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The Secretary of State for India in Council Vs. Pemmaraju Venkayya Garu (Died) and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in35Ind.Cas.254; (1916)30MLJ575
AppellantThe Secretary of State for India in Council
RespondentPemmaraju Venkayya Garu (Died) and anr.
Cases ReferredRaju Babu v. Krishna Raw Ramchundar and Anr. I.L.R.
Excerpt:
.....to his lessee goes to the very root of the contract and is so fundamental a breach of it as to entitle the lessee to treat that breach as final, and bring an action forthwith for the whole of his prospective damages. 8. the contention is that this is to be construed as an admission by government that as they had failed to give possession of a portion of the demised property, they were under a liability at least to remit a portion of the rent. it is for the plaintiff to satisfy us that its language amounts to an unequivocal admission of liability and he has failed to do so. the document thus being at best ambiguous, i think that this contention of the plaintiff fails. , in discussing the position of the lessee in a case similar to the present says :there has clearly been a breach of the..........a continuing covenant to build. it is to be observed that in that case the lessor was during the term entitled to the rent and at the end of the term to have back the land demised, together with the buildings which the lessee covenanted to build and keep in repair; the lessee might have performed his covenant by building before the expiry of the term and although the lessor might have sued for a breach of the covenant he could not possibly have recovered the whole value of the building but only the loss sustained by him owing to the now existence of the building at the particular time when he brings the suit (and that is likely to be merely nominal) and a recovery in such a suit would not prevent him from instituting another suit for subsequent loss arising from the non-existence of.....
Judgment:

Coutts Trotter, J.

1. This is an appeal by the Secretary of State for India in Council against a judgment of the District Judge of Godavori awarding to the plaintiff a sum of Rs. 14,000, by way. of damages. The facts of the case are comparatively simple, though the questions for determination are complex and difficult. The plaintiff in March 1896 acquired from the Collector of the Godaveri District, acting as agent for the Government, a patta, a lease of a piece of land called the Sidhantam Lanka at an annual kist of Es. 6010 for a period of five years. These Lankas are islands formed in the bed of (ihe river Godaveri by the silting up of solid matters brought down by its waters. They are extremely fertile and valuable for the purpose of cultivation, but their configuration and consequently their size is constantly varying owing to the action of the river; and it is often extremely difficult (o delineate the exact boundaries of a particular lanka at any given time. The patta purported to convey the Sidhantam Lanka defining its 'probable extent' as 777 acres 64 cents. The plaintiff entered into possession of the lanka, but found that 109 acres out of the 777 covered by the patta were in the possession of the Zamindar of Gopalapuram who contended that that portion of the land did not belong to the Sidhantam lanka at all but to his own lanka of Gopalapuram. The plaintiff complained to the Government and a prolonged dispute ensued between the Government and the Zamindar as to which of them really was entitled to the 109 acres. Into the merits of that dispute it is unnecessary to go. But so far as the plaintiff is concerned, the outcome to him was that he never at any time during the term of his patta got possession of any portion of the disputed area. In one fasli corresponding to the year 1898 it appears that an order was passed by the Collector remitting a third of the rent for that fasli in respect of the 109 acres; and this becomes material in considering a subsidiary question raised in this appeal which will be dealt with in its place. The plaintiff instituted the suit claiming damages against the Government on the 11th March 1903, more than six years from the date of his patta and from the date, viz., the 2nd July 1896, when he demanded possession from the Government and failed to obtain it.

2. The defence put forward by the Government in their written statement was that the area given in the patta was only an approximate and rough estimate, and that all that the plaintiff was entitled to was that which should prove in fact to be the Sidhantam Lanka theretofore owned by the Government, that he took that which the Government had and no more, and that if part of the land which the parties supposed to constitute the Sidhantam Lanka should prove not to be part of it, he had no remedy.

3. At the first hearing in the District Court before the then District Judge, Mr. Hamnett, this contention prevailed. But on appeal to this Court it was upset and it was held that what was leased to the plaintiff included the 109 acres claimed by the Zamindar of Gopalapuram and that he was entitled in law to pursue any remedy in damages which that finding might entitle him to. At the same time Government was allowed by the learned Judges to take the point of limitation which had not been raised by them at the first hearing. The case accordingly went back to the District Court, and the then District Judge, Mr. Parthasarathy Aiyangar dealt with the two issues of limitation and of the quantum of damages, and he decided both in favour of the plaintiff. The Government have appealed from that decision, and the only questions that we are called upon to decide relate to their plea of limitation. Under that plea there are two questions for decision : First, whether the plaintiff's cause of action arose more than six years before suit was brought; and secondly, whether if it did, there his been an acknowledgment sufficient to take the case out of the statute. It was suggested by the learned Government Pleader that in order to have the benefit of the latter contention, the plaintiff. should, have set it up either by amending his plaint or putting in a further statement in the nature of a reply alleging the acknowledgment and specifying the document or documents containing it. Having regard to the circumstances in which Government was allowed to avail itself of the plea of limitation, we are not disposed to give effect to the suggestion and are prepared to treat the plaint as amended by the addition of the necessary averments. Indeed on our intimation to that effect during the course of the argument the learned Government Pleader very properly did not press the point.

4. To determine the first point as to whether the plaintiff's case is prima facie barred by limitation, it is necessary to see what is the exact nature of the plaintiff s cause of action. In the course of an interesting argument in which I received the greatest assistance from both the learned Counsel, a great many authorities were referred to, and the history of the various covenants suggested to be applicable to the case to some extent investigated. The Transfer of Property Act does not apply to Crown grants, but Section 108 of that Act sets out in a convenient form the implied contracts usually subsisting from lessor to lessee as follows: - '(b) The lessor is bound on the lessee's request to put him in possession of the property; (c) The lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contracts binding on the lessee, he may hold the property during the time limited by the lease without interruption'. The latter of these implied contracts corresponds to the familiar covenants for quiet enjoyment of English Law. Into the history of the former I will enquire presently. It is quite clear that the obligation to put the lessee in possession of the property was broken quoad the 109 acres in dispute in July 1906, and that that cause of action which the plaintiff undoubtedly possessed is barred by limitation. But it is argued on his behalf that he has a separate remedy in respect of the same failure to put him in possession under the contract for quiet enjoyment. It is argued that the contract for quiet enjoyment subsists throughout the lease, and that its breach is a continuing one, the remedy for which was available to the plaintiff at any time during the continuance of his term. If this contention is sound, then the plaintiff's suit is not barred.

5. The covenant for quiet enjoyment of English Law was a covenant appropriate to feoffments and conveyances of the fee simple in land and was naturally expressed or implied, when leases, historically a much later method of dealing with real estate, became usual. Another usual and necessary covenant in conveyances of the fee simple was the covenant for title, whereby the settlor or vendor warranted to his alienee that he had a good title to the land which he was purporting to convey. To leases which conveyed only a chattel interest in land the covenant was inappropriate. All that the lessee could get or demand was possession for the stipulated period, and so long as he got that, not merely was the exact nature of his lessor's title no concern of his but it has always been a settled principle of English Law that he was estopped from denying or questioning it in any way. At the same time it was essential that he should be able to enforce the right to possession which the instrument of lease purported to confer upon him; and accordingly it was held as early as Holder v. Taylor (1613) Hobart 12 that the operative word demisi in a lease imported a covenant to put the lessee in possession. The point was there taken that as the lessee has never had possession and therefore had only what the English law called an inter esse termini, he could not sue on covenant. The Court over-ruled the objection and held that he could sue on this implied covenant to put him in possession involved in the word demisi and the Court proceeds to make the observation : 'But if it were an express covenant for quiet enjoying, there perhaps it were otherwise.' The main doctrine of Holder v. Taylor (1613) Hobart 12 was reaffirmed in later cases. See e.g. Goe v. Clay (1829) 5 Bing. 440 and Jinks v. Edwards. 11 Exch. 775. It is now a settled doctrine of English law and appears in India as Section 108 (b) of the Transfer of Property Act. Like its correlative the covenant for title, it is broken once and for all on failure to comply with it at the inception of the term.

6. The covenant for quiet enjoyment, on the other hand, undoubtedly has a continuous operation throughout the tenancy and preserves to the tenant his right of possession. The question has been raised whether it is available to a tenant who has never had possession at all, and whose interest is a mere inter esse termini. Chitty, J. in Wallis v. Hands (1893) 2 Ch. 75 has held that such a person cannot sue on the covenant for quiet enjoyment. While not dissenting from that learned Judge's opinion, which was also the opinion of the Bombay High Court in Ardesir v. Vajesing I.L.R.(1901) B. 593 I do not think it desirable to base my judgment on grounds largely derived from the technicalities of the English law of real property, and prefer to put it on more general considerations. In my opinion the nature of the remedy available to a tenant under the covenant or the contract for quiet enjoyment depends upon the nature of the breach. The test as to whether a breach is continuous is this : if the plaintiff sues in damages, can he only sue for the damage actually accrued up to the date of suit, or may he sue for the whole 'of the damage accrued and prospective that the breach will cause to him? In the former case the breach is continuing, in the latter it is single and final. I think that the failure of a lessor to give possession of the demised lands to his lessee goes to the very root of the contract and is so fundamental a breach of it as to entitle the lessee to treat that breach as final, and bring an action forthwith for the whole of his prospective damages. The matter may be illustrated in this way. Suppose that a month after the date fixed for the commencement of the term, the lessor had for the first time tendered possession to the lessee; could he then compel him to take possession and accept compensation or reduction of rent for the month he had been out of possession? I think it manifest that he could not; and that can only be because the lessor's breach being final, it is not open to him to remedy it subsequently. I therefore hold that assuming the contract for quiet enjoyment to give a remedy to this plaintiff, there was a complete and final breach of that contract so far as concerns the disputed land at the inception of the term and that consequently limitation began to run against him then. In this view of the matter it becomes unnecessary to discuss the argument urged at the bar, viz., that the plaintiff having got possession of a substantive portion of the demised land could not be regarded as having a mere interesse termini as to any other part of it. Whether he had an interest termini or something more, the breach as to these lands was complete at the inception of the term and by remaining in possession of the rest of the lands throughout the term the plaintiff obviously showed his willingness to treat the breach, as to the suit lands as a separate breach complete in itself. See also Ardesir v. Vajesing I.L.R. (1901) B. 593 on this point.

7. One other contention was urged by the respondent, viz., that even assuming the period of limitation to run from the date alleged by the appellant, there is a subsequent acknowledgment sufficient to take the case out of the Statute. The acknowledgment is said to be contained in Exhibit H, which is a memorandum from the Tahsildar to the plaintiff and is in the following terms:

The Collector in his No. 301/Rev. of 1898, dated 13-2-98, ordered that pending the disposal of the dispute regarding the Sidhantam Lanka obtained by you at an auction, the collection of one-third of the kist should be stopped and the remaining sum collected. Therefore deducting one-third ot tne amount payable by you for this year out of the balance of the demand amount of Rs. 4,403-2-0 excluding Rs. 2,317-0-0 the amount paid by you towards the sum of Rs. 2,935-6-8 the demand amount payable for the months of January and February, the balance of Rs. 618-6-0 is still due. You must send that morjey this day only. As the Taluq chitta would be closed tomorrow please send the money immediately.

8. The contention is that this is to be construed as an admission by Government that as they had failed to give possession of a portion of the demised property, they were under a liability at least to remit a portion of the rent. It seems to me extremely doubtful whether the Tahsildar or even the Collector would have any authority to make any such admission; their authority in all probability would be limited to communicating the decision to remit the rent, and would not extend to making admissions of legal liability. But it is unnecessary, in the view that I take of the true construction of Ex. H, to decide this question. It is for the plaintiff to satisfy us that its language amounts to an unequivocal admission of liability and he has failed to do so. In my opinion, the language used is at least as consistent with a temporary suspension of a claim for the rent or at most with an ex gratia remission of that claim as with an acknowledgment that is legally irrecoverable. The document thus being at best ambiguous, I think that this contention of the plaintiff fails.

9. The appeal will accordingly be allowed and the suit dismissed; but having regard to the circumstances of the case, we direct each party to pay their own costs.

Srinivasa Aiyanyar, J.

10. The facts are fully set out in the judgment just delivered and it is unnecessary to repeat them.

11. This being a suit to recover damages for breach of a contract and there being no other specific Article, the Article of limitation applicable to the case is either Article 115 or 116. The starting point is the same in both the cases though in the case of a contract in writing registered, the period of limitation is 6 years instead of 3 years. Although the obligation in this case is one which is implied from the relation of the parties, as that relation was constituted by an instrument in writing registered, the period of limitation is, according to the decisions of this court, 6 years just as if the obligation had been expressed in words in the writing. But whether the period is 6 years under Article 116 or 3 under Article 115 is immaterial in this case; for the suit was instituted more than 6 years from the date when the lessee should have got possession and less than 3 years after the expiry of the term, and the starting point for limitation in both cases is that provided for by the third column of Article 115. Under that Article time begins to run from when the contract is broken, or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs, or (where, the breach is continuing) when it ceases. Unless the breach in this case was a 'continuing breach' the suit is barred by limitation. For the determination of this question, viz., whether the breach was a continuing breach, it is necessary to examine the precise nature of the obligation undertaken by the defendant. On principle and in common sense, every person who purports to transfer property for value, agrees to place the transferee in possession, if and when the transferee is entitled to it, and if he does not do so, it is clear that he is liable in damages for the breach of that obligation, though the transferee may be in a position to bring ejectment to recover possession of the land transferred either from the transferor or from others who may be in possession without a lawful title. Coe v. Clay (1829) 5 Bing. P. 440, Jinks v. Edward 11 Ex. Ch. 775. Whether this obligation is incurred in the case of a gift need not be considered. I do not think it useful or necessary to consider whether any and what covenants could be implied by the use of certain technical words as dedi, concessi or demisi, nor to consider the exact nature or scope of such implied covenants, whether they ought to be called covenants for quiet enjoyment, or covenants for title whether such covenants last after the termination of the estate of the grantor or whether a person who has only an interesse termini can bring an action of covenant on breach of a covenant for quiet enjoyment See Markham v. Paige (1908) 1 Ch. P. 697 Mostyn v. West Mostyn Coal and Iron Co. (1876) L.R. 1 C.P.D. p. 145, Bandy v. Cartwright 22 L.J. Exch. P. 285, Bayres and Co. v. Lloyd and Sons (1895) 2 Q.B. 615, Wallis v. Hands (1893) 2 Ch. 75 , Cloake v. Hooper (1673) Freem 121, and Ludwell v. Newman (1795) 6 Term Reports p. 458, as I think it would be mischievous to introduce the technical rules of English Conveyancing or Real Property Law. The covenant or the contract, (in India there is no difference between a contract and a covenant or rather there is no such thing as a covenant except probably in cases governed by the English Law) whether express or implied, to place the transferee in possession operates in praesenti, and that obligation is broken and broken once for all as soon as the transferor declines, or is unable to place the transferee in possession. In the case of a lease, the obligation is to place the lessee in possession in the beginning of the term. See Drury v. Macnamara (1855) 5 Ellis & Black 612 : L.J.Q. 5, per Wightman, J.; also Woodfall's Landlord and Tenant, page 719. On the breach of this obligation the lessee is entitled to institute an action and recover by way of damages the whole value of the term.

12. From the very nature of the obligation it is clear that there cannot be a continuing breach, for the covenant or contract is not a continuing one. The Transfer of Property Act doe's not apply to Crown grants, and further the chapter relating to leases in that Act does not apply to agricultural leases; but the provisions of Section 108 regulating the rights and liabilities of lessors and lessees may usefully be referred to for the purpose of determining the nature of the ordinary covenants by which the lessor and the lessee are bound. Under the heading 'Rights and Liabilities' of the lessor in Section 108 of the Transfer of Property Act, by Clause (6) it is provided that 'the lessor is bound on the lessee's request to put him in possession of 'the property' and by Clause (c) 'the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contracts binding on the lessee, he may hold the property during the time limited by the lease without interruption.' Clause (c) is the usual covenant, for quiet enjoyment, and this covenant is, by the concluding words of that paragraph, expressly made to run with the land, while there is no such provision as regards the obligation provided for in Clause (6). Likewise in the case of Sales under Section 55 Clause (f) the obligation to give possession by a vendor to his vendee is prescribed. It is clear that the obligation to give such possession is not one which runs with the land, as the breach, if any, of the obligation takes place immediately on the transfer of property becoming complete. See Rawle's Covenants for title, pp. 204, 205, 207. The analogy if any is to a covenant for title, and in fact Brett J., in discussing the position of the lessee in a case similar to the present says : 'There has clearly been a breach of the covenant for title, and we think that without any eviction the lessees, though there was a lease of the whole at one rent, would have a right to refuse to incur the risk of committing a trespass on the part to which there was no title and to elect, instead of giving up the whole, to keep the part to which there was a good title, and have nothing to do with the other part, and sue for damages for the breach of the covenant for title. I do not think it necessary to determine whether there would in such a case be an apportionment of rent, because it seems to me that, whether there was an apportionment or not, the defendants would probably be entitled to some damages in respect of the breach of the covenant for title'. See Mostyn v. West Mostyn Coal & Iron Co. (1876) L.R. 1 C.P.D. 145 .

13. The covenant for title here mentioned is obviously not the ordinary covenant for title, for the lessor does not generally warrant that he has title, to grant the term which he purports to grant. See an interesting Article 39 S.O. Journal, page 444. It is now settled that a breach of a covenant for title is not a continuing breach. Turner v. Moon (1901) 2 Ch. 825.

14. Assuming however that the obligation to place the lessee in possession is really part of the obligation undertaken by the covenant for quiet enjoyment construing that covenant as imparting an obligation to give possession in the beginning of the term and maintain it during the term, yet the breach of it does not necessarily constitute a continuing breach, though a covenant for quiet enjoyment is a 'continuing covenant' in the same way as a covenant to pay rent is. It is to be observed that in the case of continuing breach, the starting point is the time when the breach ceases and under Section 23 of the Limitation Act a fresh period of limitation begins to run at every moment of the time during which the breach continues. The object is obviously to prevent multiplicity of suits and to enable one action to be brought for all loss suffered during the whole period the breach continued. The article implies the right of the person committing the breach to resume performance of the contract. As stated in Sedgwick on damages, Article 89, it applies td cases where a single act of the defendant may be of such a nature as to give rise to a continuous breach of his contract with the plaintiff which, however, the defendant, may bring to a close by resuming performance. In such a case each moment during which the injury is allowed to continue is really a new breach; and if action is brought during the continuance of the injury, compensation can be recovered for such loss only as is caused before the beginning of the action'. Well known instances of a continuous breach are of covenants 'to repair and keep in repair', or 'to insure and keep insured.' During the continuance of the breach any number of actions can be brought for compensation for loss caused before the beginning of the action, but in many cases the recovery can only be nominal as the lessee may make the repairs, or insure the premises, before the end of the term. Even in cases where the loss caused may be substantial as for instance in the case of a contract not to engage in a competing business, the ascertainment of such loss may be difficult. In these cases the person damnified is not obliged to bring successive suits for damages, but can wait and bring action once for all at the end of the term, when there is no possibility of future performance; or if during the continuance of the contract the obligor resumes performance, the obligee may bring his suit once for all, for all the damages sustained by him till then. In Jocob v. Dum (1800) 2 Ch. 156 where there was a covenant build within a particular time and also a covenant to repair and keep in repair, it was held, that a covenant to build was broken once for all on the expiry of the time limited; but it was also held on the language of the particular covenant, that the covenant to repair also included a continuing covenant to build. It is to be observed that in that case the lessor was during the term entitled to the rent and at the end of the term to have back the land demised, together with the buildings which the lessee covenanted to build and keep in repair; the lessee might have performed his covenant by building before the expiry of the term and although the lessor might have sued for a breach of the covenant he could not possibly have recovered the whole value of the building but only the loss sustained by him owing to the now existence of the building at the particular time when he brings the suit (and that is likely to be merely nominal) and a recovery in such a suit would not prevent him from instituting another suit for subsequent loss arising from the non-existence of the building between the date of the first suit and the second. Incases of failure to deliver possession, the lessor if he fails to deliver possession at the commencement of the term cannot subsequently insist on performance, nor can the lessee after having instituted a suit for damages for non-delivery of possession, in which he is entitled to recover the whole value of the term, again institute a suit for non-delivery after the institution of the first suit. Even a subsequent eviction, by paramount title, of the lessee, from the whole or a portion of the demised premises does not constitute a continuing breach of the covenant within the meaning of Article 115. The lessee so evicted can on eviction bring his action and recover as damages the whole value of the remainder of the term and would not be entitled to bring another action. Bed man, Landlord and Tenant, page 244. No doubt if the eviction was from a portion of the premises and if there is a subsequent eviction from another portion and so on, the lessee may bring successive actions, in each of which he would be entitled to recover the value of the lands from which he was evicted from the remainder of the term, but that would not be a else of a continuing breach but that of successive breaches of the same covenant. The dictum of Green J. in Raju Babu v. Krishna Raw Ramchundar and Anr. I.L.R. (1877) B. 293 does not apply to every case of a breach of the covenant for quiet enjoyment irrespective of the fact, as to whether the breach consists in mere disturbance in the enjoyment in a wrongful eviction of the landlord or by a third party by virtue of a paramount title. The period of limitation, therefore began to run from the time when the lessee became entitled to possession, i.e., from the time of the lease or at the latest from the 2nd July 1896 when he demanded possession from the Government and failed to obtain it. On the question of acknowledgment, I agree.


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