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Talbot and Co. Vs. Haricharan Halwasiya and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Case NumberSuit No. 1496 of 1947
Judge
Reported inAIR1952Cal47
ActsTransfer of Property Act, 1882 - Sections 111 and 112; ;Code of Civil Procedure (CPC) , 1908 - Section 2 (12) - Order 20, Rule 12
AppellantTalbot and Co.
RespondentHaricharan Halwasiya and ors.
Appellant AdvocateE.R. Meyer, Adv.
Respondent AdvocateS.C. Talukdar, Adv.
Cases ReferredGurudas v. Hemendra Kumar
Excerpt:
- .....in sub-paras (a) and (b) of para. 5 of the written statement?3. is the notice of determination of lease by forfeiture valid and/or sufficient in law?4. are the plaintiffs entitled to mesne profits at the rate of rs. 60/- per diem as alleged or at all?'mr. meyer learned counsel for the plaintiffs accepted those issues. the onus being upon the defendants in the first three issues the defendants called evidence first. on behalf of the defendants gosto behari biswas, the manager and accountant of the defendants, jyotsna kumar mitter, secretary to the managing director of poddar automobiles, hari prasad bhattacharyya, an accountant of walford co., and defendant hari charan halwasiya have been examined. on behalf of the plaintiffs s. a. basil, the senior partner of messrs. talbot & ' co. and.....
Judgment:

P.B. Mukharji, J.

1. This is a suit by Messrs. Talbot & Co., a registered firm, for the recovery of possession of the premises No. 113, Park Street, Calcutta. There is also a claim for mesne profits.

2. Messrs. Talbot & Co. were appointed Receivers of the said premises by order of Lort-Williams J. in Suit No. 991 of 1929, 'Sm. Provabati Debi v. J. C. Galstaun and Ors.' That order was made on 12-5-1930. By a further order made in that suit by Ameen Ali J. on 12-1-1938 the plaintiffs as Receivers were given liberty to grant lease for 10 years of the said premises to Messrs. Ganeshdas Ramgopal. The present defendants are carrying on business under the name and style of Ganeshdas Ramgopal at 1, Chittaranjan Avenue, Calcutta. Originally there were 3 defendants one of whom - Nawal Kishore Halwasiya - died pending the suit and the necessary amendment was duly made bringing on the record the legal representatives of the deceased defendant. In pursuance of the leave granted by this Court the plaintiffs on 4-3-1939, granted a lease of the said premises 113, Park Street to defendant Hari Charan Halwasiya, the deceased defendant Nawal Ki-shore Halwasiya and defendant Detai Prosad Halwasiya for the period of 10 years commencing from 16-10-1937. By Clause 1 (8) of the said lease it was provided as follows :

'That the lessees will not transfer or charge by way of sale, mortgage, assignment, 'sublease or' otherwise or part with possession of the demised premises or any part thereof or any interest therein or the right or enjoyment (hereof without the previous consent in writing of the lessors (which consent the lessors shall in their absolute discretion be entitled to give or refuse) nor suffer or permit their interest therein to be attached or a Receiver to be appointed of any of their property, estate or effects.'

Clause 3 (1) of the said Lease provided inter alia as follows :

'That in case of any breach of any of the covenants or conditions by the lessees herein contained and on their part to be observed and performed it shall be lawful for the lessors at any time thereafter (and notwithstanding any waiver of any breach) into or upon the demised premises or any part thereof in. the name of the whole to re-enter and immediately thereupon this demise shall absolutely determine but without prejudice to any other rights the lessors may have against the lessees.'

3. It is alleged in the plaint that the defendants committed breach of the covenant against sub-letting and that they in fact in breach of such covenant sub-let a portion of the said premises to Messrs. Poddar Automobiles without the previous sanction in writing of the plaintiffs. The plaintiffs came to know about the breach on or about 24-2-1947 and by notice dated 28-2-1947 the plaintiffs gave notice in writing to the defendant of their intention to forfeit and determine the said lease.

4. There are other breaches of other covenants alleged in the plaint but it is unnecessary for mo to refer to them because such allegations have been abandoned, before me and no issue has been raised on the same.

5. All the original defendants filed a joint written statement. Their case in the defence is that on or about 3-12-1946, they sublet a portion of the said premises to Messrs. Poddar Automobiles but they deny that such subletting was in breach of any of the covenants of the said lease or that the plaintiffs came to know of such subletting on or' about 24-2-1947. Then the defendants take the defence of waiver in their written statement. The defence is that the forfeiture has been waived by the plaintiffs and the particulars of such waiver are set out in Para. 5 of the written statement. The particulars are that on 26-2-1947 the plaintiffs with full knowledge of subletting demanded payment of rent for the month of January 1947 and the defendants paid such rent by Cheque dated 26-2-1947 for the sum of Rs. 763/- and which cheque is said to have been retained by the plaintiffs. The other particulars of waiver are said to be contained in the plaintiffs' solicitors' letter dated 29-4-1947, alleged to recognise the continued existence of the said lease.

6. Mr. Sunil C. Talukdar counsel for the defendants raised the following issues:

'1. Was the subletting in breach of the covenants in the lease? 1952 Gal./T & 8

2. If so, has it been waived in the manner set out in sub-paras (a) and (b) of Para. 5 of the written statement?

3. Is the notice of determination of lease by forfeiture valid and/or sufficient in law?

4. Are the plaintiffs entitled to mesne profits at the rate of Rs. 60/- per diem as alleged or at all?'

Mr. Meyer learned counsel for the plaintiffs accepted those issues. The onus being upon the defendants in the first three issues the defendants called evidence first. On behalf of the defendants Gosto Behari Biswas, the Manager and Accountant of the defendants, Jyotsna Kumar Mitter, Secretary to the Managing Director of Poddar Automobiles, Hari Prasad Bhattacharyya, an Accountant of Walford Co., and defendant Hari Charan Halwasiya have been examined. On behalf of the plaintiffs S. A. Basil, the senior partner of Messrs. Talbot & ' Co. and John Simon Gregory, an Employee of the plaintiffs have been examined. Apart from the oral evidence of the witnesses there is an admitted brief of documents and correspondence which has been marked by consent as Ex. 'A' in this suit.

7. 'Issue No. 1' : Subletting to Ganeshdas Ramgopal is an admitted fact. It is also an admitted fact that there is no particular permission in writing given by the plaintiffs to the defendants to sublet the said premises to Poddar Automobiles. The written statement of the defendants admits the subletting and states that the said subletting to Poddar Automobiles was made on 3-12-1946. Gosto Behary Biswas has also said so in his evidence.

8. What has been urged before me by the learned counsel for the defendants is that the letter dated 2-9-1940 written by the plaintiffs to Ganeshdas Ramgopal is a general permission in writing given to the defendants to sublet to anybody the defendants liked. On that basis it is argued that even if there was subletting it was not in breach of the covenant of the lease but in compliance with C. 1 (8) of the Lease 1 have quoted above, the letter of 2-9-1940 being the sanction of the landlords in writing. It is a question of construction of the letter dated 2-9-1940. In my opinion the letter of 2-9-1940 is not such a general permission as the defendants contend. The language of the letter makes it quite clear that it was a specific permission to let out a portion of the premises to the particular party, viz., Messrs. Walford Transport Ltd. That letter refers to a letter of 30-8-1940. written by defendant Hari Charan Halwasiya for Ganeshdas Ramgopal to the plaintiffs. That letter of 30-8-1940 specifically asks for sanction to sublet a portion of the said premises to Walford Transport Ltd. I read the letter of 2-9-1940 as an answer to the letter of 30-8-1940. The evidence of Mr. Basil the senior partner of the plaintiffs on the facts leaves no room for doubt. In my judgment, therefore, the proper construction of the letter of 2-9-1940 is that it is a special permit given to Walfords and to none else. As there is nothing else in writing which can be said to permit subletting to Poddar Automobiles I have come to the conclusion that the subletting to Poddar Automobiles by the defendants is a breach of the covenants contained in Clause 1 (8) of the Lease.

9. I, accordingly, answer the issue in the affirmative.

10. 'Issue No. 2' : Two grounds have been urged before me in support of the plea of waiver. The first is that the demand for payment of rent on the 26th or rather more accurately on 28-2-1947, for the month of January, 1947, being with the knowledge of subletting to Poddar Automobiles constitutes waiver. It is also said that the retention of the cheque dated 26-2-1947 sent by the defendants as rent for January 1947 is also waiver.

11. According to the plaintiff's their knowledge of subletting by the defendants to Poddar Automobiles was gathered from the letter dated 24-2-1947, where for the first time Ganeshdas Ramgopal wrote to inform the plaintiffs that they had sublet the premises to Poddar Automobiles on a monthly tenancy and that letter proceeded to inform the plaintiffs to make a note of the same. The oral evidence of Mr. Basil on the point has convinced me that the plaintiffs did not know of this subletting before the letter of 24-2-1947 was received by the plaintiffs. (After dealing with the evidence of Gosto Behari Biswas, defendant Hari Charan Halwa-siya, his Lordship scrutinised the correspondence that passed between the solicitors of the parties and restated his conclusion:) I, therefore, hold that the plaintiffs came to know of the subletting from the letter of 24-2-1947, and did not know of such subletting prior to that date.

12. I come now to the letter of 28-2-1947 written by the plaintiffs' advocate Mr. K. P. Chatterjee. It is argued on behalf of the defendants that by writing that letter the plaintiffs waived the forfeiture. I propose to analyse the letter before I state my conclusion on this point. This letter charges the defendants with breach of the express condition and states clearly that such breach is that the defendants had sublet the said premises to Messrs. Poddar Automobiles without the plaintiffs' previous consent. There is also no answer to this letter denying this allegation and stating that there was any consent by the plaintiffs to the defendants for subletting the premises to Poddar Automobiles. The letter of 28-2-1947 proceeds further to state that by reason of such breach the plaintiffs were entitled to re-enter and notice is given by that letter of the intention to determine the lease. In clearest terms the letter states 'the said lease stands determined by forfeiture.' From this analysis it will appear that there was no demand for payment of rent by this letter at all as contended by the defendants. It is a letter which is the notice of forfeiture under Section 111(g) of the Transfer of Property Act and in my opinion on a construction of that letter I fail to see how it can constitute waiver. The knowledge of the breach so far as the plaintiffs were concerned dates from the letter of 24-2-1947 and within 28-2-1947 far from the breach being waived the notice of forfeiture is

13. A word must be said here about the cheque dated 26-2-1947. This is marked as Ex. 3 of this suit. This is a cheque drawn by Ganeshdas Ramgopal in favour of the plaintiffs on the Bharat Bank Ltd. for the sum of Rs. 763/- being the rent for the month of January 1947. That it was rent for January 1947 is admitted in the written statement as will appear from the allegations in Para. 5 (a) of such written statement This cheque was not cashed by the plaintiffs and has not yet been cashed I will state in some details the history of this cheque. The letter of 27-2-1947 from the plaintiffs to the defendants shows that this cheque was handed over to the plaintiffs' Bill-Collector on 26-2-1947, against the rent bill for the month of January 1947 dated the 31st January 1947. That letter shows that the cheque was retained and before cashing the cheque the plaintiffs wanted to know the exact date of subletting by the defendants. It has also transpired in the evidence that there is a departmental note from Mr. Basil to his Accounts Department which is marked as Ex. 'B' in this suit. Ex. 'B' bears the endorsement in pencil of Mr. Basil to the following effect: 'Accounts: Do not cash this cheque until you hear from me.' I accept without hesitation Mr. Basil's evidence on this point particularly because it corresponds with the facts stated in the letter of the 27th February 1947. The final letter on this point was from, the plaintiffs to the defendants dated 21st March 1947 stating that the plaintiffs refuse to cash the cheque and asking for the return off the Rent Bill in exchange of the cheque. But the defendants did not comply with that request of the plaintiffs.

14. The forfeiture took place in my opinion by the notice dated the 28th February 1947. Rent for the month of January 1947 was therefore admittedly due and payable by the defendants. Even if the cheque were cashed I would; not have considered that to be waiver. In my opinion the plaintiffs are entitled to payment of rent which accrued 'due prior' to the date of forfeiture. Section 112 of the Transfer of Property Act provides that a forfeiture is waived among other things 'by acceptance of rent which has become due 'since' the forfeiture.' The words 'due 'since the forfeiture' are words which in my opinion qualify the word 'rent' in that section. In my judgment therefore acceptance of rent which became due before the forfeiture does not constitute waiver.

15. I, therefore, hold that the facts set forth in sub-para (a) of Para. 5 of the written statement do not constitute a valid and sufficient plea of waiver in law.

16. The second ground urged in support off waiver is that the letter of the 29th April 1947 written by Messrs. Fox & Mondal, solicitors for the plaintiffs constitutes waiver of the forfeiture. On an analysis of the letter I find it repeats that the lease in favour of the defendants stands determined by forfeiture on and from the 28th February 1947 and states 'rent is therefore payable to our clients upto the 27th February 1947'. This again is not a demand for rent that has accrued due since the forfeiture and therefore cannot be said to be waiver under Section 112 of the Transfer of Property Act. As I have said before the least stood forfeited from the 28th February, 1947. Rent, therefore, was payable until the date of forfeiture and that is all that was claimed by the plaintiffs' solicitors in their letter of the. 29th April, 1947.

17. The particulars of waiver given in the written statement do not in my judgment constitute a sufficient waiver of forfeiture in law. Waiver as I have said before in 'Surendra Chandra v. Sm. Panchi Bibi', 83 Cal L Jour 327 is an intentional relinquishment of a known-right. The foundation of waiver is knowledge of the person who is said to waive his rights and there cannot be waiver in ignorance. The principle is recognised also in the first proviso of Section 112 of the Transfer of Property Act. Unless, therefore, the lessor is aware that forfeiture has been incurred there cannot be any question of waiver of forfeiture. The governing principle in a case of waiver is whether the lessor has shown an intention to treat the lease as subsisting after forfeiture. The words 'the lessor showing an intention to treat the lease as subsisting' in the first paragraph of Section 112 of the Transfer of Property Act illustrates this principle of waiver. The word 'Other' in the expression 'by any other act' shows that the two other acts mentioned previously in that section viz: (1) acceptance of rent which becomes due since the forfeiture and (2) distress for such rent are regarded by the Statute as two typical acts which show the intention of the lessor to treat the lease as subsisting. Forfeiture of a lease requires the operation of two factors, one is a breach by the lessee, of an express condition of the lease which provides for re-entry on such breach and the other is a notice by the lessor expressing his intention to determine the lease. These are the two basic requirements of forfeiture. The moment a breach of such an express condition providing for re-entry is committed by the lessee the lease becomes voidable by the lessor but the forfeiture is not complete unless and until the lessor elects to avail of the breach by giving notice of his intention to determine the lease.

18. Applying these tests contained in the two fundamental principles which I have just enunciated on the law regarding waiver of forfeiture I find that the plaintiffs in this case had no knowledge of the subletting before the letter of the 24th February 1947 and I find also that they have not done any act which can be said to show an intention on their part to treat the lease as subsisting inspite of forfeiture. In the ultimate analysis on juristic foundation the concept of waiver is in essence based on agreement. In other words the landlord must agree to waive the forfeiture or more accurately the breach of the express condition which leads to forfeiture. Such agreement may be imported from any provision contained in the statute or may be by express conduct of the lessor from which an agreement will be implied as a necessary corollary to the act or conduct of the lessor. It is neither desirable nor possible to lay down any hard and fast rule which can be said to exhaust the categories of acts which can be regarded as showing an intention of the lessor to treat the lease as subsisting. Each case must be decided on its own merits and on the basis of the two fundamental principles I have indicated.

19. Waiver of past breaches in my judgment does not preclude the lessor from enforcing a. forfeiture when the same or any other condition is 'subsequently' broken, it being understood that the condition is such that the breach thereof provides for re-entry. It is argued on behalf of the defendants in this case that the plaintiffs had given their consent in writing for subletting a portion of the said premises to Walford Transport Ltd. That does not mean in my opinion that the lessee could go on subletting the premises to other persons or parties in breach of the covenant. As Harries, C. J. in a decision of the Patna High Court 'Md. Hasan v. Baidyanath', AIR (27) 1940 Pat 140 points out that waiver of a particular breach does not mean waiver for ever. I respectfully follow that decision.

20. It is necessary to observe in more specific detail the case of a breach of the express condition against subletting providing for re-entry such as the one in the present case before me. It has been argued that subletting is an act of a continuing nature and that where the breach is of a continuing nature waiver of a particular breach is a waiver for ever. I am unable to accept that argument. In my judgment where the breach is of a continuing nature the continuance of the breach after the waiver will justify a forfeiture and it will not be open to the lessee to say that because past breaches of the same condition have been waived its future breaches or continuing breaches after waiver are also to be deemed to have been waived and condoned. The only limitation on this principle is that in the case of the breach of a condition not to sublet the waiver operates during the continuance of the entire period of the interest which the particular subletting created. But when the entire period of the offending sublease is over the past waiver will not protect fresh breach of the same covenant not to sublet. Formerly express waiver for a particular breach was regarded as a total waiver of the covenant itself. But that is usually regarded in this breach of the law as a relic of 'Dumpor's case' (4 Co. Rep. 119a). It is needless for me here to say that 'Dumpor's case' has never been followed in India. In other words a waiver of the benefit of a covenant or condition in a lease only ex-tends to the particular breach of the covenant or condition to which it relates and is not a general waiver of the benefit of that covenant or condition.

21. The argument of the defendants that demand for rent for January 1947 or even for rent upto the 27th February 1947 although prior to the date of forfeiture constitutes waiver must be overruled. Acceptance of rent to operate as a waiver of forfeiture must be in respect of rent which accrued since the forfeiture.

22. In 'Price v. Worwood' (1859) 4 H & N 512 : 157 ER 941 Baron Martin observed :

'the mere receipt of the money the rent having become due previously is of no consequence and for the very plain reason that the entry for a condition broken does not at all affect the right to receive payment of a pre-existing debt.'

23. The argument of the learned counsel for the defendants on an analysis will be found to lead to impossible results. Here in this case the notice of forfeiture was given on the 28th February 1947. From that date the lease stands avoided. It is true that the knowledge of the breach by subletting was conveyed to the plaintiffs by the letter of the 24th January 1947. But the information of that breach by the defendants to the plaintiffs only made this lease liable to be forfeited but the actual date of the forfeiture is the date of the notice of the forfeiture. In my opinion where a forfeiture has been incurred for breach of any condition the lessor must do some act evidencing his intention to avail of the forfeiture and that act under the Transfer of Property Act is to give notice to determine the lease and the lease will be avoided from that time only. Woodfall on 'Landlord and Tenant', 24th Edn., p. 920 expresses the same view. The learned Author goes further to say:

'in an action for ejectment for forfeiture the lessor will be entitled to the mesne profits as from the date of re-entry and not from the date of the breach. The actual entry may be either peaceable without any action at law or by means of an action at law.'

If any authority is needed the observations of Pollock M. R. in 'Elliott v. Baynton' (1924) 1 Ch 236 may be referred to. If the argument of the defendants' counsel were sound then what is going to be the fate of the money that is due from the 24th January 1947 to the 28th February 1947. That money is certainly due. In the words of Baron Martin which I have quoted such money is 'pre-existing debt.' The character of the money can only be rent because the lease does not stand avoided until the notice of forfeiture on the authorities which I have quoted. How then is this money going to be recovered and what will be the action to recover such amount if the demand for that money will mean waiver of forfeiture. The answer is irresistible and that is such argument is unsound. Demand for rent due up till the date of forfeiture cannot be considered as waiver. The fact that such demand is being made after the notice of forfeiture and therefore with the knowledge of the breach cannot amount to waiver either of the breach or of the forfeiture because if it were to be so regarded then the lessee could rely on his own wrong to avoid payment and at the same time the landlord would be powerless to forfeit the lease without losing money already accrued due as rent.

24. Having regard to my findings I answer issue No. 2 in the negative and hold that there has been no waiver of forfeiture in the manner alleged in sub-paras. (a) and (b) of Para. 5 of the written statement.

25. 'Issue No. 3': This follows as a corollary from the previous issues. I hold that the notice of determination of the lease by forfeiture is valid and sufficient in law and answer the issue in the affirmative.

26. 'Issue No. 4': Ordinarily mesne profits are granted according to the rate of rent. The rate of rent reserved under the lease in this case is Rs. 763/- per month inclusive of taxes. But the plaintiffs contend that they are entitled to mesne profit at a higher rate in this case and their claim is at the rate of Rs. 60/- per day which makes it about Rs. 1,8.00/- per month.

27. Under Order 20, Rule 12 of the Civil P. C. read with Section 2(12) of the Civil P. C. mesne profits are regarded as those profits which the person in wrongful possession of such property actually receives or might with ordinary diligence 'receive. It is the plaintiffs' contention that the profits out of this property which the defendants actually receive or might with reasonable diligence have received is Rs. 60/- per day It is settled law that that is the legal basis of mesne profits as will appear from the decision of the Privy Council in 'Gurudas v. Hemendra Kumar' 57 Cal 1. In the light of this I proceed to analyse the evidence on this point.

28. The facts on which the plaintiffs rely are that the actual rent realised by the defendants from the Poddar Automobiles even for a portion of the said premises is Rs. 2,500/- per month while the defendants themselves were paying a rent of Rs. 763/- per month to the plaintiffs. An attempt was made by the defendants to explain this high figure of Rs. 2,500/-per month by their suggestion that what was let out to the Poddar Automobiles was not only a portion of the said premises but the entire business machinery furniture and goodwill of the business of the defendants carried on as the National Motors. I have come to disbelieve this part of the evidence of the defendants completely and I have come to the conclusion that the defendants are charging Rs. 2,500/- per month from the Poddar Automobiles only for letting out a portion of the premises in suit. (After discussing the evidence on this question his Lordship held' that Rs. 1,800 per month was to be taken as a fair rental for the part of the said premises.) Applying therefore the principle of law which governs the award of mesne profits and having regard to the facts that I have found I hold that the fair and reasonable mesne profit should be Rs. 1,800/- per month or Rs. 60/- per diem and answer the issue accordingly.

29. There will therefore be judgment for the plaintiffs for possession of the premises No. 113, Park Street and for mesne profits at the rate of Rs. 60/- per diem from the 28th February 1947 until possession. There will also be a declaration in terms of prayer (1) of the plaint. The defendants will pay to the plaintiffs the costs of this suit.


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