TP Act Enables Oral Lease; Requirement Of Registered Agreement Under 2017 TN Act Not Of Universal Application: Madras High Court

Answering a set of questions pertaining to the diverging scenarios that might occur in the eviction of tenants under Tamilnadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017, Madras High Court has held that legal recourse on oral tenancies after the commencement of the Act can be availed only through civil courts and not the rent courts under the new act.

Justice R. Subramanian observed that the civil revision petitions that have come up before him, since the rent courts rejected all of them by citing the issue of maintainability, can be broadly classified into six types. The rent courts deemed all of these petitions as not maintainable by observing that there is no registered written agreement of tenancy in all six cases which are as follows:

i. Written tenancy created prior to and expired prior to the commencement of the Act (Tenant holding over under an oral tenancy);

ii. Oral tenancies created prior to the New Act and no written agreement entered into;

iii. Written tenancies created prior to the New Act and the period expired after the commencement of the Act.

iv. Written tenancies entered after the commencement of the New Act not registered but subsisting;

v. Written tenancies created after the commencement of the New Act and had presently expired (either registered or unregistered)

vi. Oral tenancies created after the New Act

Before addressing each of these scenarios, the court observed that Section 34 of the New Act requires the court to take into account the provisions of the Transfer of Property Act, 1882, the Indian Contract Act 1872, or any other substantive Law applicable same as in a hypothetical situation where such dispute was brought in front of a regular civil court for adjudication. The court referred to Section 34 specifically since Section 40 of the Act places a bar on the jurisdiction of civil courts if it comes within the purview of the New Act. Similarly, rent courts are restrained from ascertaining the issue of title and ownership of property in question.

The court observed that the requirement of a registered instrument of lease in order to enable creation of a landlord-tenant relationship as given in Section 4(2) of the New Act 'cannot be said to be universal in its application'.

"...Therefore, a suit or proceeding which falls outside the provisions of the New Act are not barred. The scope of a bar created under a special enactment was considered by a Full Bench of this Court in Periyathambi Goundan v. The District Revenue Officer,Coimbatore and others, reported in 1980 (2) MLJ 89, wherein the Full Bench had held that the scope of the bar are interdict imposed by a provision of law must be strictly construed and the Court must ascertain the extent of the interdict imposed by the provision of the statute and limit the interdict to that extent alone."

"As far as the first three contingencies are concerned, it can straight away be concluded without much difficulty that all of them will be covered by Section 4(2) and its proviso. Thus the landlord would have the right to invoke Section 21(2)(a) of the New Act, in respect of contingencies 1 & 2 and all other clauses of Section 21(2) in the respect of the third contingency to seek eviction of such tenants where the agreement expired after the commencement of the New Act. This is for the reason that the predecessor enactment recognised oral tenancies and the general law namely the Transfer of Property Act also recognised oral tenancies."

Considering the above, rent courts were directed to admit the three petitions that fall under the above three contingencies and they were instructed to disposed off soon.

In case of written unregistered subsisting tenancies after the commencement of the Act, Justice R Subramanian held that the litigant would have to seek recourse of seeking eviction under the Transfer of Property Act.

On the fifth category of cases, the court referred to Section 5(3) of the new Act wherein a tenant can be considered to be a tenant holding over only for a period of six months from the date of expiry of the lease and not afterwards. Therefore, the court opined that,

"...The effect of Section 5(3) is that a tenant who continues in possession after the expiry of the lease period is deemed to be a tenant for a period of six months within which he could either renew the lease or enter into a fresh lease. The remedy available to a landlord against such tenant, who continues in possession after the expiry of the lease, would depend on the time at which the landlord decides to seek eviction."

The time at which the landlord seeks eviction can be either of the following in such a circumstance: i) demanding possession at the end of the tenancy and the tenant refusing to vacate, ii) demanding possession within the period of six months during which the tenancy is deemed to continue, and iii)no demand by the landlord even after the expiry of six months.

In the first subcategory from the fifth category of cases, Section 5(3) was again referred to from where it can be inferred that a tenant ceases to be one when the period of six months expire. When that's the case, the landlord will have to resort to general law and sue for recovery and eviction. If the eviction is sought within the six months when the tenancy continues, the landlord can place reliance on all the subclauses except clause (a) [unregistered tenancy agreement] in Section 21 of the New Act.

In the third scenario within the fifth category, it's already established that the tenant ceases to be one at the expiry of six months regardless of the landlord demanding eviction or not. If that's the case, the landlord can sue for ejectment in front of a civil court under the regular law after determining tenancy.

In any of the scenarios within the fifth category, if the document is not registered, the landlord has no option but to approach the civil court under the Transfer of Property Act.

In the sixth category which talks about oral tenancies after the commencement of the New Act, the landlord cannot avail fast track eviction proceedings in the rent court; he will have to take the help of the Transfer of Property Act again.

Therefore, the court concluded that the rent courts were right in dismissing the petitions that falls under fourth, fifth and sixth categories. The landlords therein will be at liberty to seek eviction under general law.

Case Title: S. Muruganandam v. J. Jospeh & Other Connected Matters

Case No: CRP.No.3056 of 2021 & Others

Citation: 2022 LiveLaw (Mad) 63

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