acquisition Act being applicable to such land wherein the ownership or the entirety of rights already vests in the State. The notification and declaration under Sections 4 and 6 of the Land Acquisition Act for acquisition of the land i.e. the site below the bungalow are meaningless. It would have been different if the State would have proposed the acquisition of leasehold rights and/or the superstructure standing thereon, as the case may be. But that has not been done. The renewal of lease cannot be denied in the garb of so called acquisition notification and declaration which have to be just ignored. Lastly, it was submitted that the respondent is in breach of the terms of the lease and hence not entitled to renew ..... 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