SHANTI PRASAD DEVI AND ANR. versus SHANKAR MAHTO AND ORS.

Citation: [2005] SUPP. 1 S.C.R. 418 · Decided: 11-07-2005 · Supreme Court of India · Bench: D.M. DHARMADHIKARI · Disposal: Dismissed
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Judgment (excerpt)

_A 
SHANTI PRASAD DEVI AND ANR. 
' 
v. 
-sHANKAR MAHTO AND ORS. 
JULY 11, 2005 
B 
[D.M. DHARMADHIKARI AND B.N. SRIKRISHNA, JJ.] 
Transfer of Property Act, 1882: 
s. J 16-'Holding over '-Lease deed-Renewal of-After expiry of lease, 
C lessee continuing in possession-Lessor accepting rent/or subsequent months-
On notice by lessee to renew lease, lessor filing suit for ejectment-Held, 
under renewal clauses of the lease _agreement, option to seek renewal was to 
be exercised before expiry of lease and on specified conditions-Renewal 
clearly fell within the expression '"agreement to the contrary" occurring in 
· D s. I 16-There could be no implied renewal by 'holding over' on mere acceptance 
of rent-Option of renewal was no! exercised in accordance with terms of 
renewal clauses-Decree of ejectment upheld. 
Specific Relief Act, 1963: 
E 
Suit for ejectment-Cross suit for specific performance of agreement/or 
renewal of lease-Held, option for renewal having been exercised after expiry 
of lease period and renelial clauses being vague and incapable of specific 
performance, suit rightly dismissed by courts below. 
Appellant was running a Petrol Pump on the suit property on a 
F monthly rent under a registered lease deed with a renewal clause 
stipulating that option would be exercised before expiry of the lease and 
the terms and conditions of the renewal would be decided either by mutual 
consent of parties or, on its failure, through local Mukhia/Panchas of the 
village. The appellant, after expiry of the period of lease, remitted rent 
for few months and also sent a notice to the lessor seeking renewal of the 
G lease. The lessor accepted the rent, but tiled a suit for ejectment contending 
that term of lease had expired. The lessee also filed a suit for specific 
performance of the agreement of renewal of the lease. The trial court 
dismissed the suit for ejectment holding that after expiry of initial period 
of the lease, acceptance of rent by the lessor resulted in renewal of lease 
II 
418 
) 
__, 
I 
SHANTI PRASAD DEVI v. SHANKAR MAHTO 
419 
- and lessee was 'holding over' within the meaning ofs.116 of the Transfer of A 
Property Act, 1882, and the suit could not have been filed without terminating 
the lease by notice u/s 106 of the Act. The suit for specific performance was 
also dismissed. The first appellate eourt, while maintaining dismissal of the 
suit for specific performance, decreed the suit for ejectment The High Court 
dismissed the second appeals of the lessee, who filed the present appeals. 
Dismissing the appeals, the Court 
B 
H_ELD: 1. The High Court and the first appellate court below rightly 
held that on expiry of period of lease, mere acceptance of rent for the 
subsequent months in which the lessee continued to occupy the leased premises 
cannot be said to be a conduct signifying 'assent' to the continuance of the C 
lessee even after expiry of lease period. Under the renewal clauses option to 
seek renewal was to be exercised before expiry of the lease and on specified 
conditions. The renewal clauses (7) and (9) in the agreement of lease clearly 
fell within the expression 'agreement to the contrary' used in s.116 of the 
Transfer of Property Act, 1882. In the face of specific clauses for seeking D 
renewal there could be no implied renewal by 'holding over' on mere 
acceptance of the rent offered by the lessee. Option of renewal was exercised 
not in accordance with the terms of renewal clause, that is, befw:e..the-.expiry 
of lease. The rent offered was accepted by the lessor for the period the lessee 
overstayed on the leased premises. The lessee, in these circumstances, could 
not claim that he was 'holding over' as a lessee within the meaning of s.116 E 
of the Transfer of Property Act. [423-C, E] 
2. The cross-suit for specific performance of agreement of renewal of 
lease filed by the lessee was rightly dismissed throughout. There are 
concurrent findings of all the courts that the option for renewal was exercised 
after the expiry of the lease period. The option for renewal exercised was, F 
therefore, contrary to terms of renewal clauses of the lease agreement. After 
legal notice of renewal, the lessor did not send any positive reply and instead 
filed a suit for ejectment, therefore, there was no mutual consent for renewal. 
The renewal clauses were vague and incapable of specific performance. 
(424-B~D] G 
Bhawanji Lakhamshi v. Himatlal Jamnadas Dani, (1972)1 SCC 388 and 
Kai
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