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Zeebunnissa Begum Vs. Mrs. H.B. Danagher and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported in163Ind.Cas.384; (1936)70MLJ477
AppellantZeebunnissa Begum
RespondentMrs. H.B. Danagher and anr.
Cases ReferredSarkies v. Prosonomoyee Dosseee I.L.R.
Excerpt:
- - (c) to repair the premises both inside and outside and to keep them in good and habitable state and condition (d) for quiet enjoyment and (e) to grant a renewal of the lease at the request of the lessee made three months before the expiration of the term for a further term of not less than 5 or more than 10 years' at a rent to be settled then. it was held in a suit by the transferee that he could not enforce the contract of indemnity against the minor, and that the suit so far as it was founded on the personal liability of the minor failed. now a lessee cannot escape from his covenant to pay rent unless there has been a total failure of consideration for the lease or unless it is shown that the lease has come to an end; 740. has there been such a total failure of consideration in.....cronish, j.1. the appellant is a mahomedan lady. she was the plaintiff in the suit, and being then a minor was represented by her father and guardian as next friend. the suit was against first defendant for rent due by her as lessee upon her covenant, and against second defendant as guarantor of the due performance of her convenants by the first defendant.2. the lease is dated 2nd november, 1932. it purports to be given by the plaintiff acting by her father and guardian. the lease demises premises known as megan house t.o the first defendant for a term of 5 years at a rent of rs. 1055 per mensem; and it contained a number of covenants by lessor and lessee. the lessee covenanted inter alie, to pay the rent. the lessor's covenants included stipulations (a) not to construct any building on.....
Judgment:

Cronish, J.

1. The appellant is a Mahomedan lady. She was the plaintiff in the suit, and being then a minor was represented by her father and guardian as next friend. The suit was against first defendant for rent due by her as lessee upon her covenant, and against second defendant as guarantor of the due performance of her convenants by the first defendant.

2. The lease is dated 2nd November, 1932. It purports to be given by the plaintiff acting by her father and guardian. The lease demises premises known as Megan House t.o the first defendant for a term of 5 years at a rent of Rs. 1055 per mensem; and it contained a number of covenants by lessor and lessee. The lessee covenanted inter alie, to pay the rent. The lessor's covenants included stipulations (a) not to construct any building on the vacant land comprised in the demise, (b) to pay all taxes in respect of the premises and to keep the lessee indemnified against any claims thereon; (c) to repair the premises both inside and outside and to keep them in good and habitable state and condition (d) for quiet enjoyment and (e) to grant a renewal of the lease at the request of the lessee made three months before the expiration of the term for a further term of not less than 5 or more than 10 years' at a rent to be settled then.

3. Both defendants raise the defence that the lease is void. This plea is put as follows in para 2 of first defendant's written statement:

The defendant submits that the suit lease is void, and that it is unenforceable for the reason that the plaintiff has been at all material times, and now is, a minor; and the lease deed contains onerous covenants on the part of the lessor as essential part of the consideration for the performance by the lessee of her covenants under the lease.

4. The learned trial Judge has held that the lease is void for the reason that it contains covenants which are not enforceable against the minor lessor.

5. There is no doubt that convenants such as (b), (c) and and (e) in the suit lease are not enforceable against a minor. Their Lordships of the Judicial Committee have laid it down in Waghela Rajsanji v. Shekh Musludin that it is not competent for a guardian to bind his ward by personal covenants. In that case a widow, as guardian of her minor son, transferred certain villages, part of a talukdari estate, and in the deed of transfer contracted on behalf of the minor to indemnify the transferee against a Government claim for revenue, the villages having been transferred as rent-free. It was held in a suit by the transferee that he could not enforce the contract of indemnity against the minor, and that the suit so far as it was founded on the personal liability of the minor failed. But there was no question of the validity of the transfer, and their Lordships did not decide that the transfer was void by reason of the convenant being unforceable.

6. It must be taken that a guardian in the coursa of his management of a ward's property is competent to grant leases of it. This power is recognised by Section 27 of the Guardian and Wards Act, and even if a guardian in excess of his power under the Act grants a lease for a term beyond that which is permitted to him without the sanction of the Court thedease is only voidable under Section 30 at the instance of any person affected by it. The lease in the present instance was within the guardian's powers under Section 27. This distinguishes the case from Mir Sarwarjan v. Fakhruddin Mohomed Chowdhuri (1911) 21 M.L.J. 1156 : L.R. 39 IndAp I ; 1911 I.L.R. 39 Cal. 232 (P.C.) where a guardian contracted to purchase immoveable property on behalf of minor, and it was held that this being something which the guardian was not competent to do, there was no mutuality and accordingly the agreement was incapable of specific performance. There is too, a further distinction that in this case a transfer of property has been executed whereas in the other case the contract was executory. Now a lessee cannot escape from his covenant to pay rent unless there has been a total failure of consideration for the lease or unless it is shown that the lease has come to an end; see Grimsdick v. Sweetman (1909) 2 K.B. 740. Has there been such a total failure of consideration in the present case? Obviously not. The lessee has got the premises, of which the demise was at least part of the consideration for the rent. Nor can these covenants by the lessor be construed as conditions. A convenant is a different thing to a condition, and although the failure of a condition may serve to put an end to a term, there is no authority for saying that the failure of a covenant or the impossibility of enforcing a covenant will have that effect. Thus in Grimsdick v. Sweetmani (1909) 2 K.B. 740 (supra), where premises were demised as a beerhouse and the lease contained a convenant by the lessor for quiet enjoyment and by the lessee to continue the premises as a beerhouse, it was held that the extinction of the beerhouse license by the Licensing authority did not put an end to the term and that the lessee remained liable for the rent. It may further be observed that it is neither the law in England nor in India that a failure of a lessor to perform his covenant to repair will put an end to a lease; See Woodfall on Landlord and Tenant page 769; and Govindasami Chettiar v. Palaniappa Chettiar (1924) 48 M.L.J. 397.

7. I therefore think that there can be no doubt that the failure of the lessor's covenants because they are not enforceable will not enable the lessee to avoid the lease. On the other hand it is quite intelligible that a lessor who finds that he has been subjected to covenants in a lease which are not binding on him should have the right to avoid it. But he must elect to avoid the lease as a whole or to adopt it. He cannot approbate and reprobate it: See Zamindar of Polavaram v. Maharaja of Pittapuram (1930) 60 M.L.J. 56 : I.L.R. 1930 54 Mad. 163. The Plaintiff by suing on the lessee's covenant for rent has chosen to adopt the lease, and in my judgment her suit is maintainable. It follows that the appeal must be allowed, and the appellant will have the costs of the appeal.

8. Though the question of the counter claim, which was dismissed, was not before us, the result of this appeal will not affect the defendants' right to raise the counter claim by way of a defence. Whether anything more is open to the defendants will be considered by the trial Court. The suit is accordingly remanded for retrial.

Varadachariar, J.

9. I agree.

10. In dealing with the preliminary issue, the learned trial Judge has (if I may say so) rightly proceeded on the footing that under the Muhammadan Law, it is within the powers of a a father, as guardian of his minor daughter, to grant a lease of the minor's property, if it be for the minor's benefit and that the suit lease is as a whole for the minor's benefit. He was also of opinion that even such of the covenants in the lease as have been relied on in the course of this preliminary discussion are not 'out of place in the lease as a whole', though they might be described as onerous and personal. Adverting to the distinction between 'executed' transactions and 'executory' contracts, he has applied to the present case the principles applicable to executory contracts, because the lease contains some 'unperformed personal covenants'. On this last point, I am unable to agree with the learned Judge.

11. Reference has been made in the Judgment of Mockett, J., to three covenants in particular, those numbered (a), (c) and (e). In dealing with covenant No. (a) the learned Judge has not sufficiently emphasised what we are informed is the true position, namely, that the vacant lands marked B and C in the plan annexed to the lease and in respect of which there is the covenant not to build on or separately sell, lease out etc., are lands included in the demise. If this be the correct position, that covenant really imposes no additional obligation on the lessor.

12. With regard to the covenant to repair the premises and keep the same in good and habitable state and condition, I refrain from saying anything on the merits, because its scope and the extent of the obligation imposed thereby will be some of the questions to be considered after the remand. I content myself for the present with saying that I cannot accede to the argument advanced by the learned Counsel for the respondents that the plea raised in paragraph 10 of the written statement filed by the plaintiff in answer to the counter claim, amounts to an election to repudiate the lease or to a total denial of liability under this covenant. Whenever a minor or a minor's estate is concerned, a distinction is well recognised in the Indian Law, between the liability of the minor's person (after he attains majority) and the liability of the estate. It is sufficient to refer in this connection to Section 68 of the Contract Act and the observation of the Privy Council in Mohari Bibee v. Dhurma-das Ghose . See also Venkatasami N dicker v. Muthuswami Pillai (1917) 34 M.L.J. 177 and Ramajogayya v. Jagannathan (1918) 36 M.L.J. 29 : I.L.R. 1918 42 Mad. 185 (F.B.) The learned trial Judge has recorded that this plea was explained by Mr. Venkatarama Aiyar as meaning 'that a decree can only be obtained against her estate'. This is in accordance with the above distinction and cannot be construed as a denial of all liability.

13. The learned Judge is, of course, right in saying that:

No decree for specific performance could be made against the plaintiff.

14. But as he himself recognises elsewhere, the non-availability of the remedy by way of specific performance does not necessarily show that a contract is void. Several instances are well known to the law where a Court may feel obliged to refuse specific performance and yet may award damages. This clearly shows that there may be a valid contract though the remedy by way of specific performance may not be available.

15. Dealing particularly with the refusal of specific performance on the ground of want of mutuality, I may point out that, though it is the rule under the English law that on this ground an infant cannot sustain a suit for the specific performance of a contract, it is not the rule there that there is no valid contract in such a case or that the lessee can avoid the lease on the ground of the lessor's infancy (see Woodfall latest Edn. p. 49). In Zouch v. Parsons (1765) 97 E.R. 1103 Lord Mansfiled quoting from an earlier authority said:

The lessee can, in no case avoid the lease, on account of the. infancy of the lessor : which shows it not to be void, but voidable only. And it is better for infants, that they should have an election.

16. As pointed out by the Master of the Rolls in Flight Bolland (1828) 4 Russel 298 : 38 E.R. 817 it is more the way the principle of equity was developed and the absence of precedents decreeing specific performance in such cases, that led to the establishment in England of the rule that specific performance is not available to or against an infant. The way in which Parker, J. (as he then was) states the position in the opening words of his judgment in James Jones & Sons Limited v. Tankerville (1909) 2 Ch. 440 clearly indicates that a party may be entitled to the remedy by way of damages, even in cases in which want of mutuality may preclude the remedy by way of specific performance.

17. As some argument was advanced before us, in this connection, on the basis of the judgment of the Judicial Committee in Mir Sarwarjan v. Fakhruddin Mohammed Chowdhuri I must state, with due respect to observations to the contrary in some decisions; (cf. Ramakrishna Reddiar v. Kasivasi Chidambara Swamigal (1927) 54 M.L.J. 418 and Venkatachalam Pillai v. Sethuram Rao (1932) 64 M.L.J. 354 : I.L.R.1932 Mad. 433 (F.B.)) that that case is no authority for the proposition that an executory contract entered into by a guardian on behalf of a minor is void in law. It is true that under the Indian Law, a minor has no capacity to contract and his contract is therefore void. But when the contract has been entered into by a guardian there is no question of want of 'capacity'. The minor may not be bound by the contract if it is in excess of the guardian's powers or not beneficial to the minor. But that is not the same thing as saying that it is void, in the sense that the other party to the contract can ignore it.

18. Mr. Venkatachariar laid stress on the fact that 'in Mir Sarwarjan v. Fakhruddin Mahomed Chowdhuri the suit for specific performance was brought by the minor himself, after he came of age, thereby showing that he was willing to affirm the contract; and he argued that the refusal of specific performance by the Judicial Committee even in such circumstances, showed that the contract was in their Lordships' opinion void and accordingly incapable of ratification. The answer to this, it seems to me, is that as pointed out in paragraph 460 of Fry on Specific Performance, a contract to be specifically enforced must be such that it might, at the time it was entered into, have been enforced by either of the parties against the other of them. The same principle is reaffirmed in the opening sentence of paragraph 463 in the following words:

The mutuality of a contract is, as we have seen, to be judged of, at the time that it is entered into;

and at the end of that paragraph it is observed:

From the time of the execution of the contract being the time to Judge of its mutuality, it further follows that the subsequent performance by one party of terms which could not have been enforced by the other, will not prevent the objection which would arise from the presence of such terms.

19. Referring to Flight v. Bolland (1828) 38 E.R. 817 : 4 Russel 298 in paragraph 461 of his book), Fry L.J. says:

an infant cannot sue because he could not be sued for specific performance;

but his observations in the foot-note in relation to the case of Clayton v. Ashdown (1714) 9 Vin. Abr. 393, and the remarks in some of the succeeding foot-notes show that even in England there have been differences of opinion in the matter but that the rule as stated in the text is in accordance with the preponderance of authority. Again, paragraphs 468 and 469 show that the objection on the score of want of mutuality may be waived; this indicates that this objection is not identical with a plea that the contract is void. The contradistinction is clearly brought out by the observations in the penultimate paragraph of Section 2 of Chapter III, Part II, in Leake on Contracts (7th Edn. p. 402) where it is stated that a contract which is voidable by an infant is binding upon the other contracting party until avoided and that the infant may therefore sue the other party, but a Court of equity will not in general grant specific performance of a contract at the suit of an infant.

20. In the light of these considerations, it is instructive to note that in Mir Sarwarjan v. Fakhruddin Mahomed Chowdhuri Lord Macnaghten took care to state the position in the following terms:

as the minor in the present case was not bound by the contract, there was no mutuality and the minor who has now reached his majority cannot obtain specific performance of the contract.

21. The earlier observation in the same case that,

It is not within the competence of a manager of a minor's estate or within the competence of a guardian of a minor to bind the minor or the minor's estate by a contract for the purchase of immoveable properly.

may be considered along with their Lordships' observation in Waghela Rajsanji v. Shekh Musluddin that:

the guardian exceeded her powers so far as she purported to bind her ward.

22. These observations must be understood as indicating the limitations on the power of a guardian, so as to give the minor the option of saying that he is not bound by such covenants and not that the covenants are void in the sense that the minor cannot stand by the contract and seek to hold the other party bound by it even for purposes of remedies other than specific performance.

23. I may observe in passing that the observations of Sir John Wallis on Waghela Rajsanji v. Shekh Musluddin (1887) 14 I.A. 89 : I.L.R. 11 Bom. 551 (P.C.) and in Ramajogayya v. Jagannadhan (1918) 36 M.L.J. 29 : I.L.R. 42 Mad. 185 (F.B.) lay undue stress upon the fact that their Lordships 'dismissed the suit altogether'. It would be sufficient for the present purpose to distinguish Waghela Rajsanji v. Shekh Musluddin (1887) 14 I.A. 89 : I.L.R. 11 Bom. 551 (P.C.) on the ground that the objection to the guardian's covenant was there taken by the minor and their Lordships upholding the objection is quite consistent with the view that it is voidable at the instance of the minor. But the view of Sir John Wallis that the decision precludes not merely the 'personal' liability of the ward in the narrow sense but also the liability of his estate, ignores the fact that on pages 561 and 562 their Lordships state an argument of Mr. Mayne which however they leave open on the express ground that the question before them related only to the liability of the Taluqdari estate and that the liability was precluded by the terms of Act VI of 1862. I may add that in nearly all the cases where the decision in Waghela Rajsanji v. Shekh Musluddin (1887) 14 I.A. 89 : I.L.R. 1887 11 Bom. 551 (P.C.) has been discussed, the objection to the binding character of the covenent was raised by the minor himself. This was certainly the case in Rarichan v. Manakkal Raman Somayajipad (1922) 44 M.L.J. 515 referred to by Mockett, J. As pointed out by the Full Bench in Raghavachariar v. Srinivasa Raghava Chariar : (1916)31MLJ575 principles recognised or enacted for the benefit or protection of minors need not necessarily be held to apply to their prejudice.

24. Before passing on to the next argument, I may also point out that in respect of the covenant to repair, no question of specific performance can arise (see Woodfall on Landlord and Tenant p. 769). The remedy of the tenant in the event of a breach of the covenant can only be either by way of deduction from the rent or by way of a claim for damages or reimbursement of moneys spent. As pointed out by my learned brother, the tenant cannot ordinarily treat a breach of this covenant as avoiding the lease or justifying him in throwing up the tenancy. It is unnecessary at this stage and for the purpose of this appeal to examine the argument that the covenant to repair imposes no special burden on the estate, because it may be said to be part of a guardian's duty even apart from the lease, to do all things necessary to preserve the property of the minor and in the case of a house, preservation may include repair. On behalf of the Respondents, it has been suggested that the covenant here implies much more, but the main argument is based on the fact of its being a 'Covenant' and not merely an obligation under the personal law.

25. Proceeding now to the contention based on the covenant for renewal, 1 feel more free to deal with it in view of the events that have happened during the pendency of these proceedings, because there is no longer any likelihood of that covenant being sought to be enforced. It is true that the normal remedy for its enforcement will be by way of specific performance and in view of the decision in Mir Sarwarjan v. Fakhruddin Chowdhuri that remedy would not be available as between the parties here. The question nevertheless remains how that circumstance affects the operation of the lease. There is considerable authority in support of the view that the covenant for renewal is separable from the demise (see the cases referred to in Mahendra Nath Srimani v. Kailash Nath Das I.L.R.(1927) 55 Cal. 841 ) and it would not therefore follow that the unenforceability of that covenant would of itself invalidate the lease-The learned Counsel for the Respondents were accordingly obliged to put their case as one of failure of consideration. It was argued that in return for the promise to pay rent and other covenants entered into by the lessee, the lessor has not merely to put the lessee into possession but has also to carry out his various other covenants including the one for renewal, that the expectation of a renewal of the lease must have formed a substantial part of the advantages which the lessee intended to secure in return for the high rent which she undertook to pay and if that advantage could not be secured to her, part of the cons deration must be deemed to have failed. Reliance was placed upon Section 24 of the Contract Act and it was argued that this was a case where the stipulation for rent was single and indivisible and the Court must either enforce the contract as a whole or set it aside as a whole.

26. I am unable to accept the argument thus stated. Section 24 of the Contract Act does not in terms apply here because there is no question of any unlawful object (Cf. Dip Narain Singh v. Nageshar Prasad I.L.R. 52 All. 338 (F.B.)) Putting the position at the highest, the respondent's case could only amount to a partial failure of consideration; but such partial failure, whatever other remedies it may give rise to, will not exonerate the lessee from liability to pay the stipulated rent, nor entitle him to treat the lease as void. It will be instructive in this connection to compare subclause (e) of Section 108 of the Transfer of Property Act with Sub-clauses (f) and (g).

27. On the terms of the covenant for renewal in this case, there is a further answer to the respondents' argument. The lease provides for renewal 'at a rent to be settled then'. It seems to us more than doubtful if a covenant in these terms can ever be enforced by specific performance. It is difficult to conceive that a Court can direct a renewal when the document itself does not indicate the rate of rent or even provide data with reference to which the Court can fix what may be called a proper rent See Nava Kishore Das v. Madan Mohan Das : AIR1924Cal346 , Cf. Srimati Giribala Dasi v. Kali Das Bhanja (1920) 39 M.L.J. 329 (P.C.). The learned trial Judge notes that neither side raised before him the argument that this covenant was bad for uncertainty. But in that connection he refers only to the tenant's option in respect of the period of the renewed lease and does not notice the obvious uncertainty as to the rate of rent. In Jardine, Skinner and Co. v. Rani Surut Soondari Debi it was assumed that having regard to the stipulations in the lease, it would have been possible for the Court to fix a proper rate of rent for the renewed term, but this course does not seem practicable in the present case. In Secretary of State for India v. Volkart Brothers it became unnecessary to deal with the question of uncertainty, in the view which their Lordships took upon the other question raised in that case. I am on this ground also unable to agree with the learned trial Judge that the unenforceability of the covenant for renewal is a reason for holding the suit lease to be void nor to accept the respondents' contention that it amounts to a failure of consideration to any extent.

28. In the course of the argument, I put it to Mr. Venkatachariar whether it is not open to a minor after he comes of age to adopt and ratify a transaction entered into by a guardian, though it might have been in excess of the guardian's powers and in that sense not binding on the minor. This test is relevant in the present case, not only for the purpose of determining whether the transaction can properly be described as void but also because we have been informed that the minor plaintiff has come of age during the pendency of the suit and was willing to stand by the lease, if the quondam minor adopts the guardian's lease, it can only be on the basis that the minor is willing to abide by all the covenants in the lease according to their natural meaning and effect, because he cannot approbate and reprobate. Mr. Venkatachariar answered that so far as the guardian's transaction is in the nature of a 'transfer of property' it is open to the minor to adopt it, though in excess of the guardian's powers, but if it is only a only a 'contract' it is wholly void if in excess of the guardian's powers and therefore incapable of being validated by any principle of ratification. In support of this distinction, he relied on Section 2 Sub-section (g) of the Contract Act declaring that an agreement not enforceable by law is void. This is begging the question, because if it is enforceable at the option of the minor but not at the option of the other party, it will only be a 'voidable' contract falling under Clause (i). Even accepting the distinction suggested by Mr. Venkatachariar, I see no reason why the present case should not be held to fall under his first head, namely, a transaction in the nature of a transfer of property. A lease is not the less a transfer of property because it contains or implies covenants and in that sense may be bilateral. Govinda Kurup v. Chowakkaran Keloth Beekku : (1930)59MLJ941 , is not apposite here, because the transaction was there entered into by the minor himself and not through a guardian and therefore directly fell under Section 7 of the Transfer of Property Act. Even in the case of a sale, the sale deed may contain or the law may imply certain covenants but the transaction does not on that account cease to be a transfer of property.

29. I may refer in this connection to Kandasami Pillai v. Ramasami Mannad (1918) 36 M.L.J. 313 : I.L.R. 42 Mad. 203, where it was pointed out that a lease is a transfer of property and is in the nature of an executed contract and that therefore all the considerations which apply to the enforcement of mere contracts do not necessarily apply to it. (Cf. Dip Narain Singh v. Nageshar Prasad I.L.R.(1929) 52 All. 338 (F.B.). As observed by Abdur Rahim, J., in the course of the arguments in Kandasami Pillai v. Ramasamy Mannadi (1918) 36 M.L.J. 313 : I.L.R. 42 Mad. 203 the covenants are in such cases 'incidents of the transfer of property'. The observations of the Lord Chancellor in Wolverhampton and Walsall Railway Co. v. London and Northzvestern Railway Co. (1873) I.L.R. 16 Eq. Cas. 433 (referred to by Abdur Rahim, J.) may be compared with the remark of Lord Chelmsford in Kamala Naicken v. Pitcha-cootty Chetty (1865) 10 M.I.A. 386 that a lease is not an executory contract and there is no question of specific performance after the lease had been granted. Section 127 of the Transfer of Property Act shows that where as part of a transfer of property obligations are cast on a minor, he may on attaining majority accept the whole transaction including the obligations thereby cast on him (cf. Subramania Aiyar v. Sitha Lakshm I.L.R.(1896) 20 Mad. 147.

30. With reference to the argument advanced by Mr. Brooke Elliot on the language of Section 112 of the Government of India Act, Mockett, J., has observed that it could not have been the intention of Parliament that the 'capacity' of a grantor should be judged of not with reference to his personal law but by the English Law, wherever the defendant happens to be an Englishman or Englishwoman. I respectfully agree with him. The obscurity of the corresponding provision in Section 17 of 21 Geo. Ill C. 70 was commented on in Sarkies v. Prosonomoyee Dosseee I.L.R.(1881) 6 Cal. 794 . Section 112 was adopted from an earliar statute which only dealt with the application on the personal laws of 'Mahammadans and Gentoos'. I venture to doubt whether the expression 'personal law or custom' in that context was intended to apply to the English Law at all. In any event it will be legitimate to restrict the operation of that provision to the incidents of the contract or dealing.

31. In the view we have taken as to the enforceablity of the lease, it is unnecessary to deal with the application for amendment of the plaint.


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