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Shavakshaw Dinshaw Davar Vs. the Motor Union Insurance Co. - Court Judgment

LegalCrystal Citation
SubjectTenancy;Contract
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 35 of 1923 and Suit No. 4300 of 1921
Judge
Reported inAIR1924Bom295; (1923)25BOMLR1313; 84Ind.Cas.953
AppellantShavakshaw Dinshaw Davar
RespondentThe Motor Union Insurance Co.
DispositionAppeal dismissed
Excerpt:
.....to enable the plaintiffs to have the premises for an aggregate period of ten years. the standard rent of the premises was rs. 225 a month ; but it was stipulated that the plaintiffs should pay a further sum of rs. 2275 to the defendant every month for the aforesaid period of ten years. the plaintiffs having sued for specific performance of another agreement between the parties, the defendant counter-claimed specific performance of the above agreement and recovery of rs. 2,73,000 as damages for breach of the agreemeat:-; that the counter-claim of the defendant for damages was bad in law as it contravened the provisions of section 8 of the bombay rend (war restrictions) act 1918. - - it appears, however, that the plaintiffs were not satisfied with the premises in the tamarind lane, and..........for his trouble in securing the premises to the plaintiffs.2. the defendant contested the plaintiffs' claim in the suit and made a counter-claim in respect of his agreement with them in respect of the nawab building. he claimed specific performance of the agreement contained in the letters to which i shall presently refer, and for damages and compensation as may be just for breach of the agreement. he claimed rs. 2,73,000 as representing the proper damages payable to him.3. the plaintiffs filed their written statement in reply to the counter-claim of the defendant; and when the suit came on for hearing twenty-five issues were raised as representing the various contentions between the parties.4. the correspondence between the parties with reference to the lease of the premises in.....
Judgment:

Lallubhai Shah, Kt., Acting C.J.

1. The facts which have given rise to this appeal are briefly these:

It appears that the plaintiffs who are a limited Company were in need of premises for their office in 1920, as they were under an obligation to leave the premises which they had been occupying then. They obtained a lease of certain premises in the Tamarind Lane in 1920 but the lease was executed in August 1920. Subsequently the defendant in this case agreed to take up these premises from them. It is not necessary to set forth v the facts about this lease in detail; but owing to certain differences between the parties in respect of the agreement as regards the lease of the premises in the Tamarind Lane, the plaintiff's. filed the present suit against the defendant in which they claimed various reliefs against the defendant with reference to that agreement. It appears, however, that the plaintiffs were not satisfied with the premises in the Tamarind Lane, and the defendant was in a position to secure to them suitable premises in the 'Nawab Building' on the Hornby Road. With reference to that there was correspondence between the parties, and as a result of that correspondence, there was an agreement between the parties to the effect that the defendant was to procure to the plaintiffs the lease. for occupation of the premises in the 'Nawab Building' which were at the time occupied by the Central Bank of India, Limited. In substance the defendant agreed to get those premises vacated by the bank and to secure the same for ten years to the plaintiffs in consideration of their paying the standard rent Rs. 225 per month and of their agreeing to pay Rs. 2225 per month for a period often years making a total of Rs. 2,73,000 to the defendant for his trouble in securing the premises to the plaintiffs.

2. The defendant contested the plaintiffs' claim in the suit and made a counter-claim in respect of his agreement with them in respect of the Nawab Building. He claimed specific performance of the agreement contained in the letters to which I shall presently refer, and for damages and compensation as may be just for breach of the agreement. He claimed Rs. 2,73,000 as representing the proper damages payable to him.

3. The plaintiffs filed their written statement in reply to the counter-claim of the defendant; and when the suit came on for hearing twenty-five issues were raised as representing the various contentions between the parties.

4. The correspondence between the parties with reference to the lease of the premises in the Tamarind Lane and of the Nawab Building is voluminous. The oral evidence in the case consists principally of the evidence given by the defendant himself and certain other evidence relating to the premises in the Tamarind Lane. There were several issues relating to the premises in the Tamarind Lane.

5. The learned trial Judge allowed the plaintiffs' claim only to the extent of the amount of the standard rent which he fixed at Rs. 220 per month. The other reliefs claimed by the plaintiffs were disallowed. As regards the counter-claim of the ' defendant the learned trial Judge dismissed the claim.

6. From this decree the defendant has appealed. The plaintiffs have not appealed in respect of the claim made by them as regards the premises in the Tamarind Lane. At the outset I may Bay that in the appeal we are now concerned only with the counter-claim of the defendant arising out of the agreement between the parties with reference to the Nawab Building.

7. His Lordship dealt with the negotiations between the parties and proceeded : Undoubtedly according to the evidence there was a lease for three years by the owners in favour of Dr. Nicholson and he had sub-let the premises to the defendant. The first document is not on the record but the sub-lease in favour of the defendant, is Exh. 2 in the case. It appears from the evidence of the defendant that there was a document passed by him in favour of the Central Bank of India Limited, but that was not registered. Therefore in law he was a lessee of these premises from Dr. Niehokon from the date of the document Exh. 2, that is, from March 13, 1919. Thus at the date of the agreement in question between the parties he was undoubtedly a sub-lessee of the premises. It may be that he in his turn may have sub-let the premises to the Central Bank of India; but the rent bills were all prepared in his name at least from March 1,1921; and so far as the present record is concerned, it is clear that the defendant's position then was that of a sub-lessee from Dr. Nicholson of the premises.... Assuming, however, that the defendant was throughout ready and willing to perform his part of the contract and that there was a breach on the part of the plaintiffs, it seems to me that his present agreement is open to the objection based on the provisions of a. 8 of the Bombay Rent (War Restrictions) Act ( II of 1918). That section provides-' It shall not be lawful for any person, in consideration of the grant, renewal or continuance of a tenancy of any premises to require the payment of any fine, premium or any other like sum in addition to the rent.' In the present case it is clear that the rent to be paid for the premises was Rs. 225. The further sum to be paid to him is stated to be in consideration of the defendant's obligation as indicated in the first three paragraphs of the letter of April 8. That sura was Rs. 2,73,000. It is clear that if this payment is over and above the rent in consideration of the grant, renewal or continuance of a tenancy the agreement would be unlawful. It is urged on behalf of the defendant that Section 8 has no application to this case because the defendant has nothing to do with the premises, that he was a third party who undertook to take certain trouble for the plaintiffs in the way of securing a tenancy of certain premises, and that therefore the agreement is outside the scope of Section 8. In other words it is urged that the payment agreed upon was not in consideration of the grant, renewal or continuance of a tenancy of the premises, I am, however, unable to accept this contention. It is clear that he was a sub-lessee of the premises as I have already indicated at the date of the agreement. The documents in the case and the evidence of the defendant leave no doubt that he was a sub-lessee for a period of three years commencing from March 1919, and to the extent to which he agreed to assign his interest as lessee to the plaintiffs he agreed to grant a tenancy of the premises in question. Further, in agreeing to secure to the plaintiffs possession of the premises on payment of the rental of Rs. 225 per month, he agreed to continue or to secure the continuance of the tenancy which was to be granted to the plaintiffs by him. Section 8 does :not in terms refer to a land lord. Any person who enters into an agreement in consideration of the grant, renewal or continuance of a tenancy of any premises to require the payment of any premium or any other like sum in addition to the rent is within the scope of Section 8. Without expressing any opinion as to whether a person who is in no sense connected with the premises would be within the scope of the section or not, I am satisfied that a person in the position of the defendant with reference to the Nawab Building is undoubtedly one to whom the prohibition contained in Section 8 would apply. By whatever means or words the parties may attempt to disguise the fact, it is clear to my mind that this was only a device to get a rent of Rs. 2275 per month for the premises, of which the defendant was at that time a sub-lessee, and of which he expected to get a lease for a further period so as to make up a total period of ten years in addition to the standard rent. I am, therefore, of opinion that the learned trial Judge is right in his view that the agreement, so far as it related to the monthly payment of Rs. 2275 extending over a period of ten years, was unlawful.

8. In this view of the matter the last point which has been argued need not be further dealt with. I should find it extremely difficult to allow specific performance of an agreement under which the defendant, was to get a sum of Rs. 2,73,000 for securing a tenancy for ten years of the premises the monthly rental of which was Rs 225. It may be that during that year there was a great difficulty about securing premises; and the sum may not have appeared exorbitant to the party who was to receive it or the party who was in need of the premises may not have been able to resist the demand. But it seems to me to be really an exorbitant amount to be paid for the trouble which no doubt the defendants would have to take to secure the premises. I should find it difficult to allow specific performance of an agreement of this nature. But it is unnecessary to pursue this point further as with regard to the breach of the contract and the unlawful nature of the agreement, I am of opinion that the judgment of the trial Court is right.

9. We confirm the decree of the trial Court and dismiss the appeal with costs.

Crump, J.

10. I agree.


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