Supreme Court Declares "The Liability of the Tenant, to Pay Damages"

A relationship between two people that results from a rental fee-based arrangement whereby one person is allowed to occupy the other's real estate. A person who owns property and rents it out to others is referred to as a landlord. Tenant refers to the person occupying the space. A lease or rental agreement refers to the arrangement between a landlord and a tenant.

The Tenants who remain in possession after the lease's expiration may be classified as a tenant at sufferance, which is a status greater than that of a simple trespasser, according to a ruling by a bench of Justices KM Joseph and PS Narasimha.  The supreme court here noted that for a tenant who stays after the lease's expiration, his initial entry was legal. However, a tenant under duress is not a tenant who stays put.

In this case, the defendant-plaintiff had deeded to the appellant, Indian Oil Corporation Ltd., the centrally air-conditioned second, third, and fourth floors of a building as well as a guest home without air conditioning on the ninth level. The lease had a 21-year term that began on the day when the Appellant lessee received possession of the aforementioned floors. On September 9, 1969, a supplementary lease deed that had made some changes to the original lease deed from November 12, 1968, was also properly registered. According to the respondent's claim, he was given ownership of the second and third floors on September 12, 1969, and the fourth floor on December 18, 1969.

In a previous lawsuit that was filed in 1978 resulted in an agreement between the parties. The Appellant's failure to transfer unoccupied possession of the demised floors to the Respondent following the lease deed's expiration was what gave rise to the dispute. The only year that possession was transferred was 1994. As a result, the Respondent claimed that the Appellant had been unlawfully in possession of the demised floors from 1991 until 1994, or from the time the lease expired in 1990, whichever came first. 

As a result, the Respondent asserted mesne profits for all the demised floors under contention.

The Court here had to decide whether 

(i) the documents titled "agreement" dated November 21, 1968, and "supplementary agreement" dated September 12, 1969, were a lease.

 ii) Whether the 2nd and 3rd floors were transferred into possession on September 17, 1969, and the 4th floor was transferred on November 4, 1970. The Appellant was given possession of the second and third floors, according to the Apex Court, which set September 17, 1969, as the beginning date. This conclusion was reached by the Single Judge and the Division Bench because there were no documents to demonstrate the precise date. 

The Bench concerning the date of delivery of possession of the 4th floor observed – "As far as the 4th floor is concerned, given the findings by the High Court that the possession of the 4th floor was handed over on 04.11.1970 and the same not being questioned before us, we can safely proceed on the basis that 4th floor was handed over on 4th November 1970

The Court took note of the Appellant's subsequent argument that the Respondent terminated the lease dated 17.11.1968 in 1977 due to development, turning the Appellant into a monthly tenant and, more importantly, entitling it to benefits under the West Bengal Tenancy Act.

 In this case, the Court agreed with the High Court's conclusions that the Appellant was ineligible for protection under the "Tenancy Act" since she did not choose to exercise the option of the preceding determination and instead let the lease run its entire duration. The Court also addressed the question of whether the Limitation Act applied to mesne profits after three years from the filing of the lawsuit.

The Apex court here also observed, “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.” The Court furthermore noted that A tenant continuing in possession after the expiry of the lease is liable to pay mesne profits.