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The Secretary of State for India in Council Vs. Volkart Bros., Through their Authorised Agent Mr. H. Bachtold - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported in(1927)52MLJ443
AppellantThe Secretary of State for India in Council
RespondentVolkart Bros., Through their Authorised Agent Mr. H. Bachtold
Cases ReferredSimpson v. Clayton
Excerpt:
- - it is well known that pagoda has ceased to be current coin and although the term is still employed to denote rs. if it is essential and the mode of ascertainment has failed, the court will not enforce specific performance. if it is non-essential or merely subsidiary and the mode of ascertainment has failed, the court will have recourse to some other means of determining the fair price and of giving effect to the contract between the parties. this distinction was clearly brought out in millies v. this well-known rule is recognised and embodied in section 22 of the specific relief act. any exceptional cases of hardship fall under this section. 25. both the appeals fail and they are accordingly dismissed with costs. but talcing it as good law even in this country the case has in my.....venkatasubba rao, j.1. in both these appeals the government is the appellant. there were two suites tried by the district judge of south malabar, one was a suit in ejectment by the government and the other was a suit for specific performance by messrs. volkart brothers. these two suits arose out of the same set of facts and the learned district judge dismissed the government's suit for possession and decreed the suit of messrs. volkart bros for specific performance.2. by an indenture, dated the 6th of june, 1821, between the united company of merchants in england trading in the east indies on the one part and mr. francis schuler of the other part, the said united company granted a lease of land in british cochin of the extent of four cawnies and odd for a period of 99 years to the said.....
Judgment:

Venkatasubba Rao, J.

1. In both these appeals the Government is the appellant. There were two suites tried by the District Judge of South Malabar, one was a suit in ejectment by the Government and the other was a suit for specific performance by Messrs. Volkart Brothers. These two suits arose out of the same set of facts and the learned District Judge dismissed the Government's suit for possession and decreed the suit of Messrs. Volkart Bros for specific performance.

2. By an Indenture, dated the 6th of June, 1821, between the United Company of Merchants in England trading in the East Indies on the one part and Mr. Francis Schuler of the other part, the said United Company granted a lease of land in British Cochin of the extent of four cawnies and odd for a period of 99 years to the said Mr. Schuler. The lease deed contains a clause for renewal which runs as follows:

And also he, the said Mr. Francis Schuler, his heirs, administrators or assigns fulfilling the covenants and agreements contained in the said indenture and on his part to be performed and yielding at the end and expiration of the aforesaid term of 99 years unto the said United Company, their successors or assigns the full and just sum of 100 pagodas current money of Fort. St. George, then the said lease should and might be renewed for a further term of 99 years upon such terms and conditions as should be judged reasonable.

3. Mr. Francis Schuler assigned his interest in the lease-deed and there have been several subsequent assignments and in the year 1907 the entire leasehold interest became vested in Messrs. Volkart Bros. In 19i3 or 1914 the Government acquired 30 cents from Messrs. Volkart Bros., paying them a price of Rs. 1,538-2-0. Some time later on the 29th of October, 1914 Messrs. Volkart Bros by Ex. 2 assigned their leasehold interest in acres 3.70 to the Cochin Club receiving a sum of Rs. 18,461-14-0 as consideration. Ex. 2 provides that in a certain event the Cochin Club would be bound to convey to Messrs. Volkart Bros a small part of the premises assigned to them. I may observe that we are not concerned with this clause.

4. On the 5th of June, 1920 the period of the original lease expired. A few weeks before it actually expired, Messrs. Volkart Bros, requested the Government to grant them a renewal for a fresh period of 99 years in pursuance of the term in the lease-deed. The Government replied that as the lands were required for Government purposes, the request of Messrs. Volkart Bros, could not be complied with.

5. In February, 1921 the Government filed a suit in ejectment and in November, 1921 Messrs. Volkart Bros, filed their suit for specific performance. Practically the same points were raised in both the suits.

6. The Government raised three points:

(1) That Messrs. Volkart Bros., who were bound to tender 100 pagodas (Rs. 350) tendered only Rs. 100 and that they thus committed default in regard to compliance with the terms of the lease-deed relating to renewal.

(2) The provision in the lease-deed that renewal shall be granted on such' conditions as shall be judged reasonable is vague and uncertain and cannot be enforced.

(3) A. That the extent of the land in the possession of Messrs. Volkart Bros was only acres 1.10 they having assigned to the Cochin Club acres 3.70 and that they are not consequently entitled to claim specific performance in respect of the land including the land that has been assigned to the Cochin Club

B. It is also urged on behalf of the Government that Messrs. Volkart Bros are not entitled to claim specific performance even in respect of acres 1.10 in their possession on the ground that there cannot be specific performance of a part of the contract.

7. In regard to the first point the matter stands thus: The term expired on 5th June, 1920. A few weeks before the expiry of the term, Messrs. Volkart Bros wrote to the Collector of Malabar a letter dated the 15th of May, 1920, Ex. 3. In that, they said that the lease-deed provided for the payment of 100 pagodas 'which we understand to be equivalent to Rs. 100.' And they requested the Government to grant them a renewal for a further period of 99 years and along with the letter they sent the Collector the sum of Rs. 100. As the learned District Judge has pointed out, there can be no doubt that 100 pagodas do not mean 100 rupees but mean Rs. 350. On behalf of the Government it is urged that by sending Rs. 100 instead of Rs. 350, Messrs. Volkart Bros broke their part of the contract. Can it be said that the conduct of Messrs. Volkart Bros is such as to amount to a prospective refusal to perform the contract; in other words, that by sending Rs. 100 instead of Rs. 350, they evidenced an intention not to be bound by the contract? They say in their letter in very guarded language that they understood 100 pagodas to mean 100 rupees. They do not make a positive assertion to that effect. It is well known that pagoda has ceased to be current coin and although the term is still employed to denote Rs. 3-8-0. It is very probable that there are sections of people who are not familiar with that term. Before it can he said that they repudiated the contract, it must be shown that they did an act before the time of performance arrived, which amounted to a refusal to perform the contract or which showed an intention to break it. This is entirely wanting in the present case. Then there is the more important fact that before the receipt by the Collector of Ex. 3, he wrote on 19th May, 1920,' Ex. 4 informing Messrs. Volkart Bros, that they were bound to surrender the land under the lease-deed and calling upon them to give up possession. Messrs. Volkart Bros, had an option to ask for a renewal and the Government were not justified in calling upon them to deliver up the property on the expiry of the original term. If Ex. 3 constitutes a repudiation (and in my opinion, as I have shown, it does not), the Government did not accept the repudiation as an immediate breach but what we find is, that before the Government became aware of the so-called repudiation, they themselves broke the contract by insisting in Ex. 4, in contravention of the terms of the lease, upon immediate surrender. It is significant that prior to the suit the Government did not treat Ex. 3 as a repudiation, for the only ground urged by them for refusing to renew the lease was that the Government required the land for their own purposes. This is the attitude taken up by the Government in Ex. 5, which the Collector wrote to Messrs. Volkart Bros, on the 20th of May, 1920, after receipt by him of Ex. 3. It seems to me that the first contention of the Government is therefore untenable. The learned Government Pleader, it may be observed, though he did not actually give up the point, apparently realising that there was no substance in this ground, did not seriously press it upon us and 1 think very rightly, in his argument.

8. Now I pass on to the second question, is the agreement for renewal too vague and uncertain to be enforced? On behalf of the Government it is urged that an agreement to grant a renewal 'on such terms and conditions as shall be judged reasonable' is void for uncertainty. There is no uncertainty in respect of the subject-matter of ' the contract. Nor is there any uncertainty in regard to the parties to it. Then the question arises, is therefore any uncertainty in regard to the rent or in regard to the other terms? As is pointed out in Fry on Specific Performance, the completeness of a contract must be considered in these four aspects. (See 6th Edition, page 157). A contract to sell at a fair price or at a fair valuation has been repeatedly held to be capable of being specifically enforced. When the contract appoints a way of determining the price, the point has often arisen whether it can be specifically enforced and the test that is laid down may be thus stated: Is the way of determining the price an essential or a non-essential term? If it is essential and the mode of ascertainment has failed, the Court will not enforce specific performance. If it is non-essential or merely subsidiary and the mode of ascertainment has failed, the Court will have recourse to some other means of determining the fair price and of giving effect to the contract between the parties. In the second case, that is where the way of determining the price is non-essential, the Court will treat the contract as one to sell at a fair price. This distinction was clearly brought out in Millies v. Gery (1807) 14 ves. Jun 400. In that case there was a contract for sale of land at a price to be fixed by one valuer appointed on each side or their umpire. The valuers could not agree. The contract was held to be incomplete and Grant, M.R., refused to supply the defect by appointing other persons as valuers, on the ground that to do so would be to execute a contract different from that of the parties. It was observed that if it was merely a contract to sell at a fair price that was a matter which the Court could ascertain. The case of Gourlay v. The Duke of Somerset (1815) 19 ves 429 illustrates the second part of the rule. In that case there was a contract to grant a lease to contain such conditions as A B should think reasonable and proper and the Court held the interventions of A B not to be of the essence of the contract and referred the case to the Master to settle the lease.

9. I have referred to this topic for the purpose of making my reference to Gourlay v. The Duke of Somerset (1815) 19 ves 429. intelligible and to elucidate the point decided in it. That case seems to me to have a most direct bearing upon the point under discussion. Its importance lies in this: it decides that a contract to grant a lease on such conditions as shall be reasonable and proper (without any further qualification) is a contract which is capable of specific performance. It, of course, assumes that the contracting parties and the subject-matter appear in the contract. Though this case is dealt with in Fry on Specific Performance in connection with the subject, completeness of the contract in regard to price, its authority is the more extensive as not only the price but also the other terms were stipulated to be those that were to be proper and reasonable. It has also been held that the Courts will specifically enforce an agreement to execute a deed 'with usual clauses' or 'with usual covenants.' See Leake on Contracts, 7th Edition, page 863.

It is perhaps impossible to lay down any general rule as to what is sufficient certainty in a contract; but it may be safely stated that the certainty required must be a reasonable one, having regard to the subject-matter of the contract and the circumstances under which and with regard to which it was entered into.--Fry, 6th Edn., p. 179.

10. Let us see what are the facts of the present case. A. lease for 99 years was entered into in 1821 and the parties contemplated renewal for a further period of 99 years. The parties naturally thought that it would be unwise to fix in 1821 what the rent in 1920 was to be. They foresaw that such different conditions would then obtain that it would be imprudent to fix the rent a century in advance. The stipulation is not, that the parties might fix such rent as they chose, but they are enjoined to fix a reasonable rent. It is an ordinary function of the Court to decide what is reasonable. In sale of goods for instance, the Court is called on to decide what is reasonable time. Then again what is reasonable care or what is reasonable enquiry--these are questions which the Court is often invited to decide. 1 find no difficulty in regard to a contract which leaves the parties to fix a reasonable rent. II they will not agree upon a reasonable rent, the Court will intervene and fix it. In New Beerbhoom Coal Company v. Bularam Mahata, their Lordships held a contract to grant a patta at a proper rate was not void for uncertainty, as upon a proper enquiry the Court would be able to determine a proper and reasonable rent.

11. Then in respect of the other terms, it seems to me that we must have regard (in the language of the passage above referred to) to the circumstances under which, and with regard to which, the contract was entered into. The lease deed contains the terms of the original lease and the meaning of the parties, I take to be, is, that they considered those terms to be reasonable subject to such alterations as might be rendered necessary by the changed conditions obtaining at the time of renewal. The lease deed contains the usual covenants, those relating to payment of rent, maintaining and preserving the premises,assigning the lease wholly or in part, re-entry and quiet possession. In the view of the parties these were proper terms. The question is, at the present day and in the circumstances now obtaining, do these terms require any modification and if so in what respects? If the parties cannot agree, there is nothing to prevent the Court from settling the lease on such terms as are reasonable. As a matter of fact, it has not been shown by reference to any specific term, that the Court will meet with any difficulty in deciding what shall be reasonable.

12. That what is required is reasonable and not absolute certainty is illustrated by many English cases:

Great Northern Railway Company v. Manchester, Sheffield and Lincolnshire Railway Company (1851) 5 DeG & Sm. 138.; Jenkins v. Green (1859) 27 Beav. 437.

13. Section 29 of the Contract Act reproduces the English rule on the subject. It runs thus:

Agreements the meaning of which is not certain or capable of not being made certain are void.

14. Illustration (e) says that an agreement to sell one thousand maunds of rice at a price to be fixed by C is not void for uncertainty. The words in the present case are 'conditions as shall be judged reasonable.' There is a standard of reasonableness which the Court recognises and the terms are therefore capable of being made certain. In my opinion the judgment of the District Judge on this point is correct and the second contention of the Government also fails.

15. I shall deal in two parts with the fast point taken by the Government. First, are Messrs. Volkart Bros, entitled to ask for a renewal of the lease in respect of not only acres 1.10 in their possession but also acres 3.70 which was assigned to the Cochin Club? It is difficult to imagine how the lessees can claim renewal of a lease in regard to a part of the premises in which they have ceased to possess any interest. If it is open to Messrs. Volkart Bros, to enforce the covenant in regard to the entire property, it follows that the Cochin Club will have a similar right and this consideration alone, apart from other reasons, shows how untenable this part of Messrs. Volkart Bros.' case is. As this point, however, has not been seriously pressed by their learned Counsel, 1 do not propose to pursue the matter further.

16. The Government next urge that Messrs. Volkart Bros, are not entitled to claim specific performance even in respect of acres 1.10 on the ground that the Court will not as a general rule compel specific performance of a contract, unless it can execute the whole contract. This aspect of the case presents considerable difficulty but I have come to the conclusion that the claim of the lessees must be upheld. It is settled law that a covenant for renewal runs with the land (Redman's Landlord and Tenant, 8th Edition, page 698; Foa's Landlord and Tenant, 6th Edition, page 471). In the case of covenants running with the land, liabilities are imposed and corresponding rights are conferred upon the assignee. If the assignment is only of a part of the entire reversion, there is what is called a severance of the reversion and similarly if the assignment is only of a part of the lessee's interest, there is what is called a severance of the term. It has been held that covenants are divisible and upon a severance of the land or of the reversion the covenants run with the severed parts (Redman, page 703; Foa, page 469). In Twynam v. Pickard the plaintiff who was the assignee of a reversion of part of demised premises claimed damages for breach of covenant for not repairing that part of the premises the rever sion of which had been conveyed to him. In other words, one of several entitled to the reversion claimed to enforce the covenant in respect of that part of the property which vested in him. It was held that the action was maintainable and that the plaintiff could recover the amount claimed. 'I have always understood it to be clear law,' says, Bayley, J., 'that covenant was maintainable by the assignee of the reversion in part.' In Roberts v. Holland one Ellis Humphreys demised a farm to certain lessees whose interest became vested in the defendant Holland. Under Humphrey's will the reversion Became severed and vested in several tenants-in-common of which the plaintiff was one. The question was whether for a breach of the covenant, one of the several tenants-in-common could maintain an action without joining the other tenants as co-plaintiffs. It was held that such an action lay. Wills J., observed that the covenant became equivalent to six separate covenants on which separate actions could be brought. The learned Judge further remarked:

That shows that where the co-tenants have separate interests there are in effect separate covenants.

Charles, J.

17. It was of the same opinion. The following passage in the judgment of Kenny, J., in Dooncr v. Odium, is cited with approval (except in regard to a minor point) by Greer J., in United Dairies, Ltd. v. Public Trustee:

But, while many of those cases turned on points of pleading, it will be found that throughout all of them the principle was recognised that, in order to free the assignee of part of the lands from payment of the entire rent, he must hold the part in physical severalty. When he does so there is no privity of estate, as between him and the reversioner, in the entire of the lands. If the share be not held in severalty--whether it be held jointly or in common with others he is owner with those others of the whole estate, and would be liable accordingly for the whole rent.

18. In Salts v. Battersby a part of the leasehold interest became vested in the defendant who was sued by the lessor for the whole of the rent reserved by the lease. The following passage from the judgment of Darling J., may be usefully quoted:

It is conceded that the claim is wrong and the defendant, instead of being liable for the whole of the reserved rent, is only liable for so much of it as is properly apportioned to the land which he holds, and the only question which we have to decide is upon what principle the apportionment is to be made.

19. The point actually decided (by Darling and Bucknill, JJ.) is, that the apportionment is to be made not with reference to the bare acreage of the several portions of the land but their relative values at the date of the severance. The most direct authority on the point however is Simpson v. Clayton. A lessor, who himself holding only for years determinable on lives, covenanted with his lessee to use his utmost endeavours to procure upon the dropping of such lives a renewal of his own lease. It was held that an assignee of 5|6 of a sub-lease could recover damages from his mesne landlord for breach of the covenant, for renewal of the head lease without joining in the action his co-assignees. Two points were decided in that case. First, that a covenant to procure a renewal is a covenant running with the land. Secondly, it will be observed that the underlease vested in several persons and the plaintiff represented only a portion of that interest. It was held that the plaintiff and the other assignees had separate and distinct interest in the term and that the damages are in their nature severable and may be apportioned according to the value of the share of each. This, though an old case, is cited in all the leading text-books without its authority being questioned. (See, for instance, Wood-fall's Landlord and Tenant, 20th Edition, page 319). This case no doubt dealt with a covenant to procure a lease but it cannot stand on a different footing from a covenant for renewal.

20. The question, as I have said, is not free from difficulty but on an examination of such authority as there is, I have come to the conclusion that when there is an assignment, each assignee holding his part in physical severalty, there come into existence in the words of Wills, J., in Roberts v. Holland as many covenants as there are assignees on which separate actions can be brought.

21. In this view the contract becomes a divisible contract and the rule that specific performance will not be granted of a part only does not apply, for, that assumes that the contract is entire and indivisible. (Fry on Specific Performance, 6th Edition, page 383; also Sections 16 and 17 of the Specific Relief Act.) 'The last contention of the Government accordingly fails.

22. It is suggested that the view I am taking may lead to hardship in some cases. But 1 think the obvious answer is, that right to specific performance is not absolute and where it is not equitable to specifically enforce a contract, the Court will refuse to lend its aid. This well-known rule is recognised and embodied in Section 22 of the Specific Relief Act. Any exceptional cases of hardship fall under this section.

23. Before concluding my judgment there is just one point 1 have to notice. There was some argument as to the applicability of Section 15 of the Specific Relief Act. In my opinion, it does not apply to the facts of the present case. Indeed such a case cannot possibly come under the section. The Government, it cannot be said, is unable to perform the whole of their part of the contract. Such obstacle to its complete performance as exists comes from the fact that the lessees have not the right in law to demand the performance of the whole contract. On the part of the Government there was neither a physical nor a legal obstacle which stood in their way, when the reversion fell in, of leasing the whole property, had they chosen to do so. Even now in regard to the portion leased to the Cochin Club, they are merely tenants-at-will and the Government can, if it likes, lease the property to Messrs. Volkart Bros. The latter's part of the contract, namely, to pay the rent, they are quite, able to perform and in no sense can Section 15 be said to be applicable.

24. The parties subsequent to the decision of the Lower Court have agreed without prejudice to their rights of appeal, that the renewal shall be at a rent of Rs. 600 per annum. This sum will be therefore mentioned as rent in the lease-deed to be executed. In regard to the settling of the other terms of the lease, the case must be posted for argument.

25. Both the appeals fail and they are accordingly dismissed with costs.

Krishnan, J.

26. I had the advantage of reading the judgment of my learned brother but I regret I am unable to concur with it.

27. The facts of these two cases and the terms of the covenant we are concerned with have been stated in full by the District Judge and by my learned brother and I need not repeat them.

28. A covenant for renewal is undoubtedly a covenant running with the land and it is only on that ground that the respondents. Messrs. Volkart Bros., can claim any right to enforce the covenant in question here. When the period of the prior lease expired in 1920, the Cochin Club and the respondents were jointly entitled to the leasehold property, the former being entitled to-a major portion and the latter to a similar part. If the covenant to renew in this case is a legally enforceable one, the two parties would be jointly entitled to enforce it. The Cochin Club not having joined in this litigation but having settled their dispute with the Government the question is whether the respondents could by themselves enforce the covenant for renewal either with reference to the whole plot included in the lease Ex. A or with reference to the plot in their possession.

29. As regards the claim to get a renewal of the whole plot 1 agree with my learned brother that it is manifestly untenable. If the respondents could ask for it, the Cochin Club could ask for it with greater reason as they own the major portion of the property. The two rights would at once conflict and it is therefore clear that neither party could separately ask for it though they could do so jointly. In fact the earned Counsel for the respondents saw the unsupportability of his position and conceded that his clients' could not enforce a renewal of the whole plot.

30. Can they then ask for a renewal of the plot they are in possession of? My learned brother thinks they can, but I am sorry 1 have to differ from him. To allow them to do it, is, it seems to me, to enforce specific performance of a part of the contract to renew which is forbidden by Section 17 of the Specific Relief Act, unless The case can be brought under Sections 14, 13 or 16. Their Lordships of the Privy Council have recently laid down

that Sections 14 to 17 of the Act: constitutes with regard to specific performance of part of a contract, a complete Code, within the terms of which relief of that character must be brought if it is to be granted.

31. See Graham v. Krishna Chunder Bey. Section 14 obviously does not apply. Section 15 cannot either be applied as it assumes that the party claiming specific performance is entitled to have the whole contract performed. My learned brother has also given other reasons for holding that the section does not apply. Section 16 also does not apply as we have not got here, in my opinion, a part of a contract which stands on a separate and independent footing from the rest. IT the suit contract could be divided up into two contracts, one with the respondents for their plot and another with the Cochin Club for theirs, the section may apply. But I am unable to see what justification there is for holding that lessees can by their own unilateral act without any reference to or consent of the lessor split up into two his contract for a single lease to renew the whole plot as one block. The United Company entered into a single contract to renew with reference to the whole of the land; I am unable to see how they can be compelled to perform that contract piecemeal. If the respondents' contention is correct, a landlord may be called upon in a conceivable case to split up his property into 100 or more bits and to grant separate leases of each to 100 or more different individuals it is sufficient to say that that is not what he bargains for when he agrees to give a renewal of the whole. The suggestion that when the lessee assigns his right to two or more people and gives them possession of separate plots in the property there results as many covenants to renew as there are assignees seems to me to be altogether unreasonable and I think it is entirely unsupported by authority. We may have such a state of affairs In the case of covenants to repair. For in those cases the landlord is not called upon to do anything more than what he has undertaken to do, namely to repair. That principle cannot be applied to covenants for renewal, for if such a covenant is treated as split up, the landlord will be compelled to do what he did not agree to, namely to lease his land in parts; it may seriously prejudice him.

32. A covenant for renewal is in my opinion a single indivisible covenant which cannot be apportioned between various assignees. No authority has been cited to show that it is apportionable. Cases bearing on the apportionment of rent or referring to covenants for repairs are not In my opinion in point as they are not part materia with covenants to renew which are covenants to create new rights. I think therefore the cases cited by my learned brother Twynam v. Pickard, Roberts v. Holland, United Dairies, Ltd. v. Public Trustee and Salts v. Battersby are not really relevant.

33. The only case cited which has anything to do with a renewal is the case of Simpson v. Clayton. That was a case where the assignee of a 516ths share of a sub-lease was allowed to maintain an action against the lessor, the mesne landlord, for damages for the latter's breach of covenant to obtain a renewal of his own lease from the main landlord, without joining the owner of the 116th share. It was in no sense a suit for specific performance of any covenant to renew; it was a suit for damages for breach of a covenant to obtain a renewal. Damages being apportionable, the suit was allowed to be maintained. But the case had nothing to do with enforcement of specific performance of any agreement to renew or with the splitting up of such an agreement. If such a case as Simpson v. Clayton arises in this country it may be a question whether that decision is consistent with Section 49 of the Contract Act. But talcing it as good law even in this country the case has in my opinion no bearing on the point before us. On the other hand the present case is governed by the principle laid down in Safiur Rahman v. Maharamunnessa Bibi. The respondents and the Cochin Club became jointly entitled to specific performance of the covenant to renew. Whether the contract is made originally with two or more persons or two or more became jointly entitled to its benefit some alone cannot enforce specific performance when the others do not join. That is clearly land down in Safiur Rahman v. Maharamunnessa Bibi. It seems to me therefore that it is a fatal defect to the respondents' suit that they are entitled only to a portion of the land included in Ex. A and that the Cochin Club has not joined in the suit.

34. The next question on which also I regret I am unable to agree with my learned brother is whether the covenant we are considering is not too vague and uncertain to be specifically enforced. I think it is. The relevant words are 'upon such terms and conditions as shall be judged reasonable.' The only matters settled are the parties, the property, the period of the lease and the premium of 100 pagodas payable for renewal. All other terms and conditions are left unsettled. The words 'as shall be judged reasonable' do not in any way help to fix the other terms and conditions. It is not even said who is to judge; however that may be, the exercise of judgment can come into play only after the terms and conditions are proposed by the parties. I do not read the covenant as meaning that only the terms and conditions of the old lease itself which are judged to be reasonable are to be embodied in the new lease. The parties have taken care by the language used to retain their right to propose any terms they think fit so long as they are reasonable. No doubt, as the learned District Judge says, even if a contract is vague in its language, if it is capable of being made certain, it can be enforced. Section 29 of the Contract Act states this principle. To apply this principle however the contract must be capable of being made certain by evidence, or otherwise, independent of the volition of the parties; for if the parties are to propose the terms, it will be making a new contract and not ascertaining the real meaning of the contract already made. In the present case the covenants to be put into the new lease will depend upon what the parties propose even though the Court may exercise its judgment in finding out what is reasonable and what is not. Any particular covenant which one party proposes, however reasonable it may be, may not be agreed to by the other party and he will be perfectly entitled to object. The terms therefore in this case except those fixed by the contract are in my opinion quite unsettled and we cannot get rid of the vagueness of the contract by any amount of evidence.

35. No doubt where there is a term to pay a 'reasonable' rent or a 'fair' rent or a 'proper' rate or to hold on 'usual terms and conditions' the contract would be made certain by taking evidence and it could therefore be enforced. As examples of such cases see New Beerbhoom Coal Company v. Bularam Mahata, Ali Mahamad Bepari v. Nayan Rajah Bhuiya, Hart v. Hart. But where the clauses to be inserted in the contract are themselves uncertain the contract cannot be enforced. The cases cited by the District Judge, namely Wood v. Midgley, Taylor v. Portington, Runmens v. Robins are examples of this.

36. My learned brother has relied on the case of Gourlay v. The Duke, of Somerset as being in favour of his view. But on examination, I think it will be found that it is in line with the cases above referred to. In that case the parties had agreed to a lease where it was stipulated after settling the other terms that

all such usual and proper conditions, reservations and agreements as shall be judged reasonable and proper by John Gale, land surveyor, and in case of his death by some other proper and competent person, to be mutually agreed upon by the said parties.

should be included in it. Gale had not settled the terms but the Master of the Rolls held that Gale's agency was not of the essence of the contract and that the contract being binding and concluded between the parties who had nothing further to agree to, it was open to the Court to ascertain what the usual and proper covenants are which are reasonable to be put into the deed and the learned Judge referred the case to the Master to settle the lease. As I have already observed the meaning of the expression 'usual terms and conditions' is capable of being made certain by evidence, quite independent of the wishes of the parties; and this case is one of those cases which have adopted that view; it does not carry the matter any further. I am on the whole of opinion that the covenant before us in the present case is uncertain and not capable of being definite and is not therefore specifically enforceable.

37. As regards the objection based on the tender of Rs. 100 by the respondents to the Collector instead of 100 pagodas I entirely agree with my learned brother that there is no substance in it. The respondents offered to pay Rs. 350 as soon as the mistake was discovered.

38. In the view I take A.S. No. 279 of 1923 must be allowed and the suit dismissed with costs throughout.

39. In A.S. No. 434 of 1922, the Government will be entitled to a decree for possession but before disposing of the appeal issues 5 and 6 have to be decided. The learned District Judge has given no findings on them. I would therefore call for findings on those issues by the District Judge on the evidence on record to be submitted in 3 months from this date and give 10 days for objections.

40. By Court: As we have differed in our opinion regarding the following points of law arising in the case, we refer those points for decision by a third Judge under Section 98, Code of Civil Procedure, 1908. The two points are:

(1) Is the suit for specific performance of the covenant to renew maintainable by Messrs. Volkart Bros, as brought with reference to the plot of land in their possession?

(2) Is the covenant to renew in Ex. A unenforceable on account of uncertainty?

These appeals coming on for hearing and upon hearing the arguments of

Upon such terms and conditions as shall be judged reasonable' is no doubt because they thought it might not be reasonable to fix a rent after the lapse of the first century for the whole of the next century, and it may be that it would be reasonable to insert a provision that the rent should be on a sliding scale and should be adjusted at 10 or 15 years' interval. However in my opinion the covenant is clearly not too vague to be enforced.

41. What has given me much trouble is the question as to whether the plaintiffs in this case, who are assignees of a portion only of the originally demised land, can sue without the assignees of the other portions or of the whole. I am not an authority on covenants running with the land, and profess to no more than a faint recollection of Spencer's case which 1 read in my student days. But I see there is direct authority for the proposition that a covenant to renew, according to Tindall C.J.'s judgment in Simpson v. Clayton is of all covenants the one that he would select as the clearest case of a covenant which must run with the land. If it runs with the land, it appears to me clear that it is apportionable, and that is what Simpson v. ClaytonS in fact decided. It is said that Simpson v. Clayton is distinguishable on the ground that that suit was brought for damages. But as I pointed out in the course of the argument, it appears to me that if a person can get damages from his immediate landlord for failing to put himself in a position to be able to renew, that carries a clear implication that such a person can, if the landlord has put himself in a position to renew, demand specific performance; and I am content to rest it on the authority of that case, and to concur in the opinions expressed by the learned District Judge and my brother Venkatasubba Rao To my mind there is nothing in the statute, to put it no higher, to forbid this construction being adopted though I do not for a moment say that there are express words to say that each person cart sue for specific performance qua his portion but in my opinion it does not forbid it either. I therefore agree with Venkatasubba Rao J., and the District Judge's judgment will stand.

42. The case will go back to the bench for final disposal.

43. These appeals coming on for final hearing this day after the expression of the aforesaid opinion of the Third Judge in pursuance of the order of Reference of this Court, dated 12th April, 1926, and made herein, under Section 98 of the Code of the Civil Procedure, 1908, the Court delivered the following


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