INDIAN OIL CORPORATION LTD. versus SUDERA REALTY PRIVATE LIMITED

Citation: [2022] 19 S.C.R. 462 · Decided: 06-09-2022 · Supreme Court of India · Bench: K.M. JOSEPH · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 19 S.C.R.
INDIAN OIL CORPORATION LTD.
v.
SUDERA REALTY PRIVATE LIMITED
[Civil Appeal No. 6199 of 2022]
SEPTEMBER 06, 2022
[K. M. JOSEPH AND PAMIDIGHANTAM SRI
NARASIMHA, JJ.]
Lease – Tenant at sufferance – Liability to pay mesne profits
– Held: A tenant continuing in possession after the expiry of the
lease may be treated as a tenant at sufferance, which status is a
shade higher than that of a mere trespasser, as in the case of a
tenant continuing after the expiry of the lease, his original entry
was lawful – But a tenant at sufferance is not a tenant by holding
over – While a tenant at sufferance cannot be forcibly dispossessed,
that does not detract from the possession of the erstwhile tenant
turning unlawful on the expiry of the lease – In the present case,
the appellant while continuing in possession after the expiry of the
lease became liable to pay mesne profits.
West Bengal Tenancy Act, 1956 – Whether there was a prior
determination of the lease of 21 years by the respondent-lessor, if
so, whether the appellant-lessee is entitled to protection of the
Tenancy Act – Held : No reason to disagree with the High Court
that the term of lease was 21 years from the date on which the three
floors in question were handed over – In regard to the 2nd and 3rd
floors, possession was handed over to the appellant on 16.09.1969
– As far as the 4th floor is concerned, the possession was handed
over only on 04.11.1970 – The lease agreement in 1968 along with
the supplementary agreement in 1969 did constitute a lease – In
this case it is no doubt true that there was pre-determination clause
which gave an option to the appellant to determine the lease after a
period of 8 years – From the evidence and the stand taken by the
appellant as emerging from the documents, it is clear that the
appellant continued for the full length of 21 years in terms of the
lease – Its possession was never ruffled – Appellant also filed a suit
– During the entire period after the execution of the deed in 1968
and the supplementary lease deed in 1969, till the period of 21
[2022] 19 S.C.R. 462
462
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years ran out, appellant never took up the case based on its right
under the West Bengal Premises Tenancy Act in view of the option it
had to determine the lease under Clause 9 – The presence of the
clause in question is not to be confused with the issue relating to
the effect of the notice dated 07.12.1977 purported to have been
sent to the respondent – Therefore, the appellant may not succeed
on the strength of the option it claimed under the agreement to lease.
Transfer of Property Act, 1882 – s. 106 – Was letter dated
19.10.1990, a notice u/s. 106 – Held : On the terms of the letter
dated 19.10.1990 it cannot be held that it amounted to termination
of the lease – There was a lease for a term of 21 years commencing
in the case of the 2nd and 3rd floors from 17.09.1969 – Therefore,
the period of 21 years had already run out by the time the letter
dated 19.10.1990 came to be issued – In other words, it was a case
of a lease qua the 2nd and 3rd floors which had expired by efflux of
time, in September, 1990.
Limitation Act, 1963 – Article 51 – Plea was that a suit of
mesne profits is governed by Article 51 of Limitation Act – Suit was
laid on 10.04.1995, it was contented that for the period beyond 3
years before the date of the suit, the suit would be barred – Held :
Landlord by the suit seeks to realise, what in law is described as
damages for unauthorised occupation by the tenant after the expiry
of the lease – It is not to be conflated to the profits received within
the meaning of Article 51 of the Limitation Act, as it involves finding
out the rate at which the landlord could have let out the premises –
It would be the residuary Article, namely, Article 113, which should
apply – Therefore, on facts it may not be possible to hold that the
suit filed by the respondent, should still be found to fall under Article
51 of the Limitation Act and barred as regards part of the cause of
action.
Dismissing the appeals, the Court
HELD: 1.1 Whether the documents styled as agreement
dated 21.11.1968 and the supplementary agreement for lease
dated 12th September, 1969 constituted a lease? The agreement
of lease dated 21.11.1968 on its own operated as a lease. It was a
demise and operated as such. Admittedly, it was a registered
document. Further, as correctly contended by the respondent,
INDIAN OIL CORPORAT

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