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Kandasami Pillai and ors. Vs. Ramasami Mannadi and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Judge
Reported in51Ind.Cas.507; (1919)36MLJ313
AppellantKandasami Pillai and ors.
RespondentRamasami Mannadi and ors.
Cases ReferredSubba Rau v. Devu Shetti
Excerpt:
.....in the plaint. ' further it says, you shall enjoy according to your choice the coffee. but the transfer of property act, when it defines a lease of immoveable property by section 105, gives a definition which is undoubtedly applicable to agricultural leases as well in this country. 'a lease of immoveable property is a transfer of a right to enjoy such property, etc,'now section 108 lays down the rights and liabilities of the lessor and the lessee. it is not a mere contract, it is a transfer of a right to enjoy the property. 254 the distinction between executory and executed contracts is well known, as pointed out in wolverhampton and walshall railway v. what the plaintiffs seek is a remedy in law, and their right to possession cannot be defeated by pleading laches or any other..........argued that this is a case of reciprocal contracts, and that the lessor is only bound to put the lessee in possession after the lessee has paid or is prepared to pay the premium that is agreed upon. this, to my mind, proceeds entirely on a misconception of the true nature of a lease and of the rights of the parties arising from such a transaction. it is not a mere contract, it is a transfer of a right to enjoy the property. that means it is a transfer of an interest in immoveable property, and section 108 assumes it is a transfer of such an interest. the right of the lessee to he put into possession arises from the words of the demise which imply that the right to possession is granted to the lessee, and the lessor is not entitled to refuse to give possession to the lessee unless the.....
Judgment:

Abdur Rahim, J.

1. I entirely agree with the judgment of the learned Chief Justice and will only shortly give my reasons for the conclusion I have arrived at. The plaintiffs obtained a lease for 17 years of a certain garden from the owner of the property, the 1st defendant in the suit. The document provides that the plaintiffs are to discharge a prior encumbrance to the extent of Rs. 2,805 besides making two other small payments. They failed to discharge the encumbrance, and the mortgagee, whose debt they had bound themselves to discharge, brought a suit to enforce the mortgage and obtained a decree. In the meantime, while the suit was pending, the 1st defendant granted a usufructuary mortgage to defendants Nos. 4 to 7 and with the money so realised the mortgage decree was paid off. The Subordinate Judge in the Court of trial held that, since the plaintiffs failed to pay the amount stipulated for in the document, they were not entitled to possession of the properties, which was their chief prayer in the plaint. On appeal to this Court, the learned Chief Justice was of opinion that the fact that the plaintiffs had not paid the amount mentioned in the lease, was no answer to their suit for possession; while Kumaraswami Sastri, J, the other learned Judge who heard the appeal, disagreed and confirmed the decree of the Subordinate Judge.

2. On behalf of the respondents Mr. K. Rajah Aiyar sought first of all to argue that the document in question,. Exhibit L, was not a lease at all, but a mere contract with respect to the future produce of certain trees. In the first place, this was not their case, up till now, and the written statement itself proceeds on the assumption that Exhibit L is a lease. No doubt it is called a contract relating to coffee and plantain produce. But that description is not ipso facto conclusive. We find that the document goes on to state 'I have granted to you on lease the coffee, plantain, and jack produce belonging to me.' Further it says, 'you shall enjoy according to your choice the coffee. plantain and jack produce * * * * for 17 years from this date, and, on the expiry of the term, surrender the lands to me without any objection whatsoever. The assessment due for this land shall be paid by me;' then it gives the boundaries of the land. There can be no doubt whatever that what the parties contemplated was a lease. We have got all the apt words of a conveyance by way of a lease. There would be no sense in talking about surrendering the lands, if it was only the future produce of certain trees apart from any interest in the land that was meant to be granted. Proceeding on that basis, there cannot be any doubt to my mind upon the authorities that the lessee is entitled to possession of the land demised to him, even though he has not paid the premium he bound himself to pay. This is an agricultural lease and, therefore, the Transfer of Property Act in its terms does not apply. But the Transfer of Property Act, when it defines a lease of immoveable property by Section 105, gives a definition which is undoubtedly applicable to agricultural leases as well in this country. Mr Rajah Aiyar did not attempt to argue that the definition of a lease as contained in Section 105 is not applicable to agricultural leases. Section 15 says: 'A lease of immoveable property is a transfer of a right to enjoy such property, etc,' Now Section 108 lays down the rights and liabilities of the lessor and the lessee. Clause (b) of that section provides that 'the lessor is bound on the lessee's request to put him in possession of the property,' and Clause (1) says that 'the lessee is bound to pay, or tender at the proper time and place, the premium or rent to the lessor or his agent in, this behalf.' And it is argued that this is a case of reciprocal contracts, and that the lessor is only bound to put the lessee in possession after the lessee has paid or is prepared to pay the premium that is agreed upon. This, to my mind, proceeds entirely on a misconception of the true nature of a lease and of the rights of the parties arising from such a transaction. It is not a mere contract, it is a transfer of a right to enjoy the property. That means it is a transfer of an interest in immoveable property, and Section 108 assumes it is a transfer of such an interest. The right of the lessee to he put into possession arises from the words of the demise which imply that the right to possession is granted to the lessee, and the lessor is not entitled to refuse to give possession to the lessee unless the document provides that the latter is not to have possession until the fulfilment of a certain condition. It is found by both the Courts that no such condition exists in this case. No doubt there are also other rights and liabilities, both of the lessor and the lessee, which are set out in Section 108, Transfer of Property Act, and which arise out of the general law governing the relations of landlord and tenant. The liability of the lessor to put the lessee in possession may be said to arise out of the implied covenant applying to leases, as put by my learned brother, Coutts Trotter, J. in Secretary of State v. Pemmaraja Venkayya Garu 35 Ind. Cas. 254 The distinction between executory and executed contracts is well known, as pointed out in Wolverhampton and Walshall Railway v. L. & N.W. Ry. (1873) 16 Eq. 433. A lease is an executed contract, it is a transfer of property or of an interest in property; and all the considerations which apply to the enforcement of mere contracts do not necessarily apply to a transfer.

3. We have been referred to a number of cases, both of this Court and other Courts, in which it is laid down that a vendee of immoveable property is entitled to possession of the property even though he has not paid the consideration mentioned in the deed of sale see for instance Velayutha Chetty v. Govindasami Naicker 8 Ind. Cas. 864; Velayutha Chetty v. Govindaswami Naiken 3 M.L.T. 10 and Govindammal v. Gopalachariar 16 M.L.J. 524 and this proposition Mr. Rajah Aiyar has not contested before us. But he says there is a distinction between a sale and a lease. His argument is that a lease for a term stands on no higher footing than a mere contract, and he has referred us for this position to the English Law. In English Law no doubt a lease for a term is a mere chattel interest and has been treated as such in some of the oases, for instance, by Justice Chitty in Wallis v. Hands (1893) 2 Ch. 75. But he has not been able to cite any Indian cases to show that these technical distinctions of English Law between real and chattel interest in land obtain in India. Speaking for myself, I am not aware that the peculiarities of English Law as regards leases for a term have ever been adopted in this country. The law regarding real property in India is, in many respects, very different from that of England, and it is especially so regarding leases; for instance Indian law recognises leases in perpetuity which are unknown to the English Law, though it recognises leases for such terms as for 99 years or 999 years. And 1 do not think I should be justified in importing the technicalities of English Law relating to leases for terms into this country.

4. Mr. Rajah Aiyar's main argument has been that there is some sort of equity in his clients' favour and, therefore, we ought to deny the plaintiffs the remedy which they seek, viz., recovery of possession. What the plaintiffs seek is a remedy in law, and their right to possession cannot be defeated by pleading laches or any other considerations of that kind, which might be effective if the suit was one for some relief in equity. Reliance was placed on Section 39 of the Indian Contract Act, IX of 1872. But this is not a case for enforcement of a contract. The plaintiffs' right to possession arises out of the interest which they have acquired in the land and the doctrine regarding mutual promises has, therefore, no application. Then we have also been referred to Section 35, Specific Relief Act, which deals with recission of contracts on grounds of misrepresentation, fraud and the like. Our attention was specially drawn to the illustrations which speak of rescission of sale and other transfers on the ground mentioned in the section. But the section deals with cases in which the contract is vitiated by reason of misrepresentation or fraud, and, if the contract which led to the transfer is voidable, that is, liable to be set aside, the transfer based upon it necessarily fails. But the plea of the respondents in this case is based, not upon anything which would make the contract relating to the lease liable to be set aside, but on something which happened after the grant of the lease, viz., non payment of a certain sum of money mentioned in the lease. Section 35, Specific Relief Act, has no application

5. Reliance has been placed on two decisions, one of the Allahabad High Court in Chhctku Rai v. Baldeo Shukul 17 Ind. Cas. 340 and another of this Court, in Subba Rau v. Devu Shetti 6 Ind. Dec. 437 the former is referred to by Kumaraswami Sastri, J. in his judgment. In the Allahabad case, certain property was mortgaged and only a portion of the mortgage amount was paid. The mortgagor sold the mortgaged property and his assignees sued for redemption of the mortgage before the expiry of the term of the mortgage, and it was held on equitable grounds that the plaintiffs should be allowed to redeem before the expiry of the specified term. The learned Judges do not, however, lay down any general principles of law which I should feel justified in adopting and applying to this case; all that they say is, that the defendants not having performed what we deem to be a most essential part of the contract so far as they are concerned, the plaintiffs ought to be allowed to redeem the property before the expiration of 10 years.' They cite no authority and do not enunciate any general and well-recognised principle of equity by which the case could be said to be governed. With all respect to the learned Judges, it is not open to us to proceed on some sort of vague equitable grounds, especially in a case like this, where the plaintiffs are seeking a remedy in law. As regards Subba Rau v. Devu Shetti 6 Ind. Dec. 437 one of the learned Judges, Muthuswami Aiyar, J., says in his judgment, 'upon the facts found the Subordinate Judge obviously considered the original mortgage as lawfully cancelled.' The facts of that case are not to be found in the report and it is not clear how the in strument came to be cancelled. I do not think that the judgment can be said to lay down any general proposition that can be applied to the present case.

6. I am of opinion that the judgment of the learned Chief Justice is right. It was noticed during the course of the argument that the learned Chief Justice gave a decree to the plaintiffs on condition of their paying the prior mortgage and that respondents Nos. 4 to 7 were entitled to retain possession until they have been repaid. But the form of the decree has not been challenged before us by the learned Pleader for the appellants.

7. The result, therefore, will be that the judgment of Kumaraswami Sastri, J., is set aside and there will be a decree in favour of the plaintiffs to the effect that they will be entitled to possession of the property on paying the money due under the mortgage decree in Original Suit No 87 of 1912, and until then respondents Nos. 4 to 7 will remain in possession. The appellants are entitled to their costs throughout.

Oldfield, J.

8. I agree.

Cootts Trotter, J.

9. I agree and wish to add only a few words. The appellants (plaintiffs) were lessees under a deed of lease and I have no doubt that the deed of lease was a present demise and nothing else. As long ago as the case of Holder v. Taylor (1613) Hobert 12 which was decided in the beginning of the 17 th century, it was laid down that the word 'demise' in a lease involves by necessary implication a covenant or contract or call it what you will on behalf of the lessor to give instantaneous and complete possession to the lessee. In this case, the lessor was under an obligation to give possession to the lessees. Certain other obligations were cast on the lessees by the instrument of lease, and among them was an obligation to discharge an existing encumbrance by the payment of certain sums of money. The plaintiffs failed to do that. They broke their obligation to pay off this encumbrance and the result was that respondents Nos. 4 to 7 in this case stepped into the breach, paid off the old encumbrancer and took from the owners of the land an usufructuary mortgage. The mortgage paid off was not an usufructuary mortgage but a simple hypothecation without rights of possession. The question is whether the respondents Nos. 4 to 7 can be allowed to plead their usufructuary mortgage in derogation of the right claimed by the plaintiffs.

10. Now, as I understand it, you can defeat the right to possession under a lease in various ways. If it is only an agreement for a lease all sorts of equitable pleas are open by way of reply to an action for specific performance, and any breach of contract by the person seeking to enforce the contract, and any breach by him of any of the provisions of the contract, might be a very excellent answer to his suit for specific performance. If it is a demise, you can show that there was a condition precedent to its taking effect as such. That is just what was attempted to be done in this case. That defence broke down and it was held that the obligations of the lessees were not conditions precedent, but were merely mutual concurrent contracts or covenants between lessor and lessee. Or you can show that the whole thing is void, because the making of the contract was vitiated by fraud, coercion or misapprehension. That is not this case, and no such ground is suggested. What is the result? The result is that the respondents are seeking to destroy the right to possession given by the instrument by setting up a breach of contract which arose subsequent to the obligation to give possession. That seems to be an obviously impossible defence. It is for the safeguarding of those rights of a lessor that covenants of re entry are inserted in leases, whereby a breach of contract by the lessee subsequent to the lease may entitle the lessor to re-enter and get back possession of the land. But, in my opinion, that must be under a specific covenant of re entry in the lease. If there is no such Clause, there can be no right to get back possession of the land. If Section 39 of the Contract Act applies, this document is not a transfer of property or of any interest in the land, but is a mere bundle of mutual obligations under a contract. I think much confusion has arisen from the fact that the English Law of real property makes a very sharp distinction between those rights over property which are termed 'real' rights and 'chattel' interests in property which are mere personal rights. I think that is a peculiar incident of. the English Law of property with its very curious history, and it seems to me that it is not necessary to complicate Indian Law by seeking to import such technicalities of English Law into India. In the case reported as Secretary of State v. Pemmaraju Venkkayya Garu 35 Ind. Cas. 254 I took very great care in deciding the question of the leasehold interest which then came up, not to base my judgment on technicalities peculiar to English real property law but on general principles which seemed to me to apply. I think that the introduction of the English conception of chattel interests in land might lead to the conclusion that nothing had passed by way of transfer, that there was a mere bundle of rights and that Section 39 of the Contract Act applied. To my mind that could be arrived at only by importing the English doctrine and, speaking for myself, I must decline to adopt that course. That being so, 1 regard this instrument not as a mere executory contract but as a transfer of an estate. Section 39 of the Contract Act, in my opinion, applies only to a state of things where there is a series of executory promises on both sides; and so soon as one part of the obligation has been performed by a complete transfer of the property in question, that section ceases to have any application.

11. As regards the decision reported as Ghhotku Rai v. Baldeo Shukul 17 Ind. Cas. 340 all I can say is that I do not understand it as reported, nor do I gather upon what principle the learned Judges proceeded. With regard to the case in Subba Rau v. Devu Shetti 6 Ind. Dec. 437 I have no hesitation in saying that unless it can be explained by an omission in the report as to the existence of an express power of cancellation, it must be regarded as contrary to the trend of authority.

12. I think that the order of the learned Chief Justice is right. It may be that the appellants might have got further relief. But they have contented themselves with the Chief Justice's judgment.


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