The suit property is a shop situated on the ground floor of a building known as 'Woodlands Building' on the M.G. Road, Ernakulam. The respondent filed a civil suit seeking issuance of mandatory injunction directing the appellants to hand over vacant possession over the shop to the respondent on the ground that the license to occupy the suit premises was terminated.
According to the respondent the premises in occupation of the appellant is a car parking place. As between the parties there exists a document dated April 1, 1981 executed by the appellant in favour of the respondent which is styled as a deed of licence. The document begins with a recital -- "Whereas licensee is desirous of having the use of the premises for conducting stationery shop in room ............in Woodlands building, intended as car parking space for lodgers at the time of construction". The next Para states -- "And whereas the licensor is willing to grant licence to the licensee in respect of the aforesaid room for the purpose of carrying on business in stationery goods as licensee of the premises".
Evans & Smith state in The Law of Landlord and Tenant (Fourth Edition) - " A lease, because it confers an estate in land, is much more than a mere personal or contractual agreement for the occupation of a freeholder's land by a tenant, A lease, whether fixed-term or periodic, confers a right in property, enabling the tenant to exclude all third parties, including the landlord, from possession, for the duration of the lease, in return for which a rent or periodical payment is reserved out of the land. A contractual licence confers no more than a permission on the occupier to do some act on the owner's land which would otherwise constitute a trespass.
If the effect of the instrument is to give the holder the exclusive right of occupation of the land, though subject to certain reservations, or to a restriction of the purposes for which it may be used, it is prima facie a lease; if the contract is merely for the use of the property in a certain way and on certain terms, while it remains in the possession and under the control of the owner, it is a licence.
It is thus clear that the present one is not a case where the possession or control of the premises was retained by the respondent while the appellant was only permitted to make such use of the premises as would have been unlawful but for the permission given.
The lessors gave notice purporting to terminate the tenancy by the end of the September 1959. They stated in the notice that the lessees had sub-let the premises and that the lessors required the plot for purpose of putting up construction on it.
Before the High Court, the main contention of the appellants was that, since a fresh tenancy by holding over was created by the acceptance of rent by the lessors after the determination of the lease by efflux of time, the appellants were entitled to six months' notice expiring with the end of the year of the tenancy, as the lease originally granted was for a manufacturing purpose, and therefore, the lease created by the holding over was also for same purpose.
The act of holding over after the expiration of the term does not create a tenancy of any kind. If a tenant remains in possession after the determination of the lease, the common law rule is that he is a tenant at sufferance. A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent. The former is a tenant holding over or a tenant at will and the latter is a tenant at sufferance in English Law.
If the tenant has the statutory right to remain in possession, and if he pays the rent, that will not normally be referable to an offer for his continuing in possession which can be converted into a contract by acceptance thereof by the landlord. We do not say that the operation of Section 116 is always excluded whatever might be the circumstances under which the tenant pays the rent and the landlord accepts it.
We have already held the whole basis of Section 116 of the Transfer of Property Act is that, in case of normal tenancy, a landlord is entitled, where he does not accept the rent after the notice to quit, to file a suit in ejectment and obtain a decree for possession, and so his acceptance of rent is an unequivocal act referable only to his desire to assent to the tenant continuing in possession. That is not so where Rent Act exists; and if the tenant says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenant's continuing in possession, it is for the tenant to establish it.
If he tenders the rent as the rent payable under the statutory tenancy, the landlord cannot, by accepting it as rent, create a tenancy by holding over. In such a case the parties would not be ad idem and there will be no consensus.