1. We agree with the Courts below that on the true construction of the lease (Exhibit A) the sub-lease by the first defendant's father did not work a forfeiture. The Lower Appellate Court in holding that, assuming there was a forfeiture by reason of nonpayment'of rent, it could not be enforced as the plaintiff had not done any act to show he intended to avail himself of the forfeiture, would seem to have followed the decision of this Court in Venkalramana Bhatta v. Gundaraya 31 M.K 403. In that case, however, it was not brought to the notice of the Court that the lease in question was prior to the coming into operation of the Transfer of Property Act. The lease in the present case, was made in 1871 before the Transfer of Property Act came into operation and this being so, according to the decision in Padmanabhaya v. Ranga 34 M. K161 an act on the part of the landlord showing that he elects to take advantage of the forfeiture is not a condition precedent to his right to sue in ejectment. There is no finding by the Lower Appellate Court as to whether, on the construction of the lease, non-payment of rent operated as a forfeiture. We accordingly send;back the case to the Lower Appellate Court for a finding on this question and also, if the Court holds there has been a forfeiture by reason of the non-payment of rent, for a finding as to the terms, if any, on which the defendant is entitled to be relieved against the forfeiture. The findings should be submitted within one month after the reopening of the Sub-Court and seven days will be allowed for filing objections.
In compliance with the order contained in the above judgment, the Subordinate Judge of South Canara submitted the following.
FINDING:-The two issues on which this Court has been directed to submit its findings are (1) Whether on the construction of the lease non-payment of rent operated as a forfeiture? (2) If there has been a forfeiture by reason of the non-payment of rent, whether the defendant is entitled to be relieved against it on any and what terms? The stipulation in question in the suit lease A is to this effect 'I have no cause whatever either... or to keep the rent in arrears. In case any small portion of the aforesaid rent is kept in arrears or in case... I shall deliver back the said land etc. and all to you without demanding from you the value of the improvements made by me.' As observed in VI Madras 159, from the circumstance that the stipulation in question is that, if any portion of the rent should fall into arrears, the property should be surrendered with all right to improvements (i.e.,) without claiming the value of improvements, it might bo reasonably inferred that such provision was made in order that it might operate as a fear in the mind of the lessee that the rent should bo regularly paid and the parties did not seriously intend that it should be acted upon. In a word, this stipulation was inserted in terrorem (see also VI Madras High Court Beports page 258).
2. Further, there is this important fact that the leases does not provido for any period of grace in rospoct of the payment of arrears of rent. It has been sottlod beyond any doubt or controversy that, when such is the case, tho forfeiture arising from non-payment of rent will be one that can bo relieved against (Vide Mahalakshmi Amma v. Lakshmi : (1911)21MLJ960 Narayana Naicker v. Vavudeva Bhatta I.L.R. (1903) M. 389, Naruyana Kanti v. Handu Shetty (1901) 15 M.L.J. 210 and Artiraja, Shelly v. Billa Tyampu : (1910)20MLJ944 Having regard to the intention of the parties, which can be gathered and reasonably inferred from tho insertion of such stipulation as the one in question and also to the circumstance that the lease provides for no period of grace, I should hold that the forfeiture under consideration is one that can be relieved against. Tho defendants are entitled to have such equitable relief granted to them.
3. Before the defendants can claim such equity, they muse be prepared to do equity. It will be incumbent upon them to pay up tho arrears of rent duo by them. The 2nd defendant pleaded discharge. The 2nd issue in tho case was ' whether the payments of rent and thirva pleaded are true.' There was no evidence to prove that issue' and it was found in the negative. The rent claimed by the plaintiff is due to him. Tho defendants not only failed to tender it in Court but also set up a false plea of discharge. The plaintiff will be entitled to get the arrears of rent due to him and that with interest. Having regard to the fact that there was no tender on the part of the defendant even after the suit was brought--but lie, on the other hand, falsely pleaded payment, it will not be unreasonable or inequitable to allow plaintiff interest at the rate of 12 per cent, per annum. Plaintiff will also be entitled to get his full costs of tho suit, including the costs on the claim for recovery of possession of tho suit property (vide Subbaraya Kanti v. Krishna Kanti. I.L.R. (1882) M. 159
4. For paying up the plaintiff the arrears of rent claimed by him witli interest thereon at 12 per cent, per annum, from the date on which the rent fell due up to the date of payment and also full costs, some reasonable time will have to be allowed to the defendants. Under the circumstances I am of opinion that it will be sufficient if 3 weeks' time from the date of disposal of this second appeal in the High Court is allowed to them. Thoro will be no loss or inconvenience to the plaintiff as he gets interest at the aforesaid rate up to the date of payment. If the defendants, with a view to avoid the burden of paying interest, wish to pay up the amount earlier they will be at liberty to pay it to the plaintiff through Court.
5. For the reasons set forth above, I find on these two issues that if the Defendant should pay up what is mentioned supra within the time specified therein, they would be entitled to have the forfeiture in question relieved against.
6. The case came on before the Bench constituted as above.