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by sayum
15 January 2026 7:14 AM
“Once Tenancy Is Validly Terminated, Occupation Becomes Unauthorised Under Section 2(g) Of Public Premises Act” – In a significant ruling that reinforces the primacy of statutory notice provisions over expired lease terms, the Bombay High Court setting aside the appellate order that had reversed an Estate Officer’s eviction and damages decree under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.
Justice Gauri Godse, presiding over the matter, held that a tenancy that continues after expiry of a written lease without a renewal becomes a month-to-month tenancy under Section 116 of the Transfer of Property Act (TP Act), and is terminable by a 15-day notice under Section 106 TP Act.
“The ninety-day termination clause in the initial lease deed, which expired at the end of the lease term, shall not apply. Therefore, the tenancy is rightly terminated by a fifteen-day notice under Section 106 of the TP Act,” the Court observed, rejecting the appellate court’s finding that the notice of termination was invalid for not complying with a contractual 90-day period.
“Occupation Becomes Unauthorised From Expiry Of Notice Period After Valid Termination”
The High Court reinstated the Estate Officer’s order dated 5th March 2008, which had directed eviction and awarded damages of ₹6,900 per month along with 9% simple interest for unauthorised occupation from 1st May 2001 till 23rd March 2023, the date when possession was handed over.
The court relied heavily on Section 2(g) of the Public Premises Act to define “unauthorised occupation” and applied the standard principle of lease termination under Section 111(h) read with Section 106 of the TP Act.
“As per Section 2(g) of the said Act, the occupation is unauthorised after the authority under which the occupation was allowed has been determined for any reason whatsoever,” the Court held. “Therefore, once the termination as per the notice under Section 106 is held valid, the respondent’s occupation would be rendered unauthorised.”
From Lease to Legal Limbo
The dispute involved a small cabin premises on the mezzanine floor of "Oriental House" owned by the applicant (Oriental Insurance Co. Ltd.), let out originally on 1st June 1970 for three years to D.J. Shukla & Co. under a formal lease deed.
However, no fresh lease agreement was executed post expiry in May 1973, and the respondent continued in possession on monthly rent, with occasional revisions over time.
In March 2001, alleging rent default and unauthorised change of user (from office to godown), the applicant issued a termination notice dated 13th March 2001, giving 15 days to vacate. The respondent challenged this, asserting that the original lease deed stipulated 90 days' notice, and that they had paid all arrears, which should be treated as a waiver of forfeiture under Section 112 TP Act.
High Court: “No Fresh Lease, No Application of 90-Day Clause”
Justice Godse clarified that in absence of a registered renewal, the lease stood terminated by efflux of time under Section 111(a) TP Act, and continued occupation was governed by Section 116 (holding over). Consequently, Section 106 TP Act applied.
“In such contingency, in the absence of an agreement to the contrary, the lease would be renewed from year to year or from month to month… Therefore, such lease can be terminated on expiration of a notice under Section 106 read with clause (h) of Section 111,” the judgment held.
The Court dismissed the appellate court’s reliance on the original lease clause mandating 90 days’ notice, stating that once the lease expired, such contractual stipulations ceased to operate.
No Waiver of Forfeiture in Absence of Re-entry Clause: Section 112 Not Applicable
The appellate court had also erroneously held that acceptance of arrears of rent without protest amounted to waiver of forfeiture under Section 112 TP Act.
Justice Godse ruled that Section 112 has no application, as there was no forfeiture under Section 111(g) (which requires a specific clause of re-entry), and that the lease was terminated under Section 111(h) by notice.
“Clause (g) of Section 111 will not attract in the present case. Hence, waiver of forfeiture under Section 112 would not apply. Thus, determination of lease… is under clause (h) of Section 111.”
This clarification resolves a common misunderstanding in landlord-tenant disputes regarding the applicability of forfeiture and waiver doctrines, especially in public premises governed by statute.
Damages Awarded: Unchallenged Quantification Must Be Upheld
The Estate Officer had earlier accepted the applicant’s claim for damages at ₹6,900 per month with 9% simple interest, and this was not rebutted by any evidence from the respondent.
The appellate court had reversed the damages order only on the basis of invalid termination. Once that finding was overturned, the High Court held the quantification must stand.
“No reasons are recorded by the appellate court to disbelieve the applicant’s evidence on the quantification of damages… the findings recorded by the estate officer in quantifying damages based on the evidence on record must be upheld.”
Revision Jurisdiction: “Findings Were Perversely Reached; Interference Justified”
Exercising its powers under Section 115 CPC, the Court found jurisdictional error in the appellate order, stating that the court had misapplied settled principles of lease law and failed to consider statutory provisions governing public premises.
Relying on the Supreme Court’s decision in Babulal Agrawal v. Food Corporation of India, the High Court reaffirmed that in absence of a fresh lease, monthly tenancies are terminable under Section 106 TP Act, and that public premises laws override ordinary property disputes in such cases.
With this ruling, the Bombay High Court has not only clarified the legal standards governing termination of tenancies in public premises, but has also fortified the enforceability of statutory rights over expired contractual clauses.
“Once tenancy is validly terminated by a 15-day notice as per Section 106 TP Act, and no fresh lease is executed, the occupation becomes unauthorised under the Public Premises Act,” the Court firmly held.
The decision serves as a guiding precedent for public sector landlords, reinforcing the legal architecture that allows them to evict unauthorised occupants through Estate Officer proceedings, even years after expiry of a lease.
Date of Decision: 5 January 2026
