Waiver of Forfeiture

The waiver is an intentional relinquishment of a known right or such conduct as warrants an inference of the relinquishment of such right.[1] It was also held in Surendra v. Smt. Panchi Bibi that the foundation of waiver is the knowledge of the person who said to waive his rights and there cannot be a waiver in ignorance. Unless, therefore, the lessor is aware that forfeiture has been incurred there cannot be any question of waiver of forfeiture. In the ultimate analysis on the juristic foundation, the concept of waiver is in essence based on agreement. In other words, the landlord must agree to waive the forfeiture or more accurately the breach of the expressed conditions which leads to forfeiture as provided under section 111 of TPA, 1882.

Waiver of Forfeiture:
Sec 112 enacts that a forfeiture incurred under Sec 111(g) could be waived in any of the following:-

(1) By Acceptance of rent accrued due after the forfeiture was incurred, but if it is accepted after the institution of an ejectment suit against the lessee it is no waiver.

(2) By distress for rent accrued due after the forfeiture was incurred

(3) By the lessor doing an act showing an intention to treat the lease as subsisting.
Provided, that the lessor was aware of his rights that the forfeiture was incurred.

(1) Acceptance of Rent

A forfeiture incurred u/s 111 (g) is waived by the lessor or his agent had a general authority to receive rent[2] accepting rent accrued due after the forfeiture has been incurred. But acceptance of rent after the institution of a suit to eject lessee on the ground of forfeiture is no waiver. The election to forfeit is complete and irrevocable once the suit for ejectment is instituted. The acceptance of rent after the determination of the lease would not amount to waiver since the payment of rent by a statutory lessee does not amount to lease money in the true sense of rent but it is a statutory solatium which a lessee is required to pay to the landlord, there is no element of contractual liability. Therefore, in W. Suryabhan v. Maharashtra Revenue Tribunal, Nagpur, where the landlord recovers the rent from statutory lessee after obtaining an order of termination of the lease under Berar Regulation of Agricultural Leases Act, 1951, it was held that there is no waiver of his right to obtain the possession of the land. The institute of the suit is simply a mode of manifesting the possession of the land.[3] On re-admission after determination of the tenancy upon the forfeiture the old tenancy is not revived. The lessee is bound to pay compensation for use and occupation of the immovable property in the subject matter.[ Chengiah v. Damara, (1913) 24 MLJ]

Also, the waiver of the past breaches does not preclude the lessor from enforcing forfeiture when the same or any other condition is subsequently broken, the condition breach aids with re-entry.

The rent accepted which is pleaded as a waiver under Sec. 112, T.P. Act, must have accrued after the date of the forfeiture and not prior to it. (provided under section 112 of TPA, 1882)[4]

(2) Distress for Rent: -Forfeiture is waived by distress for rent due since the forfeiture. In case of a continuing forfeiture as for non-repair, there is no waiver after the time of distress. Distress is regulated by the Presidency Small Causes Courts Act and not by the usual jurisdiction of the local court.

However, proviso 1 of the Sec.112 lays down that no waiver is operative unless the lessor waives with the knowledge that the forfeiture has been incurred. The onus would be on the lessee to prove knowledge of the lessor. Similarly, the Proviso 2 expressly says that where rent is accepted after the institution of a suit to eject lessee on the ground for forfeiture, such acceptance is not a waiver. In case of State v SS Devi, it was held that he rent claimed for the period subsequent to the forfeiture in a suit for eviction on the ground of forfeiture can be accepted by the landlord only after the institution of the suit. It was further laid down that if the acceptance itself does not amount to waiver, the mere claim acceptance in respect whereof can take place only after the institution of the institution cannot be said to be under the mischief of the clause ‘any other act on the part of the lessor showing an intention to treat the lease as subsisting’ in Sec112. Once the election to forfeit is complete and irrevocable the institution of the suit, claim for rent cannot be waived]

There is an exception to the general rule. The section provides that acceptance of rent due after a forfeiture has been incurred is not waiver if it is accepted after the institution of a suit.

(3) Scope:  -An act of forfeiture on the part of the tenants as contemplated by Cl. (g) of sec 111 of the Act only renders the lease voidable at the option of the landlord. The landlord, after such forfeiture has taken place by the happening of any of the event specified in Cl. (g) of the Sec 111, is obliged to make an election as soon as he becomes aware of the tenant’s default either to forfeit the lease or alternatively to treat the lease as still continuing by waiving the act of forfeiture. Essentially, the rule of waiver of forfeiture is designed to prevent the landlord from taking two consistent positions. He cannot be allowed to both approbate or reprobate. But if he chooses to do something such as demanding or receiving the rent which can only be so consistent with the existence of continuance of lease or tenancy he cannot thereafter be heard to say that he has elected the forfeiture. The waiver of a right to forfeit is to be treated as an aspect of the wider doctrine of election. However, Halsbury has observed that a landlord does not waive the forfeiture by merely standing by and seeing it occur where, for instance, the tenant makes alterations in breach of covenant and the landlord does not interfere; there must be some positive act of waiver.[Held in the case of Rambux v. Sohanlal, 1961 RLW 623][5]

(4) Determination of lease by Notice to Quit: -Sec 111(h) talks about the determination of lease by notice to quit. A lease may be terminated by a notice to quit given by the lessor, or of his intention to quit given by the lessee. A lease may be terminated on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to another. In other words, a tenancy at will is terminated by demand for possession. A tenancy for a fixed term determines on the expiration of the term. A periodic tenancy, however, is terminated only by proper notice to quit. Since notice is a unilateral act performed in the exercise of a contractual right, it must conform to the terms of the contract; and the onus of proof of its validity is upon the person who gives it.[ Lemon v. Lardeur, (1946) 2 All ER 329]

(5) Waiver of Notice to Quit: -According to Section 113 of the Transfer of Property Act, 1882; a notice to quit is waived with the implied or express consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting.

Principle

Once a valid notice is given, the tenancy will be determined upon its expiration. The parties can waive the notice. The consent of the parties makes a new agreement. The parties can nullify the operation of the notice as to quitting, by agreeing upon a new tenancy, whether on the terms of the former or not, to commence from the time of its expiration. However, the tenant has to establish that the rent taken by the landlord was legal to rent indicating his assent to the former’s continuing in possession. [Mohan Lal Goela v. Siri Krishnan, AIR 1978]

A waiver of notice to quit cannot be merely inferred by an act on part of one of the parties and either one of the actions or any act which thereby does not spell a contract or agreement between the parties to a particular effect spelling a waiver. Waiver essentially presupposes an election by the landlord and also on the part of the tenant where the tenant consents to the notice being waived. An election is not a matter of inference but is a matter of positive choice. Hence an election should not be merely inferred from the circumstances that after the institution of the suit for the ejectment, payment was received by the landlord.[ Ramjilal v. Gulabrao, AIR 1979]

Section 113 would come into picture only when there is an act on the part of the lessor showing an intention to treat the lease as subsisting. There could not be any occasion for the landlord to show such an intention when he has already filed a suit on the basis of the termination of tenancy. In such a case, it is the suit that has to be decided and mere payment of some amount of rent would be irrelevant, unless a party pleads and proves that on account of the said payment, there was a compromise of the suit[ Hashmatrai v. Tarachand, AIR 1979 BOM 95]

Detailed Explanation of the section

 According to the section, once a valid notice to quit has been served it automatically brings the tenancy to an end on the expiration of the notice and cannot be withdrawn or waived. After a valid notice to quit has been served, however, the landlord and the tenant may expressly or by implication for the grant of a new tenancy to take effect on the expiry of the notice.[ Waman v. Maharashtra Revenue Tribunal, AIR 1970]
Questions of waiver usually arise when some act is done by the landlord after the expiration of the notice, which either necessarily or prima facie imports the recognition of an existing tenancy.[6]Where a landlord has instituted a suit pursues it in spite of receiving rent, there is no question of waiver, although he may not specifically call it compensation for use and occupation and may inaccurately call it to rent [Narain Singh v. Amarsingh, 1960]
The payment of the rent by the tenant for a period subsequent to the termination of the tenancy and acceptance of the same has been laid down as a statutory proof of the intention of both the parties to treat the lease as subsisting. Undoubtedly, it is one of the modes of proof of the agreement to treat the lease as subsisting. But the amount is paid as rent and received as such.[7]
In order to constitute a waiver, the two ingredients must exist concurrently. Otherwise, the act of acceptance of rent by itself without reference to the intention of the lessor cannot be deemed to be a waiver. In addition to the receipt of the rent by the landlord to establish waiver, there should be other conclusive evidence to show that the landlord is inclined to treat the lease as subsisting.[8]

The notice can be waived by the mutual consent of the lessor and the lessee. The consent of the lessee can be given expressly or by implication, it can be inferred and the intention on part of the lessor to continue to treat the lease as subsisting can be shown by any act of the lessor. The acceptance of rent expiry of the notice by itself may not constitute a waiver. But it is an act on the part of the lessor which will go to show the intention on his part to treat the lease as subsisting. If after the service of notice landlord accepts rent Section 113 of the Act will be attracted and therefore waiver of forfeiture is exercisable. (Dr. G. P. Tripathi, The Transfer of Property Act)

The acceptance of rent subsequent to the filing of the suit will not operate as a waiver in the usual course. There is no warrant for the view that mere receipt of rent, whatever may be the intention of the lessor, should be of its own force, divorced from the circumstances of the case, be regarded as amounting to a waiver.[ Purohit v. Venkata Ramachandra Murty, AIR 1976]

Scope of the Section

if after determining the tenancy by notice the landlord chooses to accept rent again from the tenant, a notice for determination of the lease already given by the landlord to the tenant will be deemed to have been waived. No question of waiver arises after the landlord has brought a suit on the basis of a valid notice given for the determination of the lease, though it is always open for the landlord to renew the lease at any time he pleases.[9]
Section 113 clearly indicates that there should be an indication on part of both lessor and lessee. In order to determine the question of waiver of a notice to quit, it is necessary to find out from the conduct of the landlord, whether the lease is intended to be treated as subsisting or not.[10]

Applicability

Section 113 of The Transfer of Property Act, 1882 can hardly come into play in the case of a statutory tenant, that is, a person who is entitled to remain in possession of the premises by virtue of the provisions of a Rent Control Act. Section 113 is restricted to a notice given under Section 111(h) of The Transfer of Property Act, 1882, namely, the consequences of waiving a notice to determine the lease or to quit the property. However, in the case of a statutory lease, he is bound to pay the amount of lease money not only till the statutory lease comes to end by an order of the Court but until possession is given. The right being created by statute, the corresponding obligation to pay the statutory rent until possession is delivered is implicit in such a situation. (by a judicial interpretation by courts)[11]

Impact of Rent Control Legislation

The Rent Restriction Act creates a kind of statutory tenancy with certain incidents not to be found in ordinary relation of landlord and tenant. Under such an Act a tenant includes which under the ordinary law of landlord-tenant is an ex-tenant. In an English decision,[12] it is made clear that the tenant governed by the Rent Restriction Act continues to be in possession even after the notice to quit and if the tenant pays rent, the landlord has no choice but to accept it and cannot sue for trespass or for mesne profits because it is provided in The Transfer of Property Act, 1882, that notwithstanding notice to quit the tenant cannot be treated as a trespasser so long as he pays rent and performs other conditions of the lease.[45]

In case of Joint owner, a joint notice of demand relating to a joint tenancy by the two co-landlords could not be waived by a single landlord. In Chhangur Ram v. Ganesh[46], it was observed that a waiver to be effective or binding must be made by the entire body of the joint owners and it was not open to one of the joint owners to waive such notice

Conclusion: In order to conclude, after having a detailed look on the determination of lease by way of forfeiture or by way of notice to quit and also the provisions related to their forfeiture as specified in Sec 112 and 113 of the Act, it can be clearly inferred that if there is a breach of condition by the lessee, the lease is not determined ipso facto but it gives an option to the lessor to elect whether he would determine the tenancy or not. This is so because of the policy of the courts that is to lean against forfeiture and therefore if the lessor with full knowledge that the forfeiture has incurred, acknowledges the continuance of the tenancy, he will be deemed to have waived the forfeiture. The Intention to waive forfeiture implies that the person waiving it is aware of the fact that there has been forfeiture.

Similarly, in order to constitute a waiver of notice to quit, the tenant has to prove that the landlord, by accepting the sent for the period subsequent to the termination of tenancy, had an intention to treat the lease as subsisting. However, in the absence of any such intention on the part of the landlord being proved, mere acceptance of rent during the pendency of the ejectment suit cannot amount to waiver. Moreover, there is a distinction between the two sections that is prima facie evidence from the bare perusal of the sections i.e. the forfeiture can be waived without the consent of the lessee, whereas in a waiver to notice to quit the consent of the lessee is necessary.

 

[1] Rambux v. Sohanlal, 1961 RLW 623 at p. 626

[2] Doe d Thompson v. Davis, (1847) 10 LTOS 108

[3] Serjeant v. Nash, field & Co., (1903) 2 KB 304

[4] Haib Ahmad v. Reoti Kuer, AIR 1946 All 328

[5] Halsbury Laws Of England, 4th Ed., Vol. 27, para 429

[6] 23 Halsbury (Salmond), 527

[7] B. K. Narayana v. Subba Rao, 1958Mys LJ 134 at p.138

[8] Muthu, M v. Arulmigu Sundareswararswamy Devasthanam, 2001 (1) CTC 438 at p.44

[9] Moti lal basant lal, AIR 1956 All 175 at p.177

[10] Sailabala Dassee, Smt. v. HA Tappassier, AIR 1952 Cal 455 at p. 462

[11] Waman Suryabhan v. Maharashtra Revenue Tribunal, Nagpur, AIR 1970 Bom 167 at pp. 170, 71

[12] Davis V. Brislow(1920)3 KB928

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