BHUNESHWAR PRASAD AND ANR. versus UNITED COMMERCIAL BANK AND ORS.

Citation: [2000] SUPP. 2 S.C.R. 635 · Decided: 25-08-2000 · Supreme Court of India · Bench: S.S.M. QUADRI · Disposal: Dismissed

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Judgment (excerpt)

BHUNESHWAR PRASAD AND ANR. 
A 
v. 
UNITED COMMERCIAL BANK AND ORS. 
AUGUST 25, 2000 
[SYED Sl-IAH MOHAMMED QUADRI AND Y.K. SABHARWAL, JJ.] 
B 
Rent Control and Eviction : 
Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982-Section 
11-Lease of suit-premises-Expiry of lease period-Request for renewal of 
lease rejected-Notice to tenant to vacate premises-Payment of enhanced rent 
by tenant after expiry of lease period at the direction of landlord-Claim of 
monthly tenancy-Validity of-Held, there is no monthly tenancy unless there is 
an agreement, express or implied-However, in view of the facts and circum-
stances of the case, there is an implied agreement-Transfer of Property Act, 
1882-Section IJ 6. 
1 
Appellants gave suit-premises to Respondent-Bank on lease. The 
lease was renewed from time to time for a period of 5 years by the 
appellants on respondent's request. The respondent did not exercise option 
for renewing the lease as per the lease agreement before the end of the 
lease period in March. Therefore, after the lease period, the appellants 
communicated to the respondent to vacate the premises. On receiving the 
communication, the respondent requested the appellants for renewal of 
lease which was rejected. The respondent continued to deposit the rent in 
the account of the appellants. The appellants filed an eviction petition 
before Trial Court under section 11(1) of Bihar Buildings (Lease, Rent and 
Eviction) Control Act, 1982, which was decreed in favour of the appellants. 
In appeal by the respondent, High Court set aside the decree and judgment 
of the Trial Court. 
In appeal to this Court, the appellants contended that the respondent 
deposited the rent without consent; and that the deposit and acceptance of 
rent does not create monthly tenancy under Section 116 of the Transfer of 
Property Act, 1882. 
Respondent, on the other hand, contended that after the lease pe-
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riod, it deposited enhanced rent on the direction of the appellants, which 
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SUPREME COURT REPORTS 
(2000] SUPP. 2 S.C.R. 
A 
was withdrawn; and that the lease is renewed from month to month. 
Dismissing the appeal, the Court 
HELD : 1.1. To bring a new tenancy into existence within the mean-
ing of the Section 116 of the Transfer of Property Act, 1882 there should be 
B 
an agreement. The section contemplates that on one side, there should be 
an offer of taking a fresh demise evidenced by lessee's continuing occupa-
tion of the property after the expiry of the lease and on the other side, there 
must be a definite assent to this continuance of possession by the lessor/ 
landlord and that such an assent of the landlord cannot be assumed in 
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cases of tenancies to which Rent Restriction Acts apply on account of the 
immunity from eviction which a tenant enjoys even after the expiry of 
lease. In such cases, the landlord cannot eject him execpt on specified 
grounds mentioned in the Rent Restriction Acts and thus the acceptance of 
rent by the landlord from a statutory tenant, whose lease has already 
expired, would not be taken as evidence of new agreement of tenancy and 
it would not be open to such a tenant to urge that by acceptance of rent, a 
fresh tenancy was created. A lessor is not expected notto accept the rent 
when, in view of the protection granted by the Rent Restriction laws, 
without existence of one or the other ground, he is precluded from seeking 
eviction of the lessee and in such a case, there would be no question of 
creation of tenancy from month to month. Under these circumstances, 
mere acceptance of amount equivalent to rent or the standard rent would 
not attract Section 116 of the Act. Assent to lessee continuing in possession 
would be absent in such cases. However, an agreement creating fresh 
tenancy within the meaning of Section 116 can be implied from the conduct 
of the parties. The whole basis of Section 116 of the Act is that a landlord is 
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entitled to file a suit for ejectment and obtain a decree for possession and, 
therefore, his acceptance of rent after expiry of lease is an unequivocal act 
referable to his desire to assent to the tenant continuing possession. It 
would be absent in cases where there are restrictions as contemplated by 
Rent laws. In such cases, therefore, it is for the tenant to establish, where it 
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is said that the landlord accepted the rent not as a statutory tenant but 
only as a legal tenant, indicating his assent to tenan

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