INDIAN OIL CORPORATION LTD. v. SUDERA REALTY PRIVATE LIMITED

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would not in law have the effect of determining the lease which was for A a period of 21 years. In the circumstances of this case, we find no merit in the case of the appellant based on the decision of this Court in Calcutta Credit Corporation Ltd. (supra) as regards the effect of waiver under Section 111 of the Transfer of Property Act resulting in the creation of the new tenancy. B

55Copy pinpoint55. As regards the case based on Section 3(2) of the Tenancy Act, namely, the presence of an option with the appellant/lessee to terminate the 21 years lease immaturely, it is no doubt true that Clause 9 did give an option to the appellant to terminate lease after the expiry of 8 years and before the period of 21 years expired. It is here that the decision of this court in Pabitra Kumar Roy (supra) needs to be C considered. In the said case, registered lease was dated 13.01.1969. The lease commenced from 01.01.1969 and was for a period of 21 years. The lease, in fact, contained a clause which permitted the parties to terminate the lease prior to its expiry. On 29.09.1972, the lessor determined the lease under Section 111(g) of Transfer of Property Act. D What is more, a suit was filed against the lessee for eviction which was decreed on the ground of default in paying rent. The lessee went ahead and successfully invoked Section 114 of the Transfer of Property Act and on payment of the rent, he was allowed to continue. Thereafter, on completion of the period of 21 years, the suit for ejectment was filed. It is in this case that the tenant sought shelter under Section 3 of the Tenancy E Act. It was the case of the tenant that the tenant was protected under the Tenancy Act, in view of the prior determination. We need only notice paragraphs 15, 19, 20 and 22. “15. On a construction of the provisions of sub-section (2) of Section 3 of the 1956 Act, we are unable to subscribe to the view expressed by the High Court. The intention of the legislature in amending Section 3 appears to have been to prevent landlords from using long-term leases as a camouflage for excluding them from the protection of the 1956 Act and yet retaining the right of prior determination. Sub-section (2) appears to have been enacted to prevent such abuse, inasmuch as, once the lease was determined before the fixed period, it attracted the proviso thereof. xxx xxx xxx

19. The decision in Savita Dey case [(1995) 6 SCC 274 : AIR 1996 SC 272] makes the position clear that the mere inclusion of H

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A a clause for prior determination of a lease, which is otherwise for a fixed period of more than twenty years, will not ipso facto bring it within the exception contemplated in the proviso to sub-section (2) of Section 3 of the 1956 Act. The inclusion of such a clause may be taken by the tenant as a defence in the event the option under the said clause is exercised. Such a defence was not set up B by the lessee in the earlier suit when it was available to her and the same is not available to her after the lapse of the fixed period of the lease.

20. As was indicated by the Calcutta High Court in Mahindra & Mahindra case [(1989) 93 CWN 773 : AIR 1989 NOC 200 (Cal) C : (1989) 1 CHN 1] a lease for a fixed period does not cease to be so by the inclusion of a clause entitling either the lessor or the lessee to determine the lease prior to its expiry, unless such option is actually exercised. xxx xxx xxx D

22. The law is clear that lease deeds for periods of twenty years or more would stand excluded from the operation of the 1956 Act except in matters relating to Sections 31 and 36 thereof, unless the same were terminable before their expiration at the option either of the landlord or of the tenant. In other words, if such a E lease is terminated before its fixed period expired, the proviso to Section 3(2) would be attracted as a defence against eviction. If, however, the lease was allowed to run its full course, both the lease and the conditions contained therein would come to an end and would cease to be operative and the clause for prior F determination would no longer be available as a defence against eviction.”

56Copy pinpoint56. The Court also found that the tenant was estopped having submitted to the jurisdiction of the court under the Transfer of Property Act by seeking relief under Section 114 of the Transfer of Property Act. G Since the Court has also relied upon the judgment of this Court in Savita Dey v. Nageswar Majumdar and Another13, we may advert to the same. In the said judgment, the Court was dealing with the lease which commenced on 01.07.1964 and ended on 30.06.1985. It was found that since lease was executed prior to the amendment inserting sub-section 13 H (1995) 6 SCC 274

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(2) in Section 3 in 1965, the tenant could not succeed on the basis of the pre determination clause. We may also notice the following discussion: “8. Additionally, in the lease in hand, neither the landlord nor the tenant had reserved to himself the unfettered right of termination of the lease during the period of 21 years. In the first place, as are the facts pleaded, neither of them has ever asserted the said right of premature termination. Perhaps no occasion arose. Secondly, the question of the suggested precariousness of the tenure did not arise in the circumstances of the case because the lessee/tenant had fully enjoyed the period of lease of 21 years. The heart of the matter is that the tenancy was never terminated either by the landlord or by the tenant during the period of the lease.” C

57Copy pinpoint57. In this case it is no doubt true that there is pre-determination clause which gave an option to the appellant to determine the lease after a period of 8 years. From the evidence and the stand taken by the appellant as emerging from the documents, it is clear that the appellant continued for the full length of 21 years in terms of the lease. Its possession was never ruffled. The appellant also filed a suit. During the entire period after the execution of the deed in 1968 and the supplementary lease deed in 1969, it would appear that till the period of 21 years ran out, appellant never took up the case based on its right under the West Bengal Premises Tenancy Act in view of the option it had to determine the lease under Clause 9. The presence of the clause in question is not to be confused with the issue relating to the effect of the notice dated 07.12.1977 purported to have been sent to the respondent which we have separately dealt with. Therefore, in terms of Pabitra Kumar Roy (supra), the appellant may not succeed on the strength of the option it claimed under the agreement to lease. F

IS LETTER DATED 19.10.1990, A NOTICE UNDER SECTION 106 OF THE TRANSFER OF PROPERTY ACT?

58Copy pinpoint58. The appellant would contend that there was a pre mature G determination of the lease vide letter dated 19th October, 1990 and this would result in the occupation of the appellant from the said date being as a monthly tenant and, therefore, the Tenancy Act applied. It is the case of the respondent that this contention was not raised before the courts below and the contention which was raised before the High Court was that it became the monthly tenant in 1991 on the basis of holding H

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A over of possession after the expiry of the lease. The case of the respondent further is that it must be understood that the letter dated 19.10.1990 was one only enquiring whether the appellant would deliver possession of the 2nd and 3rd floors. The letter adverts to the lease expiring by efflux of time. We are of the view that there is merit in the contention of the respondent. We cannot on the terms of the letter dated 19.10.1990 hold that it amounted to termination of the lease. We have found that there was a lease for a term of 21 years commencing in the case of the 2nd and 3rd floors from 17.09.1969. Therefore, the period of 21 years had already run out by the time the letter dated 19.10.1990 came to be issued. In other words, it was a case of a lease qua the 2nd and 3rd floors which had expired by efflux of time, in September, 1990. We reject the argument of the appellant in this regard. MESNE PROFITS: WAS THE POSSESSION OF THE APPELLANT WRONGFUL ON THE EXPIRY OF THE LEASE?

59Copy pinpoint59. Section 111(a) of the Transfer of Property Act, 1882 provides that the lease is determined by efflux of time. On the expiry of the lease, the lease ends. As to its effect, we may only notice the following statement in the decision reported in Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd.14: E “11. Under the general law, and in cases where the tenancy is governed only by the provisions of the Transfer of Property Act, 1882, once the tenancy comes to an end by determination of lease under Section 111 of the Transfer of Property Act, the right of the tenant to continue in possession of the premises comes to an end and for any period thereafter, for which he continues to occupy the premises, he becomes liable to pay damages for use and occupation at any rate at which the landlord could have let out the premises on being vacated by the tenant.…”

60Copy pinpoint60. A tenant continuing in possession after the expiry of the lease may be treated as a tenant at sufferance, which status is a shade higher than that of a mere trespasser, as in the case of a tenant continuing after the expiry of the lease, his original entry was lawful. But a tenant at sufferance is not a tenant by holding over. While a tenant at sufferance cannot be forcibly dispossessed, that does not detract from the possession

H 14 (2005) 1 SCC 705

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of the erstwhile tenant turning unlawful on the expiry of the lease. Thus, A the appellant while continuing in possession after the expiry of the lease became liable to pay mesne profits. LIMITATION: WHETHER THE SUIT IS BARRED IN RELATION TO MESNE PROFITS BEYOND 3 YEARS OF THE SUIT? B

61Copy pinpoint61. Order VII Rule 6 of the CPC reads as follows: “VII (6). Grounds of exemption from limitation law. — Where the suit is instituted after the expiration of the period prescribed by the law of limitation, the plaint shall show the ground C upon which exemption from such law is claimed: Provided that the Court may permit the plaintiff to claim exemption from the law of limitation on any ground not set out in the plaint, if such ground is not inconsistent with the grounds set out in the plaint.” D

62Copy pinpoint62. A perusal of the plaint filed would, inter alia, reveal, the following pleading: “24 The defendant expressly and/or impliedly admitted the existence of the jural relationship between the parties by its letter dated 24th May, 1994. By reason of the aforesaid and by reason of the acknowledgement contained in the letter dated 24th May, 1994 the plaintiff states that no part of its cause of action is barred by laws of limitation,” Thus, the case of the appellant was that based on the admission and acknowledgment in letter dated 24th May, 1994, no part of the cause of action was barred.

63Copy pinpoint63. In the Trial Court, the learned Single Judge framed an issue as to whether the Suit is barred by limitation. The Judgment would reveal that the plea of limitation was not pressed. The learned Single Judge also went on to find that the Suit is within the period of limitation. Before G the Division Bench, the appellant did not raise the plea of limitation. It is in this Court that the plea is sought to be resurrected. The plea is based on the case that a Suit of mesne profits is governed by Article 51 of the Limitation Act, 1963, which reads as follows:

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B ’’ The suit was laid on 10.04.1995. The contention is that for the period beyond 3 years before the date of the suit, the suit would be barred.

64Copy pinpoint64. The case of the respondent is that the plea of limitation was not pressed before the learned Single Judge and was also not taken up before the Division Bench. It is further contended that a claim for mesne profits involves a liability, which accrues on a day-to-day basis. In this regard, attention is drawn to Ram Karan Singh and others v. Nakchhed Ahir and others15, which has been referred to by this Court in the D Judgment reported in Raptakos Brett and Company Limited v. Ganesh Property16 and we may notice only paragraph-21 of Raptakos Brett and Company Limited (supra): “21. In Ram Karan Singh [Ram Karan Singh v. Nakchhad Ahir, 1931 SCC OnLine All 39 : AIR 1931 All 429] , a Full Bench of the E Allahabad High Court while examining the issue of maintainability of second suit for pendente lite and future mesne profits where earlier suit for possession and past mesne profits has already been decided has held as follows : (SCC Online All) “It seems to us that the cause of action for recovery of possession is not necessarily identical with the cause of action for recovery of mesne profits. The provisions of Order 2 Rule 4, indicate that the legislature thought it necessary to provide specially for joining a claim for mesne profits with one for recovery of possession of immovable property, and that but for such an express provision, such a combination might well have been disallowed. A suit for possession can be brought within twelve years of the date when the original dispossession took place and the cause of action for recovery of possession accrued. The claim for mesne profits can only be brought in respect of profits within three years of the 15 AIR 1931 Allahabad 429 H 16 (2017) 10 SCC 643

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institution of the suit and the date of the cause of action for mesne A profits would in many cases be not identical with the original date of the cause of action for the recovery of possession. Mesne profits accrue from day to day and the cause of action is a continuing one, and arises out of the continued misappropriation of the profits to which the plaintiff is entitled. …” B (Emphasis supplied)

65Copy pinpoint65. In the said passage, what has been considered, was the issue relating to the maintainability of the second Suit for pendente lite and future mesne profits, in a situation, where an earlier suit for recovery of possession and for past mesne profits had been decided. We notice that C what the Court has essentially held is that but for Order IV Rule 2 of the CPC, as it stood specifically providing for joining a claim for mesne profits with one for recovery of possession of an immovable property, such a joining together of claims in one suit, may have been not allowed. It is thereafter stated that a claim for mesne profits can only be brought in respect of profits within three years of the institution of the suit. Still D further, it is found that the date of cause of action for action for mesne profits may not coincide with the date of cause of action for recovery of possession. It is thereafter that the statement which is relied upon by the respondent has been made. The Court held that mesne profits accrue from day-to-day and the cause of action is a continuing one. It arises out of the continued misappropriation of the profits, which a plaintiff is entitled to.

66Copy pinpoint66. Article 51 contemplates a period of three years from the date on which the profits from the immovable property is received by the defendant. If it is to be understood as profits actually received by the defendant, then, it is obvious that Article 51 may not apply. If a Suit for mesne profits of the kind involved in this case would fall more appropriately under Article 113 of the Limitation Act, which is the residuary Article, the Suit must be instituted within a period of three years from the date on which the right to sue accrue. This Article is in stark contrast with Article 58 of the Limitation Act, under which, the period of limitation is three years but from the date on which the cause of action first arises. If a claim for mesne profits is one, which accrues from day-to-day and it is a continuing one and if the suit for mesne profits would fall to be decided under Article 113 of the Limitation Act, H

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A then, since the cause of action is a continuing one, the suit may not be barred as regards any part of the claim as contended by the appellant.

67Copy pinpoint67. In this case, there is another dimension. The case set up by the respondent plaintiff in the plaint, as noticed, was that, it by virtue of the acknowledgment and admission of the jural relationship in letter dated B 24th May, 1994, there is no bar of limitation for any part of its cause of action. In their submission before this Court also, the respondent has laid store by the stand that the respondent was awaiting a decision by the Chairman.

68Copy pinpoint68. It is true that a pure question of law which does not involve C any investigation of facts, and if the plea of limitation in a given case is such, there can be no taboo in this court dealing with it even if raised for the first time. This is however not a case where the plea was not raised. It was raised and an issue was framed. But it was expressly given up before the Single Judge and not pursued before the Division Bench.

69Copy pinpoint69. While on acknowledgment under Section 18 of the Limitation Act, this Court in Messrs. Lakshmirattan Cotton Mills Co. Ltd. and Messrs. Behari Lal Ram Charan v. The Aluminium Corporation of India Ltd.,17 held, inter alia, as follows: - “9. It is clear that the statement on which the plea of acknowledgment is founded must relate to a subsisting liability as the section requires that it must be made before the expiration of the period prescribed under the Act. It need not, however, amount to a promise to pay, for, an acknowledgment does not create a new right of action but merely extends the period of limitation. The statement need not indicate the exact nature or the specific character of the liability. The words used in the statement in question, however must relate to a present subsisting liability and indicate the existence of jural relationship between the parties, such as, for instance, that of a debtor and a creditor and the intention to admit such jural relationship. Such an intention need not be in express terms and can be inferred by implication from the nature of the admission and the surrounding circumstances. Generally speaking, a liberal construction of the statement in question should be given. That of course does not mean that where a statement is made without intending to admit the existence of

H 17 (1971) 1 SCC 67

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jural relationship, such intention should be fastened on the person making the statement by an involved and far-fetched reasoning.”

70Copy pinpoint70. The case of the respondent appears to be that there is an admission of the jural relationship by virtue of the letter dated 24.05.1994. This is a letter written by the appellant in reply to the letter dated 02.05.1994. It is necessary to refer to the relevant portion of the letter dated 02.05.1994. After referring to a discussion held on 27.04.1994, wherein it was alleged that certain decisions were taken, it was, inter alia, stated as follows: - “(iv)On the assurance that Sudera’s claim of mesne profits as to the leasehold property in occupation of IOC will be looked into and decided upon by IOC’s Chairman, Shri Bakshi in a reasonable, fair and judicious manner, Sudera will not insist on reference to Arbitration (for which the draft agreement for reference to arbitration was sent by IOC to Sudera and returned back to them duly confirmed with observations and clarifications). The amount of Rs.90,00,000/- (Rupees Ninety Lakhs only) odd paid by IOC D to Sudera after the expiry of the Lease till date and received by Sudera as an ‘on a/c’ payment, shall be treated as payment received while settling the mesne profits payable as aforesaid. (v) The two aspects of handing over of possession of the property and the determination of the claim for mesne profits of Sudera by E the Chairman of IOC shall stand delinked. While the possession shall be made over forthwith, the claim for mesne profits shall be decided by the IOC’s Chairman, Shri Bakshi as expeditiously as possible, but not later than two months from date of making over possession.” F

71Copy pinpoint71. In the letter written by the appellant dated 24.05.1994, which we have already extracted hereinbefore, the discussion being held on 27.04.1994, was admitted. In regard to Clauses (iv) & (v) of letter dated 02.05.1994 which we have referred to, we may notice only the following:- “So far as clauses (iv) and (v) are concerned, it was discussed G that Chairman will first decide the question of maintainability of your claim for mesne profits. IOC has been consistently contending by several letters to you that there can be no question of mesne profits in this case. If the H

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A Chairman decides that the claim for mesne profits is maintainable in law after hearing the view points of both sides in the matter only then he will go into the question of the assessment of the amount thereof. You were kind enough to say that you would accept the advice of B the Chairman on every respect as final and binding. At the same time, you will appreciate that no agreement for arbitration agreement was concluded or entered into. A draft was never finalized and no agreement for arbitration was ever finally prepared not signed by any party because talks for arbitration fell through at the stage of discussions.” C

72Copy pinpoint72. It is undoubtedly true that it has been clearly stated that the Chairman will take a decision on the maintainability of the claim for mesne profits. In the same breath, the appellant appears to indicate in the letter that it has been taking the stand that there can be no question of mesne profits. But the letter further indicates that the Chairman will D take a decision after hearing the respondent also regarding the maintainability and only then the assessment of mesne profits will be carried out.

73Copy pinpoint73. We have already noticed that an acknowledgment, as far as the admission of the jural relationship is concerned, need not be express. E It would become necessary to probe the surrounding circumstances. This may include going into the facts. In this regard, in fact, no arguments were addressed on behalf of the appellant and indeed even on behalf of the respondent with reference to the impact of Order VII Rule 6 of the CPC or Section 18 of the Limitation Act. As already noticed, even in the letter dated 24.05.1994 it is not as if there is a categoric statement from the appellant admitting liability to pay mesne profits.

74Copy pinpoint74. We may further notice as follows. In the plaint, it is, inter alia, stated as follows: “The plaintiff is entitled to claim and claims mesne profits in respect of the said 57105 sq. ft. comprised of 2nd, 3rd and 4th floors in the premises No.1. Shakespeare Sarani, Calcutta @ Rs. 31/- per sq. ft. per month which the defendant, remaining or continuing. in wrongful possession of the said property actually received or might with the ordinary diligence have received therefrom having regard to the prevalent of rent in the locality where the premises no.1, H

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Shakespeare Sarani, Calcutta within the jurisdiction of this Hon’ble A Court is situate.”

75Copy pinpoint75. Article 51 of the current Limitation Act corresponds to Article 109 of the Limitation Act 1908. We may notice that in Dullabhbhai Hansji and Another v. Gulabbhai Morarji Desai18, the question arose as to whether Article 109 of the Limitation Act, 1908 would apply in the following facts: One Gulab Chand stood adjudicated as an Insolvent. On the application of the plaintiff as Receiver the sale by the insolvent was set aside on March 13, 1929. The suit was instituted in March, 1931 for mesne profits. The contention of the defendant was that the suit was barred for the period from 1925 to 1928. It is while dealing with these facts the Court held as follows: “.. It is no doubt perfectly true that the plaintiff could not have sued to recover these mesne profits until he had got the sale set aside. But Article 109 does not provide that the starting point of time for the recovery of mesne profits wrongfully received shall be the date when the cause of action to recover those profits arose; the starting point is the date when the profits were received….”

76Copy pinpoint76. In Dwarkas Nathamal v. Balkrishna Baliram19, a learned E Single Judge was dealing with essentially the question whether a subsequent suit for mesne profits for a different period would be barred by Order II Rule 2 of CPC. It was held as follows: “10. With great respect, I am unable to agree with the view which the learned Judge has taken. It is clear from the passage quoted F above that the basis of the view is that “the claim for mesne profits can arise only when the defendant wrongfully appropriates the profits from the property in respect of which a claim is made”. In the first place, in order to sustain a claim for mesne profits, it is not necessary that the defendant must wrongfully appropriate the profits of the property in respect of which a claim is made. What G the plaintiff is required to establish in a suit for mesne profits is that the defendant is in wrongful possession of the property, and if that fact is established then the profits which the defendant has 18 (1938) 40 Bom LR 100 19 AIR 1964 Bom 42 H

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A received or which he may with reasonable diligence have received must be paid to the plaintiff. Secondly, to hold that what gives rise to a right to claim mesne profits is the appropriation of the profits by the defendant and that “a right to claim mesne profits by a suit can accrue only when the person in wrongful possession of the property had actually received such profits”, is to ignore that the liability of the defendant to pay mesne profits is not dependent upon the actual receipt of the profits. Section 2, cl. (12) of the Code of Civil Procedure defines ‘mesne profits’ as profits which are either actually made or which might with reasonable diligence have been made by the person in wrongful possession of the property. Then again, the reference made by the learned Judge to art. 109 of the Limitation Act is, with respect, not apposite, because, column (3) of the several articles in the 1st Schedule to the Limitation Act concerns itself with the “time from which period begins to run” and not with the date on which the cause of action for the suit accrues. The only implication of the third column of art. 109 is that a suit which is filed more than three years after the date on which the defendant received the profits would be barred by limitation. As stated by Sir John Beaumont in Dullabhbhai v. Gulabhai [(1937) 40 Bom. L.R. 100, at p. 103.]”

77Copy pinpoint77. It is true that Section 2(12) of the CPC defines ‘mesne profits’ E as follows: “2(12) “mesne profits” of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession;”

78Copy pinpoint78. Undoubtedly, mesne profits, as defined in Section 2(12), includes not only the profits which a person in wrongful possession of such property actually receives but also those profits which he might with ordinary diligence have received therefrom together with interest on such profit. What is excluded is only the profit due to improvement made by the person in wrongful possession. However, Article 51 of the Limitation Act deals with a suit for profits of the immovable property belonging to the plaintiff which have been wrongfully received by the defendant. The time no doubt for such a suit begins to run when the profits are received. In fact, we may notice the judgment of the Privy

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Council in Sri Raja Inuganti Venkata Rajagopala Rama A Suryaprakasa Rao Garu v. Maharaja of Pithapuram and another20. In the said case, the Collector recognised the respondent as land owner of the estate. This was in accordance with the decree of the lower court and pending an appeal therefrom. The respondent got into possession and collected the rents and profits. The decree was reversed in appeal. B The Collector cancelled the recognition at the instance of the appellant. The appellant was recognised as land holder. The Privy Council took the view that the Article which would apply is Article 120 of the Limitation Act, 1908 corresponding to Article 113 of the present Law of Limitation. We may notice only the following: “... Their Lordships are therefore of opinion that the plaintiffs had C no right of suit for the rents or profits while the possession was under the order of 12th January, 1924. It was only after that order was cancelled in consequence of the decision of this Board that a right of action to recover rents and profits accrued to the plaintiffs, and that right is preserved to them by the proviso to S.67. the D High Court’s judgment recognizes that if suits had been brought each time that rents or profits were received they could have made no progress, but must have been stayed till the final determination of the question of title.”

79Copy pinpoint79. In Phiraya Lal Alias Piara Lal and another v. Jia Rani E and another21, while dealing with the case of a suit filed for possession and damages, after finding the right to sue based on possessory title while dealing with the aspect of mesne profits, it was, inter alia, held as follows: “..It is to be noted that though mesne profits are awarded because the rightful claimant is excluded from possession of immovable property by a trespasser, it is not what the original claimant loses by such exclusion but what the person in wrongful possession get or ought to have got out of the property which is the measure of calculation of the mesne profits. (Rattan Lal v. Girdhari Lal, AIR 1972 Delhi 11). This basis of damages for use and occupation of immovable property which are equivalent to mesne profits is different from that of damages for tort or breach of contract unconnected with possession of immovable property.” 20 AIR 1948 PC 175 21 AIR 1973 Del 186 H

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80Copy pinpoint80. It is apposite in this context to refer to the decision in Rattan Lal v. Girdhari Lal and Another22 which is relied upon in the aforesaid judgment. In the said case, the landlord obtained a decree for eviction. The decree became inexecutable because of a law but the decree was executed. The tenant was, however, restored the possession, under inherent jurisdiction. Thereupon, the tenant claimed mesne profits, inter alia. It was, in the said facts, that the Court held, after referring to Section 2(12), as follows: “..the principle underlying the definition of “mesne profits” in Section 2 of the CPC is that the person in wrongful possession must pay to the person, who was wrongfully dispossessed, such profits which the former actually receives or might with ordinary diligence have received from the property together with interest on such profits. The test therefore is not what the tenant lost by being dispossessed but what the landlord got or could have got with reasonable diligence because of the dispossession.”

81Copy pinpoint81. The Court also did not agree with the argument which appealed to the lower Court, namely, that the tenant could not have sublet the premises and therefore there was no loss due to dispossession. Sub- letting was found legal. It is also found that the fact that the tenant was not paying rent during the period of dispossession was the wrong approach E to deny mesne profits. The correct approach was whether the person in possession made profit or could have made profit. It is to be noted that, interestingly, in the said case, the roles were reversed. Mesne profits was sought against the landlord. In the case of a landlord, there could be no question of there being any restriction on his right to deal with his property and earn profit within the meaning of Section 2(12) of the CPC. F

82Copy pinpoint82. We have however noticed what this Court has laid down in Atmaram (supra). This Court has declared that in the case of determination of a lease by the lease coming to an end, tenant would be liable to pay damages for use and occupation at the rate at which the landlord could have let out the premises on being vacated by the tenant. G Without disagreeing with the said view for which we see no reason, we cannot adopt the principle which in the facts of the case commended itself to the High Court of Delhi in Rattan Lal (supra). What the landlord is entitled is, to get damages for the use and occupation at any rate, at which, the landlord could have let out the premises on being vacated by H 22 AIR 1972 Del 11

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the tenant. Section 2(12), no doubt, includes profits, which the person, in wrongful possession, might, with ordinary diligence, have received therefrom. The liability of the tenant, to pay damages on the basis of the rate at which landlord could have let out the premises, may not be the same as the profit the tenant might have received with ordinary diligence. In the first place, equating the same must involve a right with a tenant to transfer or sub-let the premises. In other words, the Court would have to find whether the tenant could have, in law, let out the premises and derived a higher amount.

83Copy pinpoint83. Once the lease comes to an end, the erstwhile tenant becomes a tenant at sufferance. He cannot be dispossessed, except in accordance with law. But he cannot, in law, have any right or interest anymore. C Even though, under Section 108 of the Transfer of Property Act, if there is no contract to the contrary, the tenant may have the right, under Section 108(j), to transfer his interest absolutely or even by sub-lease or mortgage, when the lease expires by afflux of time, his interest as lessee would come to an end. In this context, we may notice the following statement of the law in Bhawanji Lakhamshi and Others v. Himatlal Jammnadas Dani and Others23: “9. 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 on sufferance…” Thus, on the expiry of a lease, the erstwhile tenant, who remains a tenant at sufferance, would have no right to transfer.

84Copy pinpoint84. In this regard, we would have to hold that there is a new lease by holding over. The acceptance of the amount after the expiration of the lease by the respondent was without prejudice to its case. We do not think that the appellants can persuade us to hold that there is a lease by holding over.

85Copy pinpoint85. Therefore, it may not be appropriate to allow the appellant to raise the contention of limitation or to allow him to succeed on the same, based on the case falling under Article 51. This is, no doubt, despite noticing the averment in the plaint which appears to have been made with reference to Section 2(12) of the CPC. We would have to, however, bear in mind the principle laid down in Atmaram (supra) and the principles 23 (1972) 1 SCC 388 H

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A we have already considered. We are of the view that landlord by the suit seeks to realise, what in law is described as damages for unauthorised occupation by the tenant after the expiry of the lease. It is not to be conflated to the profits received within the meaning of Article 51 of the Limitation Act, as it involves finding out the rate at which the landlord could have let out the premises. It would be the residuary Article, namely, B Article 113, which should apply.

86Copy pinpoint86. The result would be that, in the factual context, it may not be possible to hold that the suit filed by the respondent, should still be found to fall under Article 51 of the Limitation Act and barred as regards part of the cause of action. C

87Copy pinpoint87. The upshot of the above discussion is that, we find no merit in the appeals. The appeals shall stand dismissed. The parties to bear the respective costs.

D Divya Pandey Appeals dismissed. (Assisted by : Rahul Kumar, LCRA)