Law Commission 181st Report suggested amendment to the Section 106 of Transfer of property Act,1882. While Submitting Report in May,2002 Law Commission observed that, “ The recommendations have been made with a view to remove serious injustice and prevent multiplicity of litigation in the country. We hope that the recommendations in this Report will go a long way in attaining the objectives set out above. We are also recommending that the proposed amendments be applied to pending proceedings.”

“Ever since 1882, certain words in sec. 106 of the Transfer of Property Act, 1882, have given rise to a lot of litigation. An amendment of sec. 106 is long overdue. The purpose of the present Report is to eliminate this litigation in so far as it relates to computation of period of notice and to relax some of the rigid principles laid down in some judgments which have led to serious injustice and multiplicity of litigation. In fact, in the State of UP, by virtue of a State Amendment under the UP Act 24 of 1954, this section was amended long back. A similar amendment in the Principal Act has to be made so as to remove the hardship caused to litigants in the rest of the country.”

Amended Section 106 in The Transfer of Property Act, 1882 reads as under:

106. Duration of certain leases in absence of written contract or local usage.—

(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice.

(2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice.

(3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section.

(4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property

Question arose when Plaint who filed RAD Suit for protection of tenancy rights dies what are rights and status of his legal heirs under the law? Do they have inheritance of tenancy ?

Judgments Prior to Amendment : Validity of Notice

United Dairies Ltd. v. Public Trustees. ((1923) 1 KB 469) on the remarks of Greer, J. to the effect that “each of the tenants have a share of every part of the estate and it would be true to say that there was a privity of estate between him and the landlord in the whole of the leased property, and therefore each was liable to perform the covenant contained in the lease in its entirety. If that be the true position with respect to totality of the rights under the leasehold and there is unity of enjoyment and possession in respect of leasehold property vis-a-vis the landlord, it is difficult to see why notice to one of these joint tenants could not be considered as a valid notice to all provided such a notice was given.”

The Bombay High Court in Mst. Ramubai v. Jairam Sharma (AIR 1964 Bom 96). Although it is stated therein that on the death of a lessee the heirs inherited not as tenants-in-common but as joint tenants and, therefore, notice to one was good notice to terminate the entire tenancy, the facts of the case indicate that it was a notice given to all though it was served on one. It purported to terminate the entire tenancy of all the co-tenants. Such a notice can certainly not be held to be invalid.

Ramesh Chand Bose vs Gopeshwar Pd. Sharma Allahabad  High Court held that , “ In the present case the lease was granted to an individual. It was inherited by the present defendants and others and accordingly all of them became tenants-in-common in the leasehold rights with independent shares in title. Though they have unity of possession, there is no unity of title. The tenancy could, therefore, have been terminated only by the termination of the entire tenancy rights held by the various persons. As the notice never purported to terminate the tenancy of all the owners of the tenancy rights it cannot be held to have validly terminated the tenancy under Section 111 read with Section 106 of the Transfer of Property Act.”

In H.C. Pandey vs G.C. Paul on 28 April, 1989 Supreme Court said that,

It is now well settled that on the death of the original tenant, subject to any provision to the contrary either negating or limiting the succession, the tenancy rights devolve on the heirs of the deceased tenant. The incidence of the tenancy are the same as those enjoyed by the original tenant. It is a single tenancy which devolves on the heirs. There is no division of the premises or of the rent payable therefor. That is the position as between the landlord and the heirs of the deceased tenant. In other words, the heirs succeed to the tenancy as joint tenants.

Supreme Court on Inheritance of Tenancy:

Damadilal And Others vs Parashram And Others on 7 May, 1976 tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or properly in the subject matter of the tenancy, and heritability is an incident of the tenancy. It cannot be assumed, however, that with the determination of the tenancy the estate must necessarily disappear and the statute can only preserve his status of irremovability and not the estate he had in the premises in his occupation. It is not possible to claim that the “sanctity” of contract cannot be touched by legislation.

Dhanapal Chettiar vs Yesodai Ammal on 23 August, 1979 seven Judges Bench does not make any distinction between contractual tenant and statutory tenant. “It does not permit the landlord to snap his relationship with the tenant merely by his act of serving a notice to quit on him. Inspite of the notice, the law says that he continues to be a tenant and he does so enjoying all the rights of a lessee and is at the same time deemed to be under all the liabilities such as payment of rent etc. in accordance with the law.”

In Smt. Gian Devi Anand vs Jeeevan Kumar and Others five Judges Bench held that a contractual tenant has an estate or interest in the premises which is heritable, it is difficult to understand why a statutory tenant should be held not to have such heritable estate or interest. In one case, the estate or interest is the result of contract while in the other it is the result of statute. But the quality of the estate or interest is the same in both cases. The difficulty in recognising that a statutory tenant can have estate or interest in the premises arises from the fact that throughout the last century and the first half of the present, almost until recent times, our thinking has been dominated by two major legal principles, namely, freedom of contract and sanctity of private property and therefore we are unable to readily accept that legal relationships can be created by statute despite want of contractual concensus and in derogation of property rights of the landlord. We are unfortunately not yet reconciled to the idea that the law is moving forward from contract to status. Why can estate or interest in property not be created by statute ? When the rent control legislation places a statutory tenant on the same footing as a contractual tenant, wipes out the distinction between the two and invests a statutory tenant with the same right, obligations and incidents as a contractual tenant, why should it be difficult to hold that, just like a contractual tenant, a statutory tenant also has estate or interest in the premises which can be inherited.

Calcutta High Court, Krishna Prosad Bose v. Sm. Sarajubala Dasi, Bachawat J. considering the question whether a statutory tenant continuing in occupation by virtue of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 could sub-let the premises let to him, said:

“The Rent Control and Tenancy Acts create a special world of their own. They speak of life after death. The statutory tenancy arises phoenix-like out of the ashes of the contractual tenancy. The contractual tenant may die but the statutory tenant may live long thereafter. The statutory tenant is an ex-tenant and yet he is a tenant.”

Namdeo Dashrath Naik & Ors vs Bhagwan Mahadeo Parab on 28 July, 2017 it was observed that, since the decision in the case of Rajaram (supra) and after the 1978 Amendment, it is only in the absence of member of the tenant’s family residing with the tenant at the time of the death of the original tenant, that any heir of the deceased tenant acquires tenancy rights under the Rent Act. From this, it follows that under the un-amended 1947 Act, the Division Bench of this Court had recognized that the provisions of 1947 Act were not made to supersede the rights to inheritance of tenancy vesting in the heirs on the death of the original tenant. Further, after the amendment, such rights shall accrue to the legal heirs of the deceased tenant, only in the absence of member of the tenant’s family residing with the tenant at the time of his demise. In both situations, therefore, devolution of the tenancy upon the heirs was contemplated, except that after the 1978 amendment, the devolution upon the heirs in accordance with law of inheritance was made subject to absence of any member of the tenant’s family using the tenanted premises for the purposes for which they were let out along with the original tenant, at the time of the demise of such original tenant.”

Conclusion: on death of original tenant right of tenancy devolves upon heirs.

Shruti Desai

7th May,2020

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