Mere Agreement To Sell The Leased Property To Tenant Would Not Terminate Landlord-Tenant Relationship: SC [Read Judgment]

Mere Agreement To Sell The Leased Property To Tenant Would Not Terminate Landlord-Tenant Relationship: SC [Read Judgment]

“If the parties really intended surrender their tenancy rights as contemplated in clauses (e) or (f) of Section 111 of the TP Act while entering into an agreement to sell the suit house, it would have made necessary provision to that effect by providing a specific clause in the agreement. It was, however, not done.”

The Supreme Court observed that mere agreement to sell the property of the landlord to the tenant would not result in termination of landlord-tenant relationship between the parties unless there is a stipulation in the agreement itself to that effect.

In Dr. H.K. Sharma vs. Shri Ram Lal, while upholding the high court judgment in favour of landlord, the supreme court considered this issue: When the lessor and the lessee enters into an agreement for sale/purchase of the tenanted premises where the lessor agrees to sell the tenanted premises to his lessee for consideration on certain conditions, whether, as a result of entering into such agreement, the Jural relationship of lessor and the lessee in relation to the leased property comes to an end and, if so, whether it results in determination of the lease.

The bench comprising Justice Abhay Manohar Sapre and Justice Dinesh Maheshwari, referring to the agreement for sale between landlord and the tenant, said that, none of the conditions provided as to what would be the fate of the tenancy. It said that none of the conditions set out in the agreement could be construed for holding that the parties intended to surrender the tenancy rights.

Referring to the provisions of Transfer of Property Act, the bench said: "A fortiori, the parties did not intend to surrender the tenancy rights despite entering into an agreement of sale of the tenanted property. In other words, if the parties really intended surrender their tenancy rights as contemplated in clauses (e) or (f) of Section 111 of the TP Act while entering into an agreement to sell the suit house, it would have made necessary provision to that effect by providing a specific clause in the agreement. It was, however, not done."

The bench, upholding the high court judgment, observed that the landlord entitled to file an application against the appellant (lessee) under Section 21 (1) (a) of the UP Act and seek the appellant's eviction from the suit house after determining the tenancy in question.

On the issue of bonafide need, the bench said: "We find no good ground to interfere in the finding for the reason that the respondent being a landlord and a retired man has every right to live in his house with his family."

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