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Tellicherry Pichi Naidu Vs. C. Jefferson - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1921Mad541; (1921)41MLJ94
AppellantTellicherry Pichi Naidu
RespondentC. Jefferson
Cases ReferredKolathu Ayyar v. Ranga Vadhyar I.L.
Excerpt:
.....a covenant for perpetual renewal is enforceable if the intention in that behalf is clearly shown. but apart from that a contract of pre-emption stands on a different footing from a covenant to renew from time to time which has always been recognised both in england and here as a perfectly valid and enforceable contract......may 1903 with the follwing clauses: i bind myself to give you such leases as you may require from time to time after the expiration of this agreement on same conditions. should i fail to do so, i bind myself to pay you all your expenses that you incur.' the plaintiff entered into possession according to the terms of the lease and erected certain structures on the land with a view to carry on the mining operations. but sometime in 1915 the defendant obtained a decree for possession of the land inasmuch as the present plaintiff had not on the expiry of the term mentioned in the lease taken out any renewal. thereupon the plaintiff called upon the defendant on the 4th november 1916 to execute a lease for five years with the clause for renewal in the terms set out above but the defendant.....
Judgment:

1. The plaintiff had a lease of the land in dispute from the defendant for a period of five years for mica mining purposes on the 6th May 1903 with the follwing clauses: I bind myself to give you such leases as you may require from time to time after the expiration of this agreement on same conditions. Should I fail to do so, I bind myself to pay you all your expenses that you incur.' The plaintiff entered into possession according to the terms of the lease and erected certain structures on the land with a view to carry on the mining operations. But sometime in 1915 the defendant obtained a decree for possession of the land inasmuch as the present plaintiff had not on the expiry of the term mentioned in the lease taken out any renewal. Thereupon the plaintiff called upon the defendant on the 4th November 1916 to execute a lease for five years with the clause for renewal in the terms set out above but the defendant refused to grant any such renewal. The lessee then instituted this suit.

2. Both the lower Courts have held that the plaintiff is entitled to such a lease as he asked for and gave a decree for specific performance. It was argued before the District Munsif that the decree in the suit of 1915 operated as res judicata but he held that in that suit no question as to the plaintiff's right 'to renewal was decided and that therefore the present suit was not barred. No argument has been addressed to us on this plea.

3. Another defence set up was that the plaintiff was guilty of laches in not asking for the renewal of the lease since the expiry of the first term in 1908 until 1916. But then he was in possession and was willing to carry out his part of the agreement and he was never called upon to take a renewal. The lower appellate Court has discussed this question fully and is right in holding that the plaintiff's right to enforce the agreement has not been lost by laches.

4. The point, however, which was pressed before us with great persistence was that the agreement was in violation of the rule against perpetuities, as laid down in Section 14 of the Transfer of Property Act. That section enacts the well-known rule that no interest in property can be created to take effect after the life-time of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period. The short answer to this agreement is that the agreement in question cannot properly be said to be a transfer of property which is defined by Section 5 of the Act as ' an act by which a living person conveys property, in present or in future, to one or more other living persons or to himself and one or more other living persons.' Here there is no conveyance of property after the expiry of the term of five years. The agreement in question is only a covenant to renew at the option of the lessee. A covenant like this is a covenant running with the land and is not subject to any rule against perpetuities. In Halsbury's laws of England, Vol. 18 paragraph 935 it is pointed out that a covenant for perpetual renewal is enforceable if the intention in that behalf is clearly shown. The nearest case that has been cited in support of the appellant's contention is of Kolathu Ayyar v. Ranga Vadhyar I.L.R(1912) . Mad. 114 where a contract of pre-emption was held to offend against the rule against perpetuities for it fixed no time within which the agreement to convey was to be performed. Even there the contract was sought to be enforced against the heirs of the person who had entered into it and not, as here against the lessor himself. But apart from that a contract of pre-emption stands on a different footing from a covenant to renew from time to time which has always been recognised both in England and here as a perfectly valid and enforceable contract.

5. The second appeal must be dismissed with costs.


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