Landlord Entitled to Recovery of Possession, Arrears of Rent, and Damages for Unauthorized Occupation: Madras High Court

Termination Notice Under Section 106 of the Transfer of Property Act is Valid Once Lease Expires - Madras High Court granted relief to the plaintiff, a registered Sangam, in a landlord-tenant dispute. Justice Dr. G. Jayachandran allowed the suit, directing the defendant to vacate and hand over possession of a marriage hall and return movables leased by the plaintiff. The court also awarded arrears of rent amounting to ₹2,17,000/-, damages of ₹1,50,000/- per month for unauthorized occupation, and interest at 6% per annum on arrears until realization.

"The Plaintiff Proved Ownership And Entitlement To Possession, While The Defendant Failed To Justify Continued Occupation"
The plaintiff, Chennai Otteri Vattara Nadar Sangam, sought recovery of possession of the marriage hall (referred to as the ‘A’ schedule property) and movables, such as furniture and utensils (the ‘B’ schedule properties). The plaintiff alleged that the defendant, Mr. Kasirajan, had failed to pay fair rent fixed by the Rent Control Tribunal and had refused to vacate despite termination of tenancy under Section 106 of the Transfer of Property Act, 1882.

The court observed: “The plaintiff has adequately proved ownership and entitlement to possession through oral and documentary evidence, including the rental agreements (Ex.P3 to Ex.P7) and receipts (Ex.P8 and Ex.P9). The defendant admitted tenancy but failed to produce any evidence to prove payment of rent after May 2021 or justify continued possession of the premises.”

The plaintiff constructed the marriage hall in 1989 and leased it to the defendant in 2005 through separate agreements for the building and movables. The lease was periodically renewed until 2010. After the lease expired, the defendant continued occupying the premises, claiming an oral agreement extended the lease. However, he defaulted on paying fair rent fixed at ₹1,00,000/- per month by the Rent Control Tribunal in 2012.

The plaintiff initiated Rent Control proceedings to recover possession and arrears of rent. While the Rent Control Tribunal ordered eviction, the defendant succeeded in appellate proceedings on the ground that the lease was a "composite lease" (building and movables), rendering the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 inapplicable. Consequently, the plaintiff issued a termination notice under Section 106 of the Transfer of Property Act and filed the present civil suit.

"The Defendant's Conduct Shows An Intent To Protract Litigation Without Paying Rent"
Justice G. Jayachandran, noting the defendant’s repeated procedural delays, stated: “The defendant sought adjournments, failed to produce documents, and delayed cross-examination of the plaintiff’s witnesses despite multiple opportunities. This conduct amounts to an abuse of process and an intent to occupy the premises as long as possible without paying rent.”

The court rejected the defendant’s applications to reopen and recall evidence, emphasizing: “The applications are devoid of merit. The defendant’s explanation of being disturbed by personal issues cannot justify prolonged delays, especially when he has failed to deposit even the admitted rent of ₹21,000/- per month since the filing of the suit.”

"Termination Notice Valid And Fair Rent Fixed Earlier Is Justifiable As Damages"
The court held that the termination notice issued under Section 106 of the Transfer of Property Act was valid and observed:

“The notice informing the defendant that the tenancy would end on 31.01.2022 was duly served and replied to by the defendant. After termination, the defendant has no right to continue possession without justification or payment of rent.”

The court also relied on the Rent Control Tribunal’s earlier fixation of fair rent at ₹1,00,000/- per month, accepting it as reasonable damages for unauthorized occupation of the building. An additional ₹25,000/- was awarded for the use of movables.

Justice Jayachandran dismissed the defendant’s argument that damages of ₹1,50,000/- per month were excessive, stating: “The judgment in R.C.O.P.No.2500 of 2012 fixing fair rent at ₹1,00,000/- per month supports the plaintiff’s claim. The defendant, who has failed to pay rent since June 2021 and has not justified continued occupation, cannot contest the reasonableness of damages.”

The court found that the defendant’s denial of arrears of rent was unsupported by evidence: “The defendant failed to produce any documents to show payment of rent. On the contrary, Ex.P29 and the testimony of PW-1 confirm that rent has not been paid since June 2021.”

Allowing the suit, the High Court directed: The defendant must vacate the premises and return the movables immediately.
The defendant must pay ₹2,17,000/- as arrears of rent for the period from 01/06/2021 to 10/04/2022, with interest at 6% per annum from the date of filing the suit until realization.
The defendant is liable to pay ₹1,50,000/- per month (₹1,25,000/- for the immovable property and ₹25,000/- for the movables) as damages for use and occupation from the date of the suit until delivery of possession.
Costs of the suit were also awarded to the plaintiff.
Justice Jayachandran emphasized: “The plaintiff, being the owner of the building and movables, is entitled to recover possession and damages for prolonged unauthorized occupation. The defendant, having exhausted all remedies, cannot continue to deprive the plaintiff of rightful rent or possession.”
 

Date of Judgment: January 21, 2025