# SUDHIR KUMAR & ORS v. BALDEV KRISHNA THAPAR & ORS

- **Citation:** [1970] 3 S.C.R. 114
- **Court:** Supreme Court of India
- **Decided:** 1969-10-28
- **Case number:** Civil Appeals Nos. 2557 and 2558 of 1966
- **Bench:** J. C. Shah, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sudhir-kumar-ors-v-baldev-krishna-thapar-ors-4891
- **Pages:** 7

## Headnote

Landlord and Tenant-Option of renewal in lease deed subject to
lessor's consent-When lessor could withhold consent.
Suit for ejectment-Compromised-Les.s.ee allowed to
continue
in
possession till a particular date on terins and conditions of original IeaseWhether fresh lease or mere extension af time for delivery of pOssessionWhether renewal clause operativ'e.
One of the terms of the lease relating to a cinema house was that
after the expiry of the lease, the lessee shall have the option to renew
the. lease with the consent of the lessor, At the end of the lease oeriod,
the lessor brought a suit for ejectment, but died during its pendeoey. On
December 23, 1958. the suit was compromised between the legal represontatives of the lessor and the lessees.
By the compromise. the tenancy was
continued till December 31, 1962 on the terms and conditions of
the
original lease, and the lessees were to vacate the premises on January
1~
1963. One of tho legal representatives sold his share in the. cinema house
to the appellant who sought execution of the compromise decree
on
January 4, 1963. The respondents (lessees) contended that the compromise· created a fresh lease, that the decree was only a declaratory one
and that they were entitled to an extension of the lease on the basis of
the renewal clause incorporated into the fresh lease.
HELD: (1) The question whether under the terms of a compromise
the parties entered into a fresh lease or were only granted an extension
of time for delivery of possession depends upon the intention of parties
as. expressed in the compromise and the decree based on it.
On .the terms
of the compromise in the present case,
the lessors bad granted a fresh
lease and the lessees were given the option to renew the lease, which was
one of the terms of the original lease, at the end of the term fixed. that
is 31st Decembe.r 1962. Hence, the direction in the compromise decree
to vacate at the end of the term would be ineffective and would
not
amount to an ejectment decree. It is at best a declaration of the right
of the lessors to eject the lessees at the end of the le.ase period if 1he
le,sees fail to get a renewal. [118 B-C, G-H; 119. A-Bl
(2) Merely because the compromise had
fixed the period
during
which the. respondents continued as lessess, it did not mean, that the renewal clause in ·the original lease had not become one of the terms of the
agreement. [119 D-E]
(3) Nor was the renewal clause meaningless on the ground the lessees
were entitled to a renewal only if the lessors consented. The right of
the lessors to give consent must be read in the context of the lessees' entitlement to get the renewal.
So read. the lessors could withhold their
consent either because of the lessees' failure to observe one or other of
the material terms of the lease or on some other re.asonable ground. ,The
lessor could _not unreasonably withhold consent when the ~essee exercised
the option of renewal. (119 E-G; 120 A-BJ
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SUDH!R v. B. K. THAPAR (Hegde, J.)
115

## Text

114
SUDHIR KUMAR & ORS.
v.
BALDEV KRISHNA THAPAR & ORS.
October 28, 1969
{J. C. SHAH AND K. S. HEGDE, JJ.]
Landlord and Tenant-Option of renewal in lease deed subject to
lessor's consent-When lessor could withhold consent.
Suit for ejectment-Compromised-Les.s.ee allowed to
continue
in
possession till a particular date on terins and conditions of original IeaseWhether fresh lease or mere extension af time for delivery of pOssessionWhether renewal clause operativ'e.
One of the terms of the lease relating to a cinema house was that
after the expiry of the lease, the lessee shall have the option to renew
the. lease with the consent of the lessor, At the end of the lease oeriod,
the lessor brought a suit for ejectment, but died during its pendeoey. On
December 23, 1958. the suit was compromised between the legal represontatives of the lessor and the lessees.
By the compromise. the tenancy was
continued till December 31, 1962 on the terms and conditions of
the
original lease, and the lessees were to vacate the premises on January
1~
1963. One of tho legal representatives sold his share in the. cinema house
to the appellant who sought execution of the compromise decree
on
January 4, 1963. The respondents (lessees) contended that the compromise· created a fresh lease, that the decree was only a declaratory one
and that they were entitled to an extension of the lease on the basis of
the renewal clause incorporated into the fresh lease.
HELD: (1) The question whether under the terms of a compromise
the parties entered into a fresh lease or were only granted an extension
of time for delivery of possession depends upon the intention of parties
as. expressed in the compromise and the decree based on it.
On .the terms
of the compromise in the present case,
the lessors bad granted a fresh
lease and the lessees were given the option to renew the lease, which was
one of the terms of the original lease, at the end of the term fixed. that
is 31st Decembe.r 1962. Hence, the direction in the compromise decree
to vacate at the end of the term would be ineffective and would
not
amount to an ejectment decree. It is at best a declaration of the right
of the lessors to eject the lessees at the end of the le.ase period if 1he
le,sees fail to get a renewal. [118 B-C, G-H; 119. A-Bl
(2) Merely because the compromise had
fixed the period
during
which the. respondents continued as lessess, it did not mean, that the renewal clause in ·the original lease had not become one of the terms of the
agreement. [119 D-E]
(3) Nor was the renewal clause meaningless on the ground the lessees
were entitled to a renewal only if the lessors consented. The right of
the lessors to give consent must be read in the context of the lessees' entitlement to get the renewal.
So read. the lessors could withhold their
consent either because of the lessees' failure to observe one or other of
the material terms of the lease or on some other re.asonable ground. ,The
lessor could _not unreasonably withhold consent when the ~essee exercised
the option of renewal. (119 E-G; 120 A-BJ
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SUDH!R v. B. K. THAPAR (Hegde, J.)
115
CIVIL APPELLATE JURISDICTION:
Civil Appeals Nos. 2557
and 2558 of 1966.
Appeals from the judgment and order dated July 23, 1965 of
the Jammu & Kashmir High Court in Civil First Misc. Appeals
Nos. 20 and 30 of 1964.
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Mathur and Ravinder Narain, for the appellants.
A. K. Sen, Inder Das Grover and J. P. Aggarwal, for respondent.No. 1.
The Judgment of the Court was delivered by
Hegde, J.-These connected appeals ari~e from an execution
proceeding.
The question for determination in these appeals is
whether the decree under execution is executable ? The learned
single judge of the High Court of .J ammu & Kashmir before whom
the execution was levied came to the conclusion that the decree is
execvtable but the execution petitioners, who are entitled to a
fraction of the interest in the suit properties can only have joint
possession of the same along with the judgment debtors who had
acquired by purchase a ten annas share in those properties. Both
the appellants as well as responden.ts 1 and 2 appealed against the
order of the learned single judge.
The appellate bench of that
High Court reversed the decree of the learned single judge. It
came to the conclusion that the decree is not executable and that
it is merely declaratory in character. It accordingly dismissed
the execution petition.
Hence these appeals by certificate.
The facts giving rise to the controversy are as follows :
cine Sardar Uttam Singh Khorana leased in favour of the 1st
respondent and the father of the second respondent the Uttam
Talkies in Jammu including a cinema machinery and furniture
for a term of. three years on a monthly rental of Rs. 3,000. One
of the terms of the said lease was that after expiry of the lease, the
tenant shall have the option to renew the lease with the consent of
the landlord.
At the end of the lease period Sardar Uttam Singh
brought a suit for ejectment against the lessees but he died during
the pendency of the suit leaving behind him a will by which his
son Joginder Singh got six annas share in the Uttam Talkies and
his another son Devinder Singh got a four annas share therein.
The remaining six annas share was bequeathed to a trust.
On
December 23, 1958, a compromise was entered into between the
legal representatives of the original plaintiff and the defendants
by which the tenancy was continued till December 31, 1962.
We
shall refer to the other terms of the compromise at the appropriate
stage. Bef6re the term stipulated in the compromise came to an
end, Joginder Singh sold his six annas share in the Uttam Talkies
116
SUPREME COURT REPORTS
[1970) 3 S.C.R.
to the appellants in this appeal.
The other ten annas shares were
conveyed to the lessees by the owners of those shares.
Before
conveying their shares, on October 14, 1961, Devinder Singh and
the trustees of the· trust executed in favour of the lessees an agreement to renew the lease for a period of three years from 1-1-1963
more or Jess on the same conditions on which it was enjoyed by
them previously. On January 3, 1963 Devinder Singh on his own
behalf and on behalf of the trust filed an application before the
executing court praying that satisfaction of the decree may be
entered into.
Accordingly the court recorded satisfaction of the
decree by its order of the same date.
Thereupon the appellants
moved the Court for delivering khas possession of the Uttam
Talkies.
Yet another application was filed by them on January
5, 1963, requesting the court to review its order entering satisfaction of the decree. That application was accepted by the court
and on January 17,
1963, the learned single judge recorded
satisfaction of the decree only to the extent of the share purchased
by the lessees.
Thereafter the appellants pressed their execution
petition.
The lessees objected to the same.
As mentioned earlier
their objection was overruled by the learned single judge who
directed delivery of the joint possession in favour of the appellant
as well as the lessees.
As seen earlier that decision was overruled
by the division bench.
The contention on behalf of the appellant is that the compromise decree referred to earlier is an executable decree whereas the
lessees take the stand that it is
merely a declaratory decree.
According to them, the compromise entered into between the
parties amounts to a creation of a new lease and the decree
superimposed on it merely endorses the agreement entered into
between the parties.
The material portion of the compromise decree reads as
follows:
"1. The defendants shall remain ·as lessees of Uttam
Talkies Residency Road, Jammu with the machinery
furniture fitting etc. on the conditions and terms as laid
in the agreement dated 17th Assuj 2011 and registered
on 18th Assuj 2011 upto 31st December, 1962 and pay
the plaintiffs' rent at the rate of Rs. 3,000 per month
from l st January 1959 in the following proportion;
(a) S. Devinder Singh-Four annas in a rupee.
(b) S. Joginder Singh-Six annas in a rupee.
(c) M/s. Devinder Singh Gopal Dass and
Manohar
Lal-. Trustees six annas in a rupee.
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SUDH!R V. B. K. THAPAR (Hegde, J.)
2. The defendants shall be liable to ejectment and
shall vacate the premises on !st Jan.
1963 on the
terms and conditions as stated above.
3. The rent account upto 31st December, 1958 has
been separately settled and paid.
4. The defendants shall have right to quit the leased
premises at any time before 31st December 1962 provided they give two months previous notice to the plaintiff in this behalf. In such contingency rent due upto
the date of handing over the possession shall be recoverable.
5. The parties shall bear their own costs."
The relevant terms of the compromise are as follows :
"That the parties have compromised the abovenamed
case and have agreed that the defendants shall remain
as lessees of the Uttam Talkies, Residency Road, J ammu
on terms and conditions on which they previously held
the said premises machinery furniture fittings etc. upto
31st December, 1962 and pay to the plaintiffs rent at
Rs. 3,000 per month from 1st January 1959 in the
following proportion :-
S. Devinder Singh-Four annas in the rupee.
S. Joginder Singh-Six annas in the rupee.
M/s. Devinder
Singh,
Gopal Dass Manohar
Lal
Trustees-six annas in the rupee.
The rent account upto 31st December, 1958 has
been separately settled and paid.
The rest of the terms and conditions will be as contained in the agreement a deed dated 17th Assuj 2011
registered on 18th Assuj 2011.
·The defendants shall have right to vacate the
premises even before 31st December, 1962 if they so
desire and give 2 months previous notice. In such
contingency rent upto the date of handing over of
possession shall be ·recoverable.
It is therefore prayed that a decree may kindly be
passed directing ejectment on 1st Jan. 1963 on terms
and conditions contained herein.
The parties will bear their own costs."
117
Paragraph 30 of the lease executed by Uttam Singh in favour
of the lessees which incorporates the renewal clause reads
as
follows:
118
SUPREME COURT REPORTS
[1970] 3 S.C.R.
"That at the time of expiry of the period of three
years the promisors with the consent and consultation
of promisee shall be entitled to take the cinema on
contract for further two years on the above conditions
provided that there has been no breach of any condition laid down in the agreement."
The question whether under the terms of the compromise
the parties entered into a fresh lease or the decree holders merely
granted an extension of time for delivery of possession of the
premises demised essentially depends on the intention of the
parties wh~ entered into the compromise as could be gathered
from the compromise petition as well as the compromise. decree.
It is necessary to note that in the compromise petition, it is specifically stated that the parties had agreed "that the defendans shall
remain as lessees of Uttam Talkies Residency Road, J ammu on
terms and conditions on which they previously held the said
premises machinery furniture fittings etc. upto 31-12-1962 and
pay to the plaintiff rent at Rs. 3,000 per month from 1st January
19 5 9 in the following proportion .... " It is further stated therein
that "the rest of the terms and conditions will be as contained in
the agreement a deed dated 17th Assuj 2011 registered on 18th
Assuj 2011".
But the last clause in the compromise petition
reads : "it is therefore prayed that a decree may kindly be passed
directing ejectrnent on 1st January 1963 on tem1s and conditions
contained herein." The compromise decree refers to the defendants as "lessees" and the compensation payable by them as 'rent'.
At the same time cl. (2) of the decree says that the defendants
shall be liable to ejectment and shall vacate the premises on !st
January 1963 on the terms and conditions as stated above.
The
compromise and the compromise decree speak, so to say, in two
voices. If we had been merely left with the specific terms incorporated in the compromise petition and the compromise decree
without bringing in by reference the terms of the original lease as
to matters not specifically covered in the compromise petition and
the compromise decree, there would have been some difficulty in
spelling out the real intention of the parties. But by incorporating the terms of the old lease, to the extent not covered ·by the new
terms, the parties had agreed to incorporate into the new agreement the term relating to renewal found in the original lease.
On an analysis of the terms of the compromise, it is seen that the
lessors had granted a fresh lease of the cinema talkies demised;
a monthly rental was fixed in respect of the same and
the
lessees
were given an option
to renew
the
lease
at the end of
the term
fixed though
that
right
is
subject to certain conditions. Under
these circurt1stances,
the direction in the decree to vacate the suit premises ·at
the end of the term fixed in the compromise in accordance with
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SUDHIR v. B. K. THAPAR (Hegde, / .. )
119
the terms of the compromise would amount to an ineffective direction. Such a direction cannot be considered as an ejectment
decree.
It is at best a declaration of 'the right of the lessors to
eject the lessees at the end of the lease period if the lessees fail to
get a renewal.
Mr. Tarkunde, learned Counsel for the appellant contended
that on a proper construction of the compromise petition and the
compromise decree, it would be seen that the renewal clause was
not incorporated into the compromise decree.
According to him
the period during which the defendants are permitted to be in
possession of the suit premises is subject to no alteration
under
any
circumstance.
Subject to
that condition
and other conditions mentioned in the compromise petition the
terms of the original lease were incorporated into the compromise
petition.
We see no basis for this contention. A term in a lease
relating to renewal is independent of the duration of the lease
fixed under the lease deed. The renewal e';tained by the exercise
of the option given under the lease is an extension obtained by
the exercise of an independent pow~r. Therefore there is no
force in the contention that because the compromise had fixed the
period during which the defendants could continue as lessees, the
renewal clause in the original lease deed did not become one of
the terms of the agreement.
We are unable tg consider the clause
in the compromise referring to the original lease as a barren clause
or that it is not wide enough to reach the renewal clause.
Mr. Tarkunde next contended thai the renewal clause referred
to earlier is a meaningless term as the lessees are entitled to a
renewal only if the lessors consented. He urged that there can be a
renewal only if both the lessors and the lessees agreed, but in that
event there is no need to have a term providing for renewal.
We
are unable to read the renewal clause as Mr. Tarkunde wants
us to do.
No term in a contract should be considered as superfluous if it can be given some reasonable mean;ng. The clause
in question definitely says that lessees are entitled for a renewal.
The right of the lessors to give consent must be read in the context
o( th.e'l.essees~ e.ntitlement to get a renewal of the lease. If so
read, it is clear that the lessors can withhold their consent either
because of the lessees' failure to observe one or other of the material
terms of the lease or on some o!her reasonable ground.
The
lessors cannot withhold their consent capriciously or unreasonably.
A covenant against assigning and letting, charging or parting with
possession of the demised property or any part thereof without
licence or consent of the landlord is deemed to be subject to a
proviso to the effect that such licence or consent is not to be
unreasonably withheld.
That is the position both under
the
English law as well as under the Indian law.
About that there
is no dispute. If in the matter of introducing a stranger to the
120
SUPREME COURT REPORTS
(1970) 3 S.C.R.
demised property, the law insists that the lessors should not
unreasonably withhold his consent, it follows as a matter of reason
and logic that the lessor cannot unreasonably withhold his consent,
when the les!ee exercises his option to renew the lease on the
strength of one of the terms in the lease deed.
On a consideration of all the terms in the compromise petition, we are satisfied that the parties intended to create a fresh
lease and not that the lessees were only permitted to be in possession of the leasehold for the prescribed period as licensees.
For the reasons mentioned above, these appeals fail and are
dismissed with costs.
One set.
V.P.S.
Appeals dismissed.
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