(1) This second appeal arises out of a suit in ejectment and the question raised is whether there has been a valid determination of the tenancy on forfeiture and whether proper notice under section 114-A of the Transfer of Property Act has been issued for institution of the suit in ejectment. The trial court found for the defendants on this question and dismissed the suit. On appeal the learned Subordinate Judge of North Arcot held that the notice in question satisfied all the requirement under section 114-A and gave judgment and decree for the plaintiff in ejectment.
(2) One Lalkhan Sahib was the original lessee. He obtained a lease from one Narayanaswami Reddiar, the predecessor-in-interest of the present plaintiff of a vacant site for constructing a residential building therein. The document evidencing the lease is a registered one in two parts Ex A-1 is the counterpart of the lease executed by Lalkhan in favour of Narayanaswami Reddiar and Ex. B-1 is the instrument executed by Narayanaswami Reddiar to Lalkhan Sahib. The lease is dated 26-8-1887. Under its terms the leased site should be used only for raising a residential building and should be used only for residential purposes. It is seen from the document that the lessor himself was carrying on a business and there was a specific covenant by the lessee not to carry on any business in the leased premises. If there was a breach of the covenant, there was provision for re-entry, the lessee to remove the superstructures and surrender vacant possession of the premises to the lessor. The covenant against carrying on trade in the leased premises, it is provided in the document, would bind also assignees and transferees from the lease.
The original defendants in the suit were the heirs of Lalkhan Sahib and subsequent assignees from them are added as defendants 9 and 10, the 9th defendant being the present appellant. There have been disputes inter se between the 9th and and 10th defendants as to their respective interests in the suit property. The courts below found that the lease is a permanent one and this view has not been questioned. The annual rent reserved in Rs. 3. The plaintiff who is the grandson of the original lessor charged the defendants with breach of the terms of the defendants with breach of the terms of the lease. It is his case that in 1948 the defendants started putting up shops and using the leased premises for trade purposes. The appellate court finds that the plaintiff had orally protested against the conversion of the residential premises into business premises and that though the 1st defendant promised to close the shops he continued to trade in violation of the covenants under the lease. On 16-11-1950 the plaintiff issued notice to the heirs of Lalkhan drawing their attention to the covenant in the lease deed against carrying on any business in the premises, the liability for forfeiture if the covenant was violated and the fact that in spite of having agreed to close the business, the business was continued. Pointing out that the tenants had forfeited the tenancy, the notice called upon them to vacate the premises by 1-1-1951. Damages were also claimed as provided for in the lease deed.
This suit in ejectment was instituted on 14-3-1956. In defence various contentions were raised. Title to the premises by adverse enjoyment without payment of any rent at any time was pleaded. It is unnecessary to refer in detail to the several defences put forward; it is sufficient to state that the findings of the trial court that the defendants have only a leasehold interest in the premises and that there was no adverse possession have not been the subject of further challenge. The only question that called for serious consideration was the plea that the lease had not been validly terminated by proper notice under sections 111(g) and 114-A of the Transfer of Property Act. A plea that the premises had all along from the beginning been used for business purposes was also found against, the view of the courts below being that it was only in or about 1948 that business was started in the premises, leading to immediate protests from the plaintiff. Though the suit has been filed only in 1956 it may be stated that there has been no plea that since the breach in 1948, there was been waiver or condonation of the breach. In fact the defendants have been denying tenancy and denying their liability to pay rent. They were claiming title to the property itself by adverse possession and they did not pay any rent after 1948. Though the defendants had six years since the issue of notice they never expressed any intention to remedy the breach and discontinue the user of the premises in violation of the specific terms of the lease. There has been no reply to the notices issued on behalf of the plaintiff in 1950. As it transpires, the present appellant has only a fractional interest in the superstructure.
(3) Now to examine the contentions that prevailed in the court of first instance and have been over-ruled on appeal it is elementary that a suit in ejectment would lie against a tenant only on the determination of the lease. under section 111 of the Transfer of Property Act, as it now stands, a lease of immoveable property can be determined also by forfeiture. Section 111(g) provides.
111. "A lease of immovable property determines--(g) by forfeiture; that is to say--(1) in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter, or (2) in case of lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may reenter on the happening of such event' and in any of these case the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease."
The forfeiture claimed in this case in on the breach of an express condition in the lease which provides that on breach thereof the lessor may re-enter. For the determination of the lease on forfeiture under section 111(g) the lessor or his transferee has to give a notice in writing to the lessee of his intention to determine the lease. That such a notice has been give is not and cannot be controverted in this case Ex. A-2 satisfies all the requirements of section 111(g). But there is another provision section 114-A and the controversy has been whether there has been compliance with the requirements of section 114-A Section 114-A provides;
"Where a lease of immoveable property has determined by forfeiture for a breach of an express condition which provides that on breach thereof the lessor may re-enter, no suit for ejectment shall lie unless and until the lessor has served on the lessee a notice in writing--
(a) specifying the particular breach complained of; and
(b) if the breach is capable of remedy requiring the lessee to remedy the breach; and the lessee fails, within a reasonable time from the date of the service of the notice to remedy the breach, if it is capable of remedy."
This provision section 114-A was inserted into the Transfer of Property Act by the Transfer of Property (Amendment) Act, XX of 1929, and came into force on the first day of April 1930. The written notice in this case Ex. A-2 in terms does not call upon the lessee to remedy the breach. it refers only to oral protests made earlier and the offer of the lessee to close the business which was carried on in violation of an express condition of the lease. Clearly the notice is not strictly in accordance with section 114-A. Section 114-A requires a notice in writing requiring the lessee to remedy the breach. An oral demand cannot be equated to the written notice. Section 114-A imposes a condition precedent to the institution of a suit in ejectment and the court will have to be satisfied when the validity of the notice is put in issue as to whether the requirements of section 114-A were satisfied in the notice issued or the demand made on the lessee. The notice has to specify the particular breach which has been complained of. The provision is inserted with a view to enable the tenant to secure relief against forfeiture. The court always leans against forfeiture and an oral demand can never satisfy the specific requirements of section 114-A.
The plaintiff in his evidence states that when he pointed out that shops were being put up in violation of the covenants in the lease deed, the 1st defendant explained that he was only making a passage and had no idea of trading. It has not been contended before me that the breach in question is one which is not capable of being remedied. The defendants have just to close the business. The learned Subordinate Judge obviously upset by the contumacious conduct of the defendants, in continuing to trade despite the notice issued in 1950 and expressing no intention to remedy the breach even in the written statement finds that there has been substantial compliance with the requirements of section 114-A in Ex. A-2. The breach complained of has been referred to in the notice. Even prior to the notice there has been a protest against the conversion of the residential premises into business premises. It is years after the notice the suit has been filed and the defendants who have not even replied to the notice have had ample opportunity to remedy the breach before the suit. But I am afraid that a statutory requirement if mandatory cannot be got round by these considerations. Of course, it is not contended for the defendants that there must be two independent notices, one under section 111(g) and another under section 114-A, in view of the decision of this court in Mrs. Margaret v. G.A.R. Spain, . Therein following the decision of the Calcutta High Court in Provat Chandra v. Bengal Central Bank, ILR 1938(2) Cal 434 = (AIR 1938 Cal 589), it has been held by Rajamannar, C. J. sitting with Venkatarama Ayyar J., that two notices in writing one under section 111(g) and another under section 114-A are not necessary. But, of course, the requirements of both the provisions will have to be satisfied even if only one notice is issued. As pointed out therein, section 114-A only specifies the nature of the notice required under section 111(g). No doubt in construing the notice under Section 114-A a commonsense view of the matter has been taken. But however looked at, it cannot be said that the notice in question in the present case calls upon the tenant to remedy the breach. It proceeds on the basis that the matter has gone beyond the stage of remedy. But learned counsel for the plaintiff would sustain the decree of the lower appellate court on another ground.
(4) Learned counsel contends that section 114-A introduced into the Transfer of Property Act in 1930 does not apply to the lease in question and that the rights of parties are to be looked for in the provisions of the Transfer of Property Act before its amendment under Act, XX of 1929. This is an aspect of the matter which goes to the very root, whether at all a notice under section 114-A could be demanded.
(5) Before the amendment of the Transfer of Property Act, in 1929, the last part of section 111(g) ran thus:
"and in any of these cases the lessor or his transferee does some act showing his intention to determine the lease."
By section 57 of XX of 1929 this sub-section was amended and the amended sub-section now reads:
"in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease."
Section 114-A was newly introduced by that Act under section 58 of the Act. Section 63 of the Amending Act provided inter alia that nothing in sections 57 and 58 of the Act shall be deemed in any way to affect "the terms of incidents of any transfer of property made or effected before the first day of April 1930." Learned counsel for the plaintiff therefore contends that the requirements of the notice under section 114-A cannot be insisted upon in this case as a preliminary to the institution upon in this case as a preliminary to the institution of a suit in ejectment. In Md. Hussain v. Secretary of State, AIR 1939 Lah 330, while holding that the Transfer of Property Act was not in force in Punjab and that its technical provisions like section 114-A do not apply to that Province, it was further observed that the provisions of section 114-A have no retrospective effect and cannot govern suits which had been instituted long before its enactment. Of course, this decision is distinguishable as the alleged breach in that case took place in July 1925 and the suit had been instituted in 1928. Mr. T.R. Ramachandran, learned counsel for the defendant-appellant, would bring that case under sub-clauses (c) and (d) of the saving provision section 63 of Act XX of 1929, which saved any right, title, obligation or liability already acquired, or incurred before the first day of April 1930 and any remedy or proceeding in respect of such right, title, obligation or liability.
In Krishna Prasad, v. Adyanath Ghatak, AIR 1944 Pat 77, a Division Bench held as follows:--
"Prior to Act XX of 1929 the words 'gives notice in writing to the lessee' were not in section 111(g). Bu the Act of 1929 these words were substituted for the words 'does some act showing'. This amendment was made by section 57 of Act 20 of 1929. Section 63 of that Act contained an express provision that certain of the sections including section 57 should not operate retrospectively. The lease in the present case was long before 1929. Therefore the incidents of tenancy cannot be governed by the amended section 111. In the case of such a lease all therefore that is necessary to constitute forfeiture is the disclaimer by the tenant and some act by the lessor indicating his intention to determine the lease."
The matter in my view is not concluded by the decision of the Supreme Court in Namdeo v. Narmadabai, . That was no doubt a case where the determination of the lease was for non-payment of rent and the question that arose for decision was whether the notice as contemplated by section 111(g) of the Transfer of Property Act was necessary for determining a lease for non-payment of rent, in the case of a lease executed before the coming into force of the Transfer of Property Act. The learned Judge, Mahajan, J. (as he then was) observes at page 230.
"Section 111(g) in terms makes the further act an integral condition of the forfeiture. In other words, without this act there is no completed forfeiture at all. Under the old section an overt act evidencing the requisite intention was essential. As the law stands today under the Act, notice in writing by the landlord is a condition precedent to a forfeiture and the right of re-entry. Section 63 of Act 20 of 1929 restricts the operation of this amendment to transfers of property made after 1-4-1930. The lease in this case was executed before the Transfer of Property Act came into force in 1882. The amendment, therefore, made in this sub-section by Act 20 of 1929 not being retrospective, cannot touch the present lease and it is also excluded from the reach of the Transfer of Property Act by the provisions of section 2."
At page 232 it is stated:
"In our opinion, the provision as to notice in writing as a preliminary to a suit for ejectment based on forfeiture of a lease is not based on any principle of justice, equity or good conscience and cannot govern leases made prior to the coming into force of the Transfer of Property Act, 1882, or to leases executed prior to 1-4-1930. The rights and obligations under those leases have to be determined according to the rules of law prevailing at the time and the only rule applicable seems to be that a tenant cannot by his own wrong determine the lease unless the lessor gives an indication by some unequivocal expression of intention on his part of taking advantage of the breach. On no principle of equity is a tenant entitled to a notice in writing telling him that the lease has been determined.
Learned counsel for the appellant has contended that the decision of the Supreme Court related only to section 111(g) and was not on section 114-A of the Act. Learned counsel contended that the requirement as to notice under section 114-A is merely a procedural requirement and the saving clause section 63 does not take out leases prior to the amendment completely out of the amended provisions and that the saving provisions were limited in operation. It is argued that the terms and incidents of the lease effected before the first day of April 1930 are not in fact affected. The provision for re-entry on breach is not taken away but only a restriction in its enforcement is imposed by the amendment and this must be deemed to be a procedural requirement in the seeking of the remedy. Learned counsel points out that clause (c) of section 63 of Act 20 of 1929 protects from the amendments, any right, title, obligation or liability already acquired, accrued or incurred before the first day of April 1930. It is submitted that if a breach had already taken places then it could be said that a right had accrued to the lessor or an obligation or liability incurred by the lessee. Here no right to enforce forfeiture had accrued, nor liability to be evicted for breach of an express condition incurred before the amendment to the Act. The terms and incidents of tenancy are there and are continued after the amendment under sub-clause (a) of section 63.
My attention is drawn to sub-clause (d) of S. 63 which saves remedy or proceedings in respect of the right title, obligation or liability accrued or incurred and referred to in sub-clause (c). But these submission of the learned counsel would apply equally to the amendment in section 111(g) making a notice in writing a requirement for determining the tenancy for forfeiture. But the Supreme Court has rules that the amended provisions do not apply to lease executed prior to 1-4-1930 in view of section 63 of the amending Act. The distinction attempted is in my view one without difference. Section 114-A is not merely a procedural provision. It drastically curtails the rights of the landlord. Under the contract between the parties the lessor could determine the lease and re-enter on breach of the stipulation against carrying on business in the premises. While under the amendment to section 111(g) the lessor is prevented from re-entering on forfeiture before giving a notice in writing expressing his intention to determine the lease section 114-A provides for an opportunity to the lessee to remedy the breach where the breach is capable of remedy.
As a result of this provision, the lessor would lose the right to re-enter on breach, if the lessee remedies the breach on receipt of the notice. The lessor is required by the section to grant reasonable time to the lessee to remedy the breach where it is possible. he has to forgo the right of immediate entry that had accrued. Clearly this is not a procedural amendment. It affects the rights of the landlord. It varies the terms and incidents of the lease. It is as if a new provision is introduced in the lease deed, providing for the lessee to avoid the consequences of breach if he was so minded. The lessor is compelled to issue a notice to the lessee specifying the breach and requiring the lessee to remedy the breach. The lessor has to grant a reasonable time to the lessee to remedy the breach. It is manifest that section 114-A as well as the amendment introduced to section 111(g) in 1929 affect the terms and incidents of the contract between the landlord and the tenant. It follows that section 63 of Act 20 of 1929 saves the lease in question executed before the 1st April 1930, from the provisions of the amendment. Where vested rights are restricted or affected adversely prima facie it is not a matter of procedure. Section 63 of 20 of 1929 must be read bearing in mind the well-established principle that every statute, which takes away or impairs vested rights conferred under existing laws, or creates a new obligation, or imposes a new duty or attaches new disability in respect of past transactions, must be presumed not to have retrospective operation.
(6) In support of his contention that section 114-A must be read as having retrospective operation and there was nothing in section 63 of the Amending Act showing different intention, learned counsel referred to the decision in Quilter v. Mapleson, (1882) 9 QBD 672. That was a case where the landlord brought an action to recover the demised property under a proviso of re-entry for breach of a covenant to insure. Pending proceedings and when in the appellate stage, the Conveyancing and Law of Property Act, 1881, came into operation, it was held that the defendant in the action was entitled to relief against forfeiture under the new Act of 1881. But it was observed that the new Act of 1881. But it was observed that the new Act gave the lessee also the right to relief against forfeiture which he did not previously possess and it is this observation that the learned counsel for the appellant stresses. But it is pointed out by Jessel M.R., that the sub-section (9) of section 14 of the Act expressly made the section applicable to old leases and that sub-s. (1) clearly deprived the landlord of a right which he would have had to claim a forfeiture of an existing lease under the terms of a proviso contained in it. That anactment in question was found in terms to be retrospective. That case cannot help the appellant. Even so the decision in Page v. Bennett, (1860) 29 LJ (Ch.) 398. The argument that under the 4th section of the 22 & 23 Vict C. 35. the Court had no power to grant relief for breaches of covenant accrued after the Act, under leases granted before the Act, because the covenants were entered into before the Act, was overruled in the opinion that the argument and construction of the section were wholly inconsistent with the language and the scope and object of the Act and there was nothing to limit the operation of the Act in the jurisdiction to equitable relief upon breach of the covenant.
(7) Learned counsel contended that on principles of justice, equity, and good conscience relief could be granted and section 114-A must be deemed to be a provision based on principles of justice, equity and good conscience. Even this argument is covered by the decision of the Supreme Court in . Referring to the requirement of
notice 'in writing' in section 111(g) Maharajan, J. observed at page 231:
"Now, so far as section 111(g) of the Act is concerned, the insistence therein that the notice should be given in writing is intrinsic evidence therein of the fact that the formality is merely statutory ad it cannot trace its origin to any rule of equity. Equity does not concern itself with mere forms or modes of procedure. If the purpose of the rule as to notice is to indicate the intention of the lessor to determine the lease and to avail himself of the tenants' breach of covenant it could as effectively be achieved by an oral intimation as by a written one without in any way disturbing the mind of a Chancery Judge. The requirement as to written notice provided in the section, therefore, cannot be said to be based on any general rule of equity."
In this case, in fact, the learned Subordinate Judge find that the plaintiff had brought home to the notice of the lessees their breach and given them an opportunity to remedy the breach. The lessees had ample opportunity to remedy the breach as the suit was filed several years thereafter. Even if it should be held that notwithstanding the express covenant, there is a rule of equity outside statutory provisions requiring the lessor to give an opportunity to the tenant to remedy the breach, in this case that opportunity has certainly been given and there could be no complaint on that score. On the contrary, the tenants have been contumaciously recalcitrant and denying their very tenancy. But where the parties expressly contract for the determination of the lease on breach of a covenant like the one under consideration in the present case and there is no invalidating circumstances in regard to the covenant, the covenant being for the protection of the lessor's trade. I fail to see how unless statutes provide for relief, any principle of equity and good conscience could be invoked. The principles of justice, equity and good conscience which have been administered in our courts are almost wholly based on principles of English law and our view as to equity, good conscience and justice has been determined by what the English courts and the English Legislature have thought with regard to these matters.
(8) In Woodfall on Landlord and Tenant, 26th edition, vol. 1, at page 950 it is stated.
"An unqualified proviso for re-entry in case of breach of any covenant has long been usually inserted as a common form in leases, and the courts of law, though 'learning against Forfeiture' invariably gave effect to such proviso upon a breach being clearly proved, however great the hardship to the lessee."
Prior to the Conveyanying Act of 1881, except in the case of non-payment of rent and failure to insure, and except in rare cases of accident and surprise, no relief against forfeiture could be given. The Conveyancing Act of 1881 has now been replaced by the Law of Property Act 1925 and section 114-A of our Transfer of Property Act follows the provisions of section 146 of the Law of Property Act of 1925.
(9) Learned counsel submitted that in a later case Mohd. Amir v. Municipal Board, Sitapur, : the Supreme Court has
taken the view that Section 111(g) embodies principles in consonance with justice, equity and good conscience, and this rule should be applied notwithstanding the observations in . Having gone through both the decisions carefully, I find no such departure in from the principles enunciated in
as contended. In the provisions of Transfer of
Property Act were not applicable to the area in question and neither the date on which the lessee's ancestors obtained the property on lease nor the terms under which the property on lease nor the terms under which the property was held were clear. The question was whether the lessee had forfeited his leasehold interest by reason of certain acts and conduct of his, whether these acts amounted to repudiation of the title of the landlord. It was not a case of breach of any valid covenant between the lessor and the lessee, as regards the user of the demised property. Their Lordships were dealing in that case with the provision of section 111(g) which provides for the determination of lease of immovable property by forfeiture in case the lessee renounces his character as such by setting up title in a third person or by claiming title in himself. In that connection it is observed at page 1928: "No doubt, the provisions of the Transfer of Property Act were not, it is stated in terms applicable to the area in question, but it has been laid down that the principles embodied in section 111(g) are equally applicable to tenancies to which the Act does not apply on the ground of the same being in consonance with justice, equity and good conscience (See Maharaja of Jeypore v. Rukmani Pattamahadevi = (AIR 1919 PC 1).
(10) In AIR 1919 PC 1 = ILR 42 Mad 589 the Judicial Committee observed that:
"They are directed by the several charters to proceed, when the law is silent, in accordance with justice, equity and good conscience and the rules of English law as to forfeiture of tenancy may be held and have been held to be consonant with the these principles and to be applicable to India."
and proceeded to state:
"Now the rule of English law is that a tenant will forfeit his holding if he denies his landlord's title, in clear, unmistakable terms, whether by matter of record, or by certain matters in pais."
It is that rule of English law (that the disclaimer of title must be unambiguous) as a rule consonant that found application in . It may be stated that in the decision of Chagla,
C. J. and Gajendragadkar, J. (as he then was) in Namdeo v. Narmadabai, which was affirmed by the Supreme
Court in the learned Judges have referred to the
decision in AIR 1919 PC 1 relied on in and pointed out that the Privy Council was considering the question of forfeiture on the ground of disclaimer of title with reference to a transaction prior to the coming into operation of the Transfer of Property Act, Chagla C. J. who delivered the judgment points out, that their Lordships of the Judicial Committee referring to section 111 observed that "it was in substance the placing in a statutory form of the rule of law had been already adopted by the Courts in India."
All that is observed by the Supreme Court in is that the view that the view that sections 105 to 116 of the Transfer of Property Act are founded on principles of reason and equity cannot be accepted either as correct or precise, though to the extent those sections in the Act give statutory recognition to principles of justice, equity and good conscience, they are applicable to cases not governed by the Act. In fact it is observed at page 230 that:
"It is axiomatic that the courts must apply the principles of justice, equity and good conscience to transactions which come up before from for determination even thought he statutory provisions of the Transfer of Property Act are not made applicable to these transactions. It follows, therefore, that the provisions of the Act which are but a statutory recognition of the rules of justice, equity and good conscience also govern those transfers. If, therefore, we are satisfied that the particular principal to which the legislature has not vein effect by the amendment to section 111(g) did in fact represent a principle of justice, equity and good conscience, undoubtedly the case will have to be decided in accordance with the rule laid down in the section, although in express terms it has not been made applicable to leases executed prior to 1929 or even prior to the Transfer of Property Act coming into force."
(11) Learned counsel state that in spite of research they cannot lay hands on any case where, outside the statutory provisions, relief has been granted against express reasonable provisions of a binding contract between the parties. In Debendra Lal v. F.M.A. Cohen, ILR 54 Cal 485 = (AIR 1927 Cal 908), a case before the amendment, relief was not granted in the case of a breach of a covenant to repair. Earlier in the case, I have pointed out that the tenants have all through been defiant and have never been in a mood to remedy the breach. Even if the Court has discretion in the matter and could grant relief against forfeiture outside the provisions of the statute, the present tenants are not persons who can invoke any equitable jurisdiction. In the circumstances, I see no reason to vary the decree of the learned Subordinate Judge, Vellore.
(12) The Second appeal therefore fails and is dismissed. In the circumstances, the parties will bear their own costs throughout. The appellant will have time till 31-3-1967 to dismantle and take away the superstiucture which she is entitled to.
(13) Leave refused.
(14) Appeal dismissed.