1

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal No. 3873 of 2019 (Arising out of SLP(C) No.32456 of 2018)

Sevoke Properties Ltd.                                                   Appellant

Versus

West Bengal State Electricity Distribution Company Ltd.                       Respondent

J U D G M E N T  

Dr Dhananjaya Y Chandrachud, J

1 Leave granted.

2 This appeal arises from a judgment and order of a Division Bench of the High

Court  at  Calcutta  dated  14  November  2018.  Allowing  the  first  appeal  filed  by  the

respondent  against  a  decree  for  possession,  the  Division  Bench  directed,  in

consequence, that the suit filed by the appellant shall stand dismissed.

3 The  subject  matter  of  the  dispute  is  a  plot  of  land  situated  at  Second  Mile,

Sevoke Road, Siliguri, West Bengal admeasuring 4 bighas, 18 Cottahs, 9 Chittacks and

18 sq.ft.  

2

4 On 22 March 1975, a deed of settlement was executed by Mohan Lal Khemka,

by which a private trust was created for the benefit of his grandson.  By the said deed,

Mahabir  Prasad  Bhartia  and  Sunita  Bhartia  were  appointed  as  trustees.  On  5

November 1979, a deed of settlement resulted in the creation of a private trust.  At this

stage,  it  would  be material  to  note that  the property  in  dispute  has by subsequent

devolutions vested in the appellant.   

5 On 25 May 1981, an indenture of lease was entered into between the appellant

and the respondent.  The term of the lease was fifteen years. Under the terms of the

lease, the respondent took possession of the land.  The rent was paid until 19 April

1984.  

6 The State  of  West  Bengal  initiated  proceedings  for  requisitioning  of  the  land

under the West Bengal Lands (Requisition and Acquisition) Act 1948. The appellant

challenged the validity of the requisitioning in a Writ Petition before the High Court. The

petition  was  allowed  by  a  judgment  dated  25  September  1998  and  the  order  of

requisitioning  was  set  aside.  The  judgment  of  the  Single  Judge was  questioned  in

appeal by the respondent. The appeal was dismissed on 16 November 2000.   

7 Eventually, a suit for eviction was instituted before the Court of the Civil Judge

(Senior Division), Jalpaiguri1.  The respondent filed its written statement. The learned

trial judge decreed the suit by a judgment and order dated 30 November 2005. The trial

court passed a decree for vacant and peaceful possession. A preliminary decree for

mesne profits was passed. The respondent filed an appeal before the High Court. By an

interim order dated 18 May 2006, the Division Bench of the High Court directed that

proceedings before the trial Court for ascertainment of mesne profits in terms of Order

1  Title Suit 63 of 2001

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XX Rule 12 of the Code of Civil Procedure 19082 shall continue, but no final decree

shall  be drawn up without the leave of the Court.   The execution proceedings were

stayed, subject to deposit of the arrears of rent.   

8 Following the order of the High Court, the valuer submitted a report in regard to

the valuation of the property. The trial Court accepted the valuation on 7 September

2016. The order of the trial court was challenged by the respondent before the High

Court3. The petition was dismissed on 1 May 2018 by a learned Single Judge.   

9 By a judgment and order dated 14 November 2018, the High Court has set aside

the decree for possession and, in consequence, directed that the suit instituted by the

respondent shall stand dismissed. The High Court has held that:

(i) A lease of immovable property for a term exceeding one year can only be

made by a registered instrument;

(ii) Since the indenture of lease was unregistered, it was governed by the first

paragraph of Section 107 of the Transfer of Property Act 18824;

(iii) The relationship between the parties would, in consequence, be governed by

the second paragraph of Section 107;

(iv) The  tenancy  shall,  therefore,  be  deemed  to  be  from  month  to  month

terminable by fifteen days’ notice under Section 106; and

(v) In the absence of a notice under Section 106 determining the relationship of

lessor and lessee between the parties, the suit was not maintainable.

10 Mr C A Sundaram, learned senior counsel appearing on behalf of the appellant

urged three submissions:

2 “CPC” 3 CO 456 of 2017  4  “TP Act”

4

(i) The purpose of a notice under Section 106 is relatable to the necessity of

effecting termination of the lease. No specific form is provided by the TP Act.

The purpose of  the notice is  to  furnish an intimation to  the tenant  of  the

termination of the lease and to provide a period of fifteen days to quit and

vacate the premises.  The substantive purpose of such a notice is in effect

fulfilled in the form of the suit for possession, so long as an eviction follows

beyond a period of fifteen days.  In that event, the requirement of Section 106

stands satisfied;

(ii) Since the indenture of lease is an unregistered document, as a consequence

of the provisions of Sections 35 and 36 of the Indian Stamp Act 1899 and

Sections  17  and  49  of  the  Registration  Act  1908,  the  contents  of  the

document are inadmissible in evidence to prove the terms of the contract.  As

a  consequence,  the  presumption  under  Section  106  would  come  into

operation and the relationship between the parties would be in the nature of a

monthly  tenancy.  The  respondent  in  its  written  statement  categorically

admitted that it was in occupation for a period of fifteen years which ended on

24 May 1996.  Once this is the position, the position of the respondent would

be as a tenant at sufferance, in which event, no notice under Section 106 was

necessary; and

(iii) After  the respondent  entered  upon the property  on 25  May  1981,  it  was

requisitioned by the State Government in pursuance of a request made by

the respondent.  The respondent stopped paying the rent after 1984.  After

the Writ Petition was allowed by the learned Single Judge and the order of

requisitioning  was  quashed,  the  respondent  filed  an  appeal  before  the

Division Bench.  In this view of the matter, the respondent must be treated to

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have elected or opted out of the lease.

11 On the other hand, Mr Yasobant Das, learned senior counsel appearing on behalf

of the respondent, urged that:

(i) Since the document of lease has not been registered, the contents of the

lease cannot be looked into for any purpose whatsoever.

(ii) The status of the respondent would be of a monthly tenant;

(iii) Consequently, a notice of termination under Section 106 was mandatory; and

(iv) The failure of the appellant to issue a notice of termination under Section 106

was fatal to the maintainability of the suit.  In this regard, reliance was placed

on a decision of a two judge Bench of this Court in Satish Chand Makhan v

Govardhan Das Byas5.

12 Section 107 of the TP Act reads thus:

“107.  Leases  how  made.—A  lease  of  immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

Where a lease of  immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:

Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument  or  by oral agreement without delivery of possession.”

5(1984) 1 SCC 369

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13 In terms of the provisions of Section 107, a lease of immovable property for a

term exceeding one year can only be made by a registered instrument.  Admittedly, in

the present case, the indenture of lease has not been registered.  In consequence, the

contents  of  the  indenture  would  be  inadmissible  in  evidence  for  the  purpose  of

determining  the  terms  of  the  contract  between  the  parties.  This  is  the  plain

consequence of the provisions of Sections 17 and 49 of the Registration Act 19086.

The only purpose for which the lease can be looked at is for assessing the nature and

character of the possession of the respondent.

14 The essence of the dispute in  the present  case is  as to whether  a notice of

termination under Section 106 was necessary.  In the judgment of this Court in  Satish

6                                                                                                                                                                              17.  Documents of  which registration is compulsory.—(1)  The following documents shall  be registered,  if  the

property to which they relate is situate in a district in which, and if they have been examined on or after the date on which, Act XVI of 1864, or the Indian Registration Act, 1866 (20 of 1866), or the Indian Registration Act, 1871 (8 of 1871), or the Indian Registration Act, 1877 (3 of 1877), or this Act came or comes into force, namely—

(a) instruments of gift of immovable property;

(b)  other  non-testamentary  instruments  which  purport  or  operate  to  create,  declare,  assign,  limit  or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;

(c)  non-testamentary  instruments  which  acknowledge  the  receipt  or  payment  of  any  consideration  on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and

(d) lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

(e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property:

49. Effect of non-registration of documents required to be registered.—No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall—

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power,

unless it has been registered:

Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property  Act,  1882 (4  of  1882),  to  be  registered  may  be  received  as  evidence  of  a  contract  in  a  suit  for  specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument.

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Chand  Makhan  (supra), the  father  of  the  plaintiff  had  leased  open  land  to  the

defendant for a period of five years under a registered deed of lease.  After the expiry of

the initial  term, there was a draft agreement for renewal for a further period of nine

years, which, however, was not registered under Section 17(1)(d) of the Registration

Act 1908.  The plaintiff  served a notice for the determination of the tenancy on the

ground of forfeiture under Section 111(g) and brought a suit for ejectment. The High

Court held that the lease had been determined by efflux of time under Section 111(a)

upon the expiry of the term of nine years and hence, no notice under Section 106 was

required for the determination of the lease.  While determining the correctness of the

judgment of the High Court, this Court observed that “the defendants have nowhere

admitted that the lease was for a specific term of nine years”.  On the contrary, the

defendants had pleaded that they were tenants holding over under Section 116 of the

TP Act.  This Court held that the unregistered draft lease agreement was inadmissible in

evidence under Section 49 of the Registration Act except for a collateral purpose of

proving the nature and character of the possession of the defendants. The terms of the

lease did not constitute a collateral purpose. Consequently, the unregistered draft lease

was held to be inadmissible to create a valid lease for a renewed term of nine years.  In

this background, this Court held that the defendants were tenants holding over under

Section 116 in which event it was necessary for the plaintiff to serve a notice under

Section 106.   In the absence of  such a notice,  the suit,  it  was held,  would not  be

maintainable.

15 Mr Sundaram has sought to distinguish this decision, since in that case this Court

found that the defendant was a tenant holding over within the meaning of Section 116.

We find merit in the submission which has been urged by Mr Sundaram.  In the case

before this Court noted above, the defendants had not admitted that the term of the

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lease was for a period of nine years. This was noted by the Court, as we have extracted

earlier.  On the contrary, we find that in the present case, there is an express admission

on the part of the defendants that they were in occupation under the lease agreement

for a period of fifteen years with effect from 1981 and that the period of lease expired on

24 May 1996.  Such a specific admission on the part of the defendants is contained in

paragraph 22 of the written statement.  Under Section 111(a), a lease of immovable

property determines by efflux of time limited thereby.  Once this be the position, there

can be no manner of doubt that the position of the respondent on the expiration of the

lease was of a tenant at sufferance.  In the circumstances, there was no necessity of a

notice  for  the  termination  of  the  lease  under  the  provisions  of  Section  106.   The

respondent having squarely admitted in its written statement that it was in occupation

for a term of fifteen years, that term having expired, the lease stood determined by

efflux  of  time.  Once  the  lease  stood  determined  by  efflux  of  time,  there  was  no

necessity for a notice of termination under Section 106.   

16 In coming to this conclusion, we are fortified by the decision of this Court in R V

Bhupal Prasad v State of A P7, where this Court held:

“8.Tenant  at  sufferance  is  one  who  comes  into possession of land by lawful title, but who holds it by wrong after the termination of the term or expiry of the lease by efflux  of  time.  The tenant  at  sufferance is, therefore, one who wrongfully continues in possession after  the  extinction  of  a  lawful  title.  There  is  little difference between him and a trespasser.  In  Mulla's Transfer of Property Act (7th Edn.) at page 633, the position of tenancy at sufferance has been stated thus: A tenancy at  sufferance is  merely  a  fiction  to  avoid continuance in possession operating as a trespass. It has been described as the least and lowest  interest which  can subsist  in  reality.  It,  therefore,  cannot  be created by contract and arises only by implication of law when a person who has been in possession under a lawful title continues in possession after that title has

7 (1995) 5 SCC 698

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been determined,  without  the consent of  the person entitled. A tenancy at sufferance does not create the relationship of landlord and tenant. At page 769, it is stated regarding the right of a tenant holding over thus: The act of holding over after the expiration of the term does not necessarily create a tenancy of any kind. If the  lessee  remains  in  possession  after  the determination of the term, the common law rule is that he is a tenant on sufferance. The expression “holding over” is used in the sense of retaining possession...””

In  Park Street Properties Private Limited  v  Dipak Kumar Singh8, the appellant to

whom premises had been let out with a right to sub-let them entered into a sub-tenancy

in favour of the respondent. The agreement by which the sub-tenancy was created was

unregistered. The appellant issued a notice under Section 106 of the TP Act terminating

the monthly sub-tenancy and then instituted a suit for recovery of possession. The trial

court held that since the sub-lease was unregistered, it was inadmissible in evidence

and none of its terms, including clause 6 which empowered the landlord to serve a

notice upon default in the payment of rent could be looked into. Hence the notice under

Section 106 was held to be valid. The High Court allowed the appeal and remanded the

proceedings to the trial court. In appeal, this Court held that clause 6 of the agreement

was contrary to Section 106. While Section 106 contains the phrase “in the absence of

a contract to the contrary”, this must refer to a valid contract.  This Court held that in the

absence of a registered agreement, the court is not precluded from determining the

factum of tenancy from other evidence on the record including the conduct of parties.

However, in the absence of registration, Section 106 created a fiction of tenancy from

month to month, the termination of which was governed by Section 106. Consequently,

the judgment of the High Court was set aside and the judgment of the trial court was

restored. The above judgment is clearly distinguishable. Since the agreement of sub-

8 (2016) 9 SCC 268

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lease in  Park Street Properties (supra) was unregistered, clause 6 which governed

the sub-lease could not be looked into. In the present case, the indenture of lease being

unregistered, the contents of the instrument are inadmissible in evidence. However, it is

evident from the clear admission in the written statement that the appellant accepted

and  proceeded  on  the  basis  that  the  period  of  lease  expired  on  24  May  1996.

Thereafter, the position of the appellant is of a tenant at sufferance.               

In Nopany Investments (P) Ltd v Santokh Singh (HUF)9, a two judge Bench of this

Court has held :  

“22…In any view of the matter, it is well settled that filing of an eviction suit under the general law itself is a notice to quit on the tenant. Therefore, we have no hesitation to  hold  that  no  notice  to  quit  was  necessary  under Section 106 of the Transfer of Property Act in order to enable  the  respondent  to  get  a  decree  of  eviction against the appellant.”   

17 For the above reasons, we have come to the conclusion that the judgment of the

High Court was in error.   

18 We accordingly allow the appeal and set aside the impugned judgment and order

of the High Court and restore the judgment of the trial court dated 30 November 2005.

In view of the pendency of the proceedings before this Court and having due regard to

the interim order that was passed by the High Court during the pendency of the appeal,

the respondent should be given the liberty of assailing the judgment dated 1 May 2018

of the learned Single Judge of the High Court accepting the report of the Commissioner

in regard to the determination of mesne profits.  We grant a period of three months to

the respondent to initiate appropriate proceedings in accordance with law for assailing

the judgment of the learned Single Judge dated 1 May 2018.

9 (2008) 2 SCC 728

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19 Mr  Yasobant  Das  requested  for  the  grant  of  a  year  to  vacate  since  the

respondent has a store in the land and arrangements for shifting have to be made.  We

direct that the respondent shall have one year's time to vacate the suit premises from

the date of the judgment, subject to the filing of the usual undertaking within four weeks

from today.  We have granted one year's time since the Court was apprised of the fact

that a store which provides services to the entire North Bengal area is situated on the

land.

20 The bank guarantee furnished by the appellant as a condition for withdrawal of

the occupation charges deposited by the respondent shall stand discharged.  However,

the  amount  which  has  been  withdrawn  by  the  appellant  shall  abide  by  the  final

determination of mesne profits.   

21 There shall be no order as to costs.    

…….……….....................................................J.      [DR DHANANJAYA Y CHANDRACHUD]

…………........................................................J.                           [HEMANT GUPTA]

NEW DELHI APRIL 11, 2019