1. This is an appeal by the plaintiff from the judgment of my learned brother Mr. Justice Greaves.
2. The learned Judge dismissed the suit.
3. The suit was to recover vacant possession of the upper flat in No. 11, Bow Street, in the town of Calcutta, for mesne profits and for costs.
4. The defence set out several allegations on which the defendant relied. The one which is material for the purposes of my judgment in effect was that the defendant was a tenant from May 1917 of the upper flat, that the standard rent had been fixed by the Controller of Bents, Calcutta, on the 30th May, 1921; that the defendant was continuing as tenant of the flat at the rent fixed by the Controller of Bents; that the defendant denied that the plaintiff required the premises for his own use and occupation as the residence of himself or his family; that he had paid rent regularly and was entitled to continue in occupation as such tenant. The standard rent referred to in the defence has been fixed at the sum of Rs. 85 per month.
5. The facts may be taken from the learned Judge's judgment as follows : 'The property belonged to Mr. Emmanuel Jacob Cohen who was still the owner of the premises : the defendant was a tenant under him paying, prior to this suit a sum of about Rs. 65 a month. Mr. Cohen negotiated with the defendant for renewal of his tenancy which had expired, at a higher rent and Mr.1 Cohen stated that the rent of the ground floor flat was Rs. 100, that the rent of the middle flat was Rs. 150, and that he was entitled to ask, as he did, Rs. 100 for the rent of the flat in suit. The defendant demurred to paying Mr. Cohen the sum which he asked although it appeared that he was willing to pay as much as Rs. 104 if a godown were included wherein he could garage his motor car. However, the negotiations broke down and Mr. Cohen leased or purported to lease this upper flat to the present plaintiff at Rs. 100 a month, and this suit was brought by the plaintiff who claimed to be the landlord within the definition in the Bent Act to recover possession of the upper flat.'
6. The learned Judge proceeded to say : 'I should say that the plaintiff at present; lives in No. 4, Harin Bari Lane, where he has premises as convenient and commodious as the flat in suit, but he states, that he is desirous to move to the premises in suit because be says he has young daughters, and that there is a brothel in the near neighbourhood of the premises No. 4, Harin Bari Lane, and that it is undesirable that his daughters should remain in close proximity to the brothel. No question arises as to payment of rent, for it is admitted that rent has been deposited at the standard rent of Rs. 85 with the Bent Controller.'
7. The learned Judge dismissed the suit holding that the lease which was executed by Mr. Cohen was really against the spirit of the Bent Act : and upon that the learned Judge based his decision.
8. There is no doubt in my mind that the execution of the lease was against the spirit of the Bent Act. But, with due respect to the learned Judge, I do not think that the conclusion, as stated by the learned Judge provides a sufficient basis, for the judgment. It must be shown that the lease defeated the intention which the Legislature expressed in the Bent Act or which is necessarily implied from the express terms of the Act.
9. The lease was executed on the 26th October, 1920, and the term was 2 years from the 29th October, 1920. It appears, therefore, that the term has expired by this time : and in any event, in my judgment, it would not be right for this Court now to make a decree for vacant possession in favour of the plaintiff. The rights of the parties, however, must be considered as they existed at the date of the suit inasmuch as, at any rate, the question of mesne profits and costs would depend upon the result of our decision in, that respect. The rights of the parties, therefore, have to be determined by this Court.
10. Several points were urged in the course of the argument by the one party and the other. In my judgment it is not necessary to deal with them all, as in my opinion the appeal may be disposed of on one ground.
11. It was said in the first place that the plaintiff was a 'landlord' as denned by Section 2, Clause (c)of the Calcutta Bent Act 1920 and reliance was placed upon the words 'any person for the time being entitled to receive rent in respect of any premises, whether on his own account, or on account or on behalf, or for the benefit of, any other person' and upon the words 'every person from time to time deriving title under a landlord.' Having regard to the facts of this case, I consider that to be an arguable point : and, I desire to make it clear that I do not decide it in this appeal. I assume, however, for the purpose of my judgment, that the plaintiff may be considered as a 'landlord' within the meaning of Section 2, Clause (c) of the Bent Act.
12. In the next place it was contended on behalf of the plaintiff that he came within the proviso to Section 11(1) and that the premises were bona fide required by the plaintiff, the landlord, for his own occupation.
13. The learned Judge on this point found that the plaintiff genuinely 'desired' in the circumstances to move from No. 4, Harin Bari Lane, and to occupy the upper flat of No. 11, Bow Street. But as I have pointed out, he came to the further conclusion that the premises in which the plaintiff was living in No. 4, Harin Bari Lane, were as convenient and as commodious as the premises which are the subject-matter of this suit.
14. In the case of Rekhab Chand Doogar v. J.R. D'Cruz A.I.R. 1923 Cal. 223, my learned brother Mr. Justice Buckland in his judgment at page 502 held as follows : 'I do not think it is enough that a plaintiff in order to defeat a plea under the Calcutta Bent Act should merely say that he desires the premises bona fide for his own occupation. The word in the Act is not 'desire' but 'require.' This, in my opinion, involves' something more than a mere wish and it involves an element of need, to some extent at least.' In my judgment, it is not necessary for this Court in this case to decide that question : and I desire to make it clear that I do not decide it. I assume, however, for the purpose of my judgment, that the plaintiff on the facts of this case may be said to have bona fide required the premises for his own occupation.
15. I am, however, in agreement with the, learned Judge's finding at page 43 of the Paper Book, which runs as follows : 'I am bound to hold that Mr. Cohen's object, in leasing the premises as he did to the plaintiff was to avoid the provisions of the Rent Act, and that inasmuch as he could not obtain possession himself of the flat, he put some other person in a position in which he thought that person would be able to get possession of the premises and pay him the higher rent which he was unable in the circumstances to extract, from the defendant.'
16. The plaintiff also, in my judgment, must have known that the result of his taking the lease from Mr. Cohen would be, to eject the defendant from the premises, if effect could be given to his lease. He must have known further that the rent, which he agreed to pay was in excess, of that which Mr. Cohen could lawfully demand from the defendant by reason, of the provisions of the Bent Act. The question is whether under these circumstances the lease granted by Mr. Cohen to, the plaintiff could be enforced.
17. The object of the Rent Act, as stated is the preamble, was to restrict temporarily the increase of rents in Calcutta. The Act provided for the fixing of a standard rent. In this case it was fixed at Rs. 85 which the defendant was all along willing, to pay and which in fact he deposited with the Controller of Bents under the Act.
18. Section 4(1) of the Act provides 'Subject, to the provisions of this Act, where the rent of any premises has been or is hereafter, during the continuance of this Act, increased so as to exceed the standard rent, the amount of such excess shall, notwithstanding any agreement to the contrary, be irrevocable.' So that, having regard to the provisions of that section, Mr. Cohen could not recover from the defendant, his tenant, a rent in excess of the standard rent, Es. 85. Nor could he obtain a decree for recovery of possession of the premises against the defendant so long as the defendant paid the rent to the full extent allowable by the Act, and performed the conditions of the tenancy : for he, Mr. Cohen, was not able to bring himself within any of the conditions contained in the proviso to Section 11(1) of the Act. Section 11(1) provides : 'Notwithstanding anything contained in the Transfer of Property Act, 1882, the Presidency Small Cause Courts Act, 1882, or in the Indian Contract Act, 1872, no order or decree for the recovery of possession of any premises shall be made so long as the tenant pays rent to the full extent allowable by this Act, and performs the conditions of the tenancy.' That section is applicable to the case of Mr. Cohen and the defendant, inasmuch as Mr. Cohen was not able to bring himself within any of the provisions of the proviso to Section 11(1).
19. I have no doubt that the object of the parties to the lease was to defeat the provisions of the Rent Act. Mr. Cohen wanted a rent higher than that which he could obtain from the defendant by reason of the Rent Act. He could not obtain possession of the premises himself. So he granted the lease to the plaintiff who, it was thought, might be able to obtain possession of the premises, inasmuch as he wanted to occupy them and who would pay Mr. Cohen the higher rent. The plaintiff was a party to this arrangement and was willing to pay a rent higher than that which could be lawfully recovered by Mr. Cohen, by reason of the Rent Act.
20. Section 10 of the Contract Act provides : 'All agreements are contracts if they are made by the free consent of the parties competent to contract for a lawful consideration, and with a lawful object, and are not hereby expressly declared to be void.'
21. Section 23 deals with the questions of consideration and object and runs as follows : The consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral or opposed to public policy.
22. 'In each of these cases, the consideration or object of agreement is said to be unlawful. Every agreement, of which the object or consideration is unlawful, is void.' In my judgment, the object of the lease was of such a nature that, if permitted, it would defeat the provisions of the Rent Act; and consequently, the object was unlawful.
23. The result is that, the object being unlawful, the lease was void.
24. In my judgment, therefore, this appeal must be dismissed with costs.
25. This appeal raises a question under the Calcutta Rent Act (Bengal Act III of 1920) which was passed, as the preamble states, with the object of restricting temporarily the increase of rents in Calcutta. The Act came into force on the 5th May, 1920, with a life limited to a period of three years from that date [(Section 1, Clause (4).]
26. The respondent, Manekji Cowasji, the defendant in the suit; was a tenant of the upper flat No. 11, Bow Street, at a rent of Rs. 85, a month, under the owner of the premises, Emanuel Jacob Cohen. The defendant tendered no evidence at the trial and I will assume in favour of Saleh Abraham, the plaintiff-appellant, that when the Rent Act came into force the defendant was holding as a monthly tenant under Cohen as landlord. The position then was that while the Act remained in force the defendant was the statutory tenant of the flat liable to pay the standard rent defined in Section 2, Clause (f). So long as he paid such rent he was protected from eviction at Cohen's hands otherwise than under the proviso to Section 11, Sub-section (1). Cohen however treated the Act with scant, respect. He tried, without reference to the standard rent, to increase the rent to Rs. 100 a month. The defendant pointed out that that was an increase of more than 50 per cent. Probably in view of proviso (1) to Section 15(3)(e) he offered to pay a 25 per cent. Increase. The offer was not accepted. On the 11th June, 1920, Cohen wrote to the defendant refusing the defendant's tender of rent at the old rate, and suggesting that the defendant should move the Bent Controller to fix the standard rent. As to that it must be observed that if Cohen was anxious to keep within the Act, he was himself free to move the Bent Controller. In August Cohen gave the defendant notice to quit by the end of September on the ground suggested by Section 11, Clause (5) that he had not paid within three months of the 5th May all arrears of rent due from him. The defendant replied that he had deposited the rent for May and June with the Controller. In October the defendant offered a rent of Rs. 104 a month for the flat and in addition a godown which he wanted for use as a motor garage. Nothing came of the offer and in this state of things, the defendant not having submitted to his terms, Cohen took the following step. By an indenture, dated the 26th October, 1910, he granted to the plaintiff a lease of the fiat for a term of two years from the 29fch October 1920, at a monthly rent of Rs. 100 for the first year and Rs. 110 for the second year. Cohen gave the defendant notice of the lease, requested him to attorn to the plaintiff as landlord till the end of October and thereafter, in pursuance of a notice to quit already served upon him, to give vacant possession to the plaintiff. The defendant replied claiming the protection of the Bent Act and refusing to vacate. Subsequently, however, as it appears, he did attorn to the plaintiff to the extent of depositing with the Controller rent at the old rate for payment to the plaintiff, and of applying to the Controller to fix the standard rent as between the plaintiff and himself. The application was made in March 1921, and by an order, dated the 30th May 1921, the Controller fixed the standard rent at Rs. 85. The Controller held, no doubt under proviso (1) to Section 15(3)(e) that the fair rent in November 1918, was Rs. 75 to which he added 10 per cent, plus Rs. 3 for the wages of a coolie to pump water.
27. The plaintiff had in vain given the defendant more than one notice to quit, before this order was made. After the order on the 31st May, the plaintiff's solicitors wrote to the defendant giving him a fresh notice to quit by the end of June 1921. It was asserted that the plaintiff required the premises for his own occupation [proviso to Sub-section (1), Section 11]. This notice was as ineffectual as the others, and in July 1921, the plaintiff filed his suit, claiming vacant possession of the flat and mesne profits at the rate of Rs. 100- per mensem from the 1st July till the flat was vacated. The suit was dismissed by Greaves, J. by a judgment, dated the 25th April, 1922, and the plaintiff filed this, appeal on the 16th May, 1922.
28. The plaintiff's lease ran out in October 1922,before the appeal came on for hearing. It is suggested but not proved that the plaintiff has obtained an extension of the lease from Cohen and it is further said that the duration of the Bent Act may be extended. But in any case a decision of the appeal on the merits is necessary with reference to the claim for mesne profits and the costs of the litigation.
29. In my opinion, the only substantial question which arises is whether or not the lease is void on the ground of illegality. This is the first of the issues framed at the trial. 'Is the lease void'? As to the other questions which have been discussed, no final opinion need be expressed.
30. In the first place on the question whether the plaintiff was the defendant's landlord within the meaning of the Bent Act, the argument on his behalf proceeded as follows : On the facts and in view of the terms of the lease, a formal instrument in writing, it was argued that Cohen intended that the lease should operate as an assignment - though a temporary assignment - of the reversion on the termination of the defendant's monthly tenancy. In India, it was said, such an assignment would be good and valid under the general provisions contained in Sections 6, 7 and 8 of the Transfer of Property Act and the particular provisions of Section 109. Under those provisions the assignment would entitle the assignee or transferee during the continuance of his interest to the rent payable by the previous lessee. It was unnecessary to consider the doctrine of English Law on the subject of concurrent leases or the bearing on that doctrine of the Statute of Anne which is referred to in Platt on Leases (Vol. II, p. 57) and in such cases as Wordsley Brewery Co. v. Halford (1903) 90 L.T. 89, and Horn v. Beard (1912) 3 K.B. 181. It was the more unnecessary to discuss such topics because in the present case, there was, apart from the Transfer of Property Act, a sufficient attornment by the defendant to make him the plaintiff's tenant. Therefore, the plaintiff became entitled either under the Transfer of Property Act, or by reason of the defendant attorning, to receive the rent payable by him, and if so, the plaintiff became the defendant's landlord both under the ordinary law and as the term is defined in Section 2, Clause (c) of the Rent Act. It followed that the plaintiff became entitled to exercise the rights of a landlord under the Bent Act, including the right to evict the tenant on any ground sanctioned by Section 11. If Cohen had transferred the premises absolutely to the plaintiff no one would have doubted that he had this right, and the fact that the transfer was a partial transfer was immaterial.
31. If it were necessary to decide the question, I should be disposed to accept this argument. The Act interferes with some of the rights of landlords, but it does not expressly restrict their right to transfer their property, wholly or partially, and it cannot be extended on considerations of mere policy. I do not mean that the object and scope of the Act may not be taken into account in construing any of its provisions, which is capable of more than one construction. But the Act was passed to meet an emergency, and in hasty and improvised legislation of this kind there may be loopholes and there may be omitted cases. It is not the duty of the Courts to add to, or subtract from, the fair sense of the language of the Act When a landlord transfers his rights wholly or partially, the Act must be applied as it stands to the new rights and the new relations thus created.
32. There is next the suggestion that the plaintiff did not bona fide require the flat for hi9 own occupation within meaning of Section 11 of the Act. It is true that at all material times the plaintiff was and he still is in occupation of premises in Harinbari Lane which admittedly are as convenient and commodious for himself and his family as the flat in suit. But, he says, near those premises is a brothel and it is not desirable for his daughters, one of whom, we are told, is of marriageable age, to live close to a brothel. The learned Judge held on the evidence that the plaintiff genuinely desired to move from Harinbari Lane to the flat. We were referred to the observation of Buckland, J. in Rekhabchand Doogar v. D'Cruz A.I.R. 1923 Cal. 223. In that case also a landlord already in occupation of a house purported to require the house of a tenant. The learned Judge said : 'The word in the Act is not 'desire' but 'require.' This, in my opinion, involves something more than a mere wish and it involves an element of need, to some extent at least.' I agree that a landlord is not acting bona fide under the Act, unless he reasonably requires the house for his own occupation. Much, therefore, must depend on the facts of the particular case. The present case differs from the case which came before the learned Judge, and if the plaintiff here were in a position to require the flat, I should be disposed to hold that he reasonably or bona fide required it for his own occupation.
33. It is, however, unnecessary to decide either of these questions, the defendant being, in my opinion, entitled to succeed on the issue as to the legality of the transaction on which the plaintiff founds.
34. Under Clause (h) ot Section 6 of the Transfer of Property Act no transfer can be made...for an unlawful object or consideration within the meaning o Section 23 of the Contract Act, 1872. By Section 23 of the Contract Act, the consideration or object of an agreement is said to be unlawful, among other cases, when 'it is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law,' and 'every agreement of which the object or consideration is unlawful, is void.'
35. Cohen's immediate object was clearly to secure a higher rent than the Act allowed. That this object was illegal is, I think, shown not only by the preamble or by Section 4 which makes any excess above the standard rent irrecoverable, but also by Section 19 which makes it an offence on the part of a landlord if he 'knowingly receive whether directly or indirectly, on account of the rent of any premises any sum in excess of the standard rent.' There can, I think, be little doubt that the plaintiff was a party to or connived at this illegality. He was apparently aware that the defendant was in possession of time flat as Cohen's tenant, because his first notice to quit was given on the 30th October, 1920. He accepted the lease, nevertheless, without stopping to enquire whether the rent which he agreed to pay was or was not in excess of the standard rent.
36. In any case the transfer is unlawful, because the consideration which Cohen demanded and accepted and which the plaintiff agreed to give for the grant of the lease was a rent in excess of that allowed 'by the Rent Act. If it be said that the consideration was not unlawful at the date of the lease, because the Controller had not then determined the standard rent, both Cohen and the plaintiff took the risk of the rent turning out to more than the standard rent. The lease, if not unlawful in its inception, became unlawful and void, when the Controller fixed the standard rent at Rs. 85 a month. Then if not before, it became unlawful for Cohen to receive or the plaintiff to pay the rent reserved. The agreement was inconsistent with the express policy of the Act and tended to defeat its provisions, which disable a landlord from recovering more than the standard rent. The plaintiff, therefore acquired no rights there under which he could enforce against the defendant.
37. The defendant, it is true, was quite willing to pay the standard rent either to Cohen or the plaintiff. He merely treated the plaintiff as standing in Cohen's shoes - his attornment does not validate the lease and it is in virtue of the lease that plaintiff seeks to evict him.
38. It was said that even under the lease Cohen could not lawfully recover from the plaintiff more than the standard rent, but the remark does not meet the objection that either the object or the consideration of the agreement or both were unlawful. In the language of the Contract Act, if the agreement were permitted, it would defeat the provisions of the Rent Act.
39. I agree with my Lord that the appeal should ba dismissed.