A covenant for renewal in a lease operates only upon strict performance of its conditions; absent proof of the mandatory prior notice and of a fresh lease on mutually agreed terms, the option to renew is not effectively exercised and no renewed lease arises. Specific performance of a renewal clause will be refused where the plaintiff has not proved readiness and willingness (Section 16(c), Specific Relief Act) or has delayed unreasonably in seeking relief after alleged breach. Concurrent findings of fact — particularly on whether conditions precedent were complied with, whether negotiations produced mutuality, and whether plaintiff was ready and willing — will not be interfered with in a second appeal unless a substantial question of law is shown.

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Second Appeal — Lease Renewal — Specific Performance — Conditions Precedent — Notice, Fresh Deed and Mutuality — Section 100 CPC — Concurrent Findings — Limitation to Substantial Questions of Law.
Where a registered lease contains an express covenant for renewal only upon (a) the lessee giving the lessor not less than three months’ prior notice of its desire to renew and (b) execution of a fresh lease on mutual terms, renewal is not automatic and must be proved by the lessee. Failure to establish compliance with such conditions precedent (no notice produced; no fresh deed executed; no mutual agreement proved) disentitles the lessee to specific performance of renewal. A lessee continuing in possession after efflux of the original term without satisfying the renewal conditions is in unauthorized occupation and liable to eviction. Relief of specific performance also requires proof of readiness and willingness; Section 16(c), Specific Relief Act, precludes specific performance where plaintiff fails to prove readiness and willingness. Concurrent factual findings by trial and first appellate courts which rest on proper appreciation of evidence do not give rise to a substantial question of law under Section 100 CPC and cannot be disturbed in second appeal.

RATIO DECIDENDI

1. A covenant for renewal in a lease operates only upon strict performance of its conditions; absent proof of the mandatory prior notice and of a fresh lease on mutually agreed terms, the option to renew is not effectively exercised and no renewed lease arises.

2. Specific performance of a renewal clause will be refused where the plaintiff has not proved readiness and willingness (Section 16(c), Specific Relief Act) or has delayed unreasonably in seeking relief after alleged breach.

3. Concurrent findings of fact — particularly on whether conditions precedent were complied with, whether negotiations produced mutuality, and whether plaintiff was ready and willing — will not be interfered with in a second appeal unless a substantial question of law is shown.

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ANALYSIS

Issues framed

1. Whether the lease expired by efflux of time on 01.09.2017, or was renewed as alleged by the lessee (plaintiff/appellant).

2. Whether the plaintiff was entitled to specific performance (renewal) and, if not, whether eviction and damages were properly decreed.

Evidence and factual findings

• The registered lease (Ex.A-1) contained Clause 4 requiring (i) a three-months’ prior notice by the lessee, and (ii) execution of a fresh lease on mutual terms. Both parties accepted the lease and its terms.

• The lessee/plaintiff claimed to have issued the required notice but failed to produce that notice in evidence; conversely, there was an Ex.A-2 letter from the lessor (or reply) showing negotiations but no consensus on rent/terms.

• The plaintiff filed suit for specific performance only after continuing in possession for some months post-expiry and after negotiations had evidently failed; the plaintiff also did not accept the rent demanded by the defendant. Trial and first appellate courts found no mutuality, no compliance with Clause 4, and absence of proof of readiness and willingness — conclusions supported by the record (non-production of alleged prior notice, admitted failure of negotiations, plaintiff’s conduct in asking dealer to vacate).

Legal principles applied

• Renewal is contingent, not automatic; the lessee must strictly comply with contractual preconditions. Where mutual terms are required, execution of a fresh deed is essential to give legal effect to renewal. (Distinction between mere holding over and an effective renewed lease.)

• Specific performance is discretionary; Section 16(c) bars relief where plaintiff fails to show readiness and willingness. Delay and inconsistent conduct (continuing in possession while not securing a fresh deed) weigh against equitable relief.

• Under Section 100 CPC, a second appeal is maintainable only on a substantial question of law — e.g., an open legal question, or where the courts below have disregarded settled law. Mere reappreciation of evidence or concurrent factual findings do not satisfy the test.

Application to the present case & outcome

• The appellant failed to prove the mandatory three-months’ prior notice and the existence of a fresh lease on mutual terms; negotiations broke down (rent demand of Rs.2,00,000 not accepted) and the plaintiff delayed filing suit. These facts justify refusal of specific performance and affirm the eviction/decree granted below.

• The High Court found no substantial question of law: the matters raised were essentially factual and involved appreciation of evidence and documents (recitals, notices, correspondence). Consequently, the second appeal was dismissed at admission; concurrent findings were held unassailable.