Lease – Right of lessees / sub-tenants to extension and renewal after expiry of initial lease period – Section 81B of MM Corporations Act, 1949
Judgment dated 3.11.2023 in W.P.No.1057 of 2020 Bhawarlal Parasmal Joshi Vs. Solapur Municipal Corporation & Ors with connected matters.
Leasehold rights – Right of lessees and their sub-tenants to extension or renewal of lease on expiry of initial lease period – Section 81B of MM Corporations Act, 1949
In 1967, Solapur Municipal Corporation had entered into arrangement for construction of Town Hall on its land by granting lease in favour of lessees for 50 years. The lessees had constructed the building with a hall for Corporation, shops / offices and had inducted sub-tenants.
On 19.12.2017 i.e. after expiry of 50 years the Corporation treated occupation of successors of lessees and their sub-tenants as unauthorised and eviction order dated 17.5.2018 was passed under Section 81B of MM Corporations Act, 1949. However, the successors of lessees and sub-tenants claimed right to renewal of lease.
In Municipal Appeals, the Principal District Judge held that the successors of lessees have right to seek renewal of lease and it was erroneously rejected. The eviction order was set-aside.
HELD, on consideration of the General Body Resolutions dated 13.12.1967, 29.12.1967 and Lease deed dated 4.1.1968, sub-tenancy was co-terminus with first tenure of the lease, no right to extension or renewal of the lease was created in favour of the lessees. They have limited right to becoming direct tenants of the Corporation by exercising first right.
