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The Secretary of State for India Vs. Volkart Brothers - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtMumbai
Decided On
Judge
Reported in(1928)30BOMLR1578
AppellantThe Secretary of State for India
RespondentVolkart Brothers
DispositionAppeal allowed
Excerpt:
.....act (i of 1877), section 17--specific performance of part of contract-cotenant for renewal of lease-specific performance of contract to renew (ease for a part of the demised premises.;the defendants obtained from the plaintiff in 1821 a lease of a plot of land measuring over four acres for ft term of ninety-nine years. the lease contained a covenant that the 'lease shall and may be renewed for a further term of ninety-nine years upon such terms and conditions as shall be judged reasonable.' in 1914, the defendants transferred their right in 3.34 acres of land to a club, which surrendered their interest to the plaintiff on the efflux of the term. the defendants having claimed renewal 1928 of the lease for 1.10 acres of land in their possession :;negativing the claim, that the..........respondents not being in possession of or entitled to the premises demised by the lease could not claim specific performance either for the whole of the premises included in the lease or in respect of the acres 110 in their possession on the ground that there could not be specific performance of a part of the contract.7. the learned judges who delivered their judgments on december 10, 1926, were divided in their opinions. venkatasubba j. agreed on both points with the district judge, but krishnan j. was of opinion that the covenant of renewal was indivisible and could not be enforced. in view of this difference of opinion an order of reference of both appeals was made to the chief justice, who gave his opinion on both points in favour of the respondents and decrees were made in both.....
Judgment:

Carson, J.

1. By an indenture of lease executed on June 6, 1821, and made between the United Company of Merchants of England, trading to the East Indies, of the one part, and one Francis Schuler of the other part, the said United Company demised a piece of land lying between the town of Cochin and the river in the province of Malabar, containing 253,700 square feet (acres 4. 10), unto the said Francis Schuler from the date thereof for the term of ninety-nine years, at the yearly rent of Pagodas 6 F. 27 C. 25. Amongst other covenants the lease contained one in the following terms:-

That he the said Francis Schuler, his heirs, executors, administrators or assigns fulfilling the covenants and agreements hereinbefore contained and on his part to be performed and yielding and paying at the end and expiration of the aforesaid term of ninety nine years into the said United Company, their successors or assigns, the full and just sum of 100 pagodas current money of Fort St. George, then this lease shall and may be renewed for a further term of ninety-nine years upon such terms and conditions as shall be judged reasonable.

2. The appellant is the successor in title of the said United Company, and by virtue of an assignments by the said Francis Schuler and diverse subsequent assignments and acts in law the whole of the property comprised in the lease became vested in the respondents in the year 1907. Subsequently, in the year 1914, the respondents as vendors granted to the Cochin Club the right, title and interest of the vendors in a portion of the said lands demised by the said lease, amounting to 3 acres and 34 c., for a sum of Rs. 18,461. The said lease expired by efflux of time on June 6, 1920, and at that date the respondents were in possession of acres 1.10 only of the lands demised, and the Cochin Club having previously surrendered to the appellant their interest, purchased as aforesaid from the respondents, are in occupation of the said 3 acres and 34 c. as tenants at will to the plaintiff.

3. On the termination of the said lease the appellant claimed possession from the respondents of the part of the property then remaining in their occupation and containing the 1 acre 10 c. already mentioned, and as such possession was refused commenced his suit on February 24, 1921 claiming possession of the same and mesne profits.

4. On the other hand, the respondents commenced their suit on October 31, 1921, claiming a declaration that they were entitled to a renewal for ninety-nine years of the term granted by the said lease as regards the whole of the property demised by the said lease (save a small portion which had been acquired by the Government of Madras) or, alternatively, as regards the part retained by the respondents and specific performance of the covenant for renewal.

5. By a decree of September 2, 1922, the appellant's suit was dismissed with costs by the District Judge of South Malabar, who decided that the respondents were entitled to claim a renewal in respect of the part of the property retained by them and not in respect of any other part. On the hearing, therefore, of the respondents' suit on February 1, 1923, a decree was made that the appellant should execute a renewal of the lease on the terms mentioned in the decree in respect of the part of the leasehold premises in the occupation of the respondents.

6. The appellant appealed to the High Court of Madras against both the said decrees, which were heard together on March 19, 1926, by Venkatasubba Rao and Krishnan JJ. There were two main points argued upon the appeals : (1) that the covenant was unenforcible for uncertainty, and (2) that the respondents not being in possession of or entitled to the premises demised by the lease could not claim specific performance either for the whole of the premises included in the lease or in respect of the acres 110 in their possession on the ground that there could not be specific performance of a part of the contract.

7. The learned Judges who delivered their judgments on December 10, 1926, were divided in their opinions. Venkatasubba J. agreed on both points with the District Judge, but Krishnan J. was of opinion that the covenant of renewal was indivisible and could not be enforced. In view of this difference of opinion an order of reference of both appeals was made to the Chief Justice, who gave his opinion on both points in favour of the respondents and decrees were made in both suits dismissing the appeals with costs, and against such decrees the present consolidated appeals have been preferred. The real point to be considered upon this appeal is whether the respondents can, under the circumstances, claim a renewal of the lease in respect of the small plot in their possession, the owners of the remainder of the demised premises not being parties to the suit or making any claim to Op State such renewal. It is true that the respondents claimed in the alternative to get a renewal of the whole plot, but all the Judges in both Courts were of opinion, and in that opinion their Lord-Sahips concur, that any such claim was, under the circumstances existing at the termination of the lease, untenable, and, indeed, Mr. Justice Krishnan states that the respondents' counsel conceded that his clients could not enforce a renewal of the whole plot, There is no cross appeal against the judgment on this point, and although the learned Counsel for the respondents at the hearing before this Board suggested that he might even then be permitted to present such an appeal, it is manifest that any such application could not be acceded to. Now the sole question of the claim for renewal of the lease in respect of a part is one that depends on the construction of the covenant already quoted from the lease. What was the covenant? It was clearly a covenant to renew the lease in question: 'then this lease shall and may be renewed, etc,' That must mean the lease as a whole, including the subject matter of the demise, which is the parcels as set out in the lease. Moreover, the lease is to be renewed 'upon such terms and conditions as shall be judged reasonable '-a provision which is plainly applicable to the premises as a whole and might easily vary if applied to specific portions held under varying conditions and circumstances. It was strenouely argued by the learned Counsel for the respondents that as the lessees under the lease were entitled to assign portions of the premises the covenant for renewal would attach to each asignee holding his part in physical severalty, but no authority for such a proposition in a claim for specific performance has been cited before this Board. This argument was mainly attempted to be supported by a reference to covenants which run with the land, but, as observed by Krishnan J.:-

Cases bearing upon the apportionment of rent or referiing to covenants for repaira are not, in my opinion, in point, as they are not part material with covenants to renew, which are covenants to create new rights.

8. The case mainly relied upon in the argument before us and dealt with in the Courts below was Simpson v. Clayton (1838) 8 L.J.C.P. 59 but that case does not appear to their Lordships to have any bearing. It was merely a suit by one assignee of a share of a sub-lease against the lessor, the mesne landlord, for damages for the breach of the latter's covenant to obtain a renewal without joining the owner of the other share. Their Lordships were referred in the course of the argument for the appellant to Section 17 of Specific Relief Act as showing that such Act forbids the enforcement by specific performance of a part of the contract to renew unless the case can be brought within Sections 14, 15 or 16. Their Lordships, however, do not think that, in the view they have taken of the construction of the covenant for renewal, it is necessary to consider these sections. If, as their Lordships think, there is no contract to renew the lease for a part of the premises, it. is quite clear that there is nothing in the Act referred to which can in any way assist the respondents, and, on the other hand, if the contract was for a renewal of a part, the Act could have no application.

9. Under the circumstances, their Lordships are of opinion that the appeals should be allowed, that the orders appealed from should be set aside, and that judgment for possession of the premises in question should be entered for the appellant with mesne profits from June 6, 1920, up to the date of the delivery of possession. The respondents must also pay the costs of the appeals and of the actions to the appellant. Their Lordships will humbly advise His Majesty accordingly.


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