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Gobinda Lal Shaw and anr. Vs. Tarak Nath Paul and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtKolkata High Court
Decided On
Case NumberAppeal from the Original Decree No. 173 of 1974
Judge
Reported inAIR1977Cal178
ActsTransfer of Property Act, 1882 - Section 114
AppellantGobinda Lal Shaw and anr.
RespondentTarak Nath Paul and ors.
Appellant AdvocateS.C. Das Gupta and ;Anath Nath Mondal, Advs.
Respondent AdvocateP.K. Das and ;Bidyut Banerjee, Advs.
DispositionAppeal allowed
Cases Referred(Habib Ahmed v. Keoti Kuer
Excerpt:
- .....lessee has the right to sub-let any portion of the demised premises and on the basis thereof the lessees defendants nos. 1 to 8 had sublet the portion of the demised premises to defendants nos. 9 and 10. it may be stated herein that the right to sub-let is to be found in the proviso to the clause which gave the right of reentry to the lessor of the premises in case the lessee fails to pay, during the continuance of the lease, the rent reservedby the indenture for three consecutive months. it is contended by mr. das gupta that the lessee has let out to the appellant a portion of the premises under the lessee's right to sub-let any portion and it is open to the defendants nos. 9 and 10 to pay the same or tender the same in terms of section 114 of the transfer of property act and thereby.....
Judgment:

Banerjee, J.

1. This appeal is at the instance of the defendants Nos. 9 and 10 arising out of a suit for eviction of the lessee and sub-lessee in respect of a portion of the suit premises being No. 122, Surendra Nath Banerjee Road, Calcutta, P. S. Taltolla, Calcutta, which was leased out for a term of 21 years commencing from 1st day of February, 1957 to last day of January, 1978 at a monthly rental of Rs. 80/- payable by the 15th day of the following month for which the rent became due. The plaintiff became the owner of the premises by purchase on 7th March, 1962 and the lessee tenant Probodh Chandra Dey on receiving letter of attornment paid rent to the plaintiff as per terms of lease of 21 years commencing from 1st day of February, 1957 to last day of January, 1978. Probodh Chandra Dey died intestate in or about the month of June 1969 leaving the defendants Nos. 1 to 8 as his heirs and legal representatives and they became the tenants under the plaintiff on the terms of the lease and paid rent to the plaintiff at the rate of Rs. 80/- per month till the month of February, 1970. The said defendants failed and neglected to pay rent to the plaintiff in respect of the said premises from the month of March 1970 and thereafter the plaintiff determined the lease by way of forfeiture in view of the clause in the Deed of Lease that if the rent hereby reserved or any part thereof shall remain unpaid for three consecutive months it will be lawful for the lessor to enter in the premises on determination of the lease. The plaintiff filed the suit for eviction therefrom. In the suit they made defendants Nos. 9 and 10 who are under-lessees of the other defendants whose lease has been forfeited, parties and the defendants Nos. 9 and 10 are in the occupation of a part of the premises and rent payable by them are mentioned in Schedules 'B' and 'C'.

2. The defendants Nos. 1 to 8 did not contest the suit. Defendants Nos. 9 and 10 however filed the written statements, inter alia, stating that they are under-lessees of the other defendants and they ere not bound to vacate the portion of tine premises occupied by them. Defendants Nos. 9 and 10 stated that they were inducted as tenants in respect of a room only on the 3rd floor at premises No. 122, S. N. Banerjee Road, Calcutta, ata monthly rental of Rs. 55/- payable according to English Calendar month. It is further stated that on 28th February, 1970 at the time of the commencing of the tenancy, he paid a sum of Rs. 500/- in advance to the defendant No. 1 against a receipt with a term that a sum of Rupees 27-50 out of the said sum of Rs. 500/-shall be adjusted towards the rents from the month of February, 1970 and onwards. Similarly, the defendant No. 10 also paid a similar amount on the same date with a similar stipulation that a sum of Rs. 20/-shall be adjusted towards his monthly rents from the month of February, 1970 and onwards. According to the said arrangement and mode of payment of the monthly rent of the respective tenancy of the defendants Nos. 9 and 10, they went on paying and there is no arrear and if any arrear is found these defendants are ready to pay the same (Vide -- Paragraph 14 of the written statements). The tenancy of these defendants is well protected under the provisions of law and even in case a decree for eviction is passed against defendants Nos. 1 to 8 the said decree is not binding and enforceable against these defendants and as such they prayed for a dismissal of the suit. On these pleadings, number of issues were framed and for the purpose of consideration of the argument at the Bar, Issue No. 4 is relevant. Issue No. 4 is as follows :-- 'Are the defendants Nos. 9 and 10 under-lessees under defendants Nos. 1 to 8 If so, has the lease been forfeited' The learned Judge, City Civil Court having held against the defendants Nos. 9 and 10, appellants herein, they preferred the present appeal.

3. Mr. Das Gupta on behalf of the appellants contended, inter alia, that under Section 114 of the Transfer of Property Act, the defendants are entitled to protection and the appellants are agreeable to pay any amount which may be found due by the plaintiff to the defendant No. 1. It is argued by Mr. Das Gupta that under the registered indenture of lease dated 29th January, 1957 the lessee has the right to sub-let any portion of the demised premises and on the basis thereof the lessees defendants Nos. 1 to 8 had sublet the portion of the demised premises to defendants Nos. 9 and 10. It may be stated herein that the right to sub-let is to be found in the proviso to the clause which gave the right of reentry to the lessor of the premises in case the lessee fails to pay, during the continuance of the lease, the rent reservedby the indenture for three consecutive months. It is contended by Mr. Das Gupta that the lessee has let out to the appellant a portion of the premises under the lessee's right to sub-let any portion and it is open to the defendants Nos. 9 and 10 to pay the same or tender the same in terms of Section 114 of the Transfer of Property Act and thereby avoid the forfeiture in so far as the portions of the premises let out by the lessee are concerned,

4. Mr. Das on behalf of the respondent however contended, inter alia, that the case is covered by Section 115 and as soon as the right of lessee goes, all the subsequent rights created under the lease comes to an end with the determination of the original lease. The lessee cannot give more right to his subtenant. Mr. Das next contended that in the facts of the present case, Section 114 has no application as the essential conditions were not fulfilled. The provision, according to Mr. Das, under Section 114 is discretionary as they did not ask for relief against forfeiture before the trial Court, the appellant's contention cannot be upheld. In order to get relief under Section 114 under-lessee must pay or tender all the rents with interest and costs as stated in Section 114 of the Transfer of Property Act. In the present case this was not done. In that view of the matter, it is argued by Mr. Das that the under-lessee, appellant herein, has no right to avoid the forfeiture.

5. The point for consideration is whether in the facts and circumstances of the case, the appellant has a right to avoid the forfeiture of the lease on the ground of admitted non-payment of three consecutive months' rent by the lessee.

6. Mr. Das Gupta contended that the lessee has the right under the terms of the lease to sub-let a part of the premises and in fact it was sub-let by the lessee. If the lessee has made a default in payment of rent, the sub-lessee is within his right to offer the rent in default and get the relief against forfeiture under Section 114 of Transfer of Property Act.

7. Mr. Das however contended that, that is not so. If the lease is determined, the sub-lessee cannot have any right to continue. Mr. Das further contended that under Section 114 of the Transfer of property Act the first condition is that the lessee must pay or tender the rent together with interest and costs which according to Mr, Das, the lesseedid not tender at all. Mr. Das is not correct in his contention. From the judgment appealed against it is found that the appellant all along argued that under Section 114 of the Transfer of Property Act they are entitled to protection. Unless the Court finds that the lessee is in arrears for payment of rent or there is dispute about the arrears of rent, the Court comes to a proper finding, the question of tendering or paying does not arise in case the under-lessee who is in possession in terms of the indenture of lease can seek protection against the forfeiture under Section 114 of the T. P. Act, In view of the said offer to pay it cannot be said that at the time the defendant failed to make the offer to tender the payment. On the other hand in the judgment appealed against the plea of forfeiture was the only plea which was taken by the appellants and defendants Nos. 1 to 8 did not contest the suit and defendants Nos. 9 and 10 alone contested. The learned Judge was pleased to hold that under the law if there is a lessee and he has created an under-lease or any other legal interest then after the lease is forfeited, the under-lessee, or the person who claims under the lessee, loses his estate as well as the lessee himself. This plea however will not be available to the lessor if under the lease the lessee had the right to transfer or sublet a part or whole of the tenancy and as such if a lessee has transferred his interest in the lease it is binding on the same terms and condition on the lessee for the period of 21 years.

8. Mr. Das further contended that the case reported in (1914) 12 All LJ 1085 = 25 Ind Cas 186 = (AIR 1914 All 411), (Ahmad Hussain v. Riaz Ahmad) is not correctly decided. In our opinion, Mr. Das is not correct in his submission. We respectfully follow the reasons of the Hon'ble single Judge of the Allahabad High Court which held in 25 IC 186 = (AIR 1914 All 411), (Ahmad Hussain v. Riaz Ahmad) as follows :--

'Under the English Law, an under-lessee is entitled to claim relief from forfeiture, on the same way as the tenant (see page 545 of the same work) under the Common Law Procedure, 1852 (15 and 16 Vic., Section 76). There is no similar statutory enactment in India. Relief against forfeiture for non-payment of rent used to be granted in India long before the enactment of the Transfer of Property Act. It is still granted on equitable grounds in the case of agriculturalleases to which the provision of the Transfer of Property Act do not apply. I have not been able to lay my finger on any case decided in India in which an under-lessee has been given the privilege that Section 114 of Transfer of Property Act confers upon the lessee, nor am I aware of any decided case to the contrary. In England a liberal interpretation has been placed upon the term 'tenant' as used in Section 4, George II, C. 28, which has been held to include an under-lessee (Moore v. Smee), ((1907) 2 KB 8). In my opinion where a lessee is permitted by law to transfer mortgage, or sublease his rights, as in this case, the transferee of the rights must be deemed to stand in the shoes of the transferor for the purpose of making payment of the rent in arrears and costs of the suit under Section 114 of the Act. I am inclined to think that he is as much entitled to be relieved of the forfeiture as the original tenant. This is more especially so where the original tenant has transferred his entire rights to the defendant. The heirs of the original lessee are certainly entitled to pray for the relief which the lessee is entitled to and ask for relief against forfeiture under Section 114, Act IV of 1882. I see no reason for holding that the assignee of the rights of the tenant should be in a worse position. I dismiss the appeal but without costs, as the respondents have not appeared'. In our opinion, in view of the provision of the lease itself giving right to the lessee to sub-let, the sub-lessee has right to avoid the forfeiture by payment of rent within the terms of Section 114 of the Transfer of Property Act.

9. Next contention of Mr. Das is that in the appellate stage, the appellant cannot apply for avoiding the forfeiture by making a payment. This contention, however, is not tenable in view of the Supreme Court Judgment reported in AIR 1869 SC 1348, (Praduman Kurnar v. Virendra Goyal). In paragraph 7 of the said judgment it has been stated that 'in terms Section 114 makes payment of rent at the hearing of the suit in ejectment a condition of the exercise of the Courts' jurisdiction but an appeal being a rehearing of the suit in appropriate cases it is open to the appellate Court at the hearing of the appeal to relieve the tenant in default against forfeiture. Passing of a decree in ejectment against the tenant by the Court of First Instance does not take away the jurisdiction of the appellate Court to grant equitable relief'. Mr. Das Gupta's contention is that the appellate Court has power to grant equitable relief in appropriate cases even in the appellate stage. Mr. Das however referred to a case reported in (1904) 31 Cal. 1057 as also I. L. R. (1970) 1 Cal. 117 which is equally distinguishable in the facts of the present case. It appears to us that Mr. Das is not right in his contention that the defendants Nos. 9 and 10 did not apply for relief under Section 114 of the Act. Mr. Das's contention is that ever, if the appellate Court has the power to grant a relief under Section 114, this power should not be exercised unless the tenant has prayed for such relief at the earliest stage of the suit. Once a decree is passed without any prayer for relief, no such relief can be granted by the Appellate Court, Mr. Das contended that the power of the appellate Court to grant relief is to be exercised if such relief is prayed for in the trial Court. Moreover this is the question of direction of the Court and in the facts of the present case Mr. Das contended that the discretion should not be exercised in favour of the appellant. In our opinion, the discretion should be exercised in favour of the sub-lessee in the facts and circumstances of the present case. In the present case it must be, held that the lessor was granted a lease for 21 years. In the said lease there is a provision of re-entry for non-payment of rent for 3 consecutive months. The head-lessee has a power to sublet. Therefore for the purpose of the lease, the sublessee has same powers during the con-tinuance of the lease as head-lessee had Admittedly in this case the head-lessee has a power to avoid forfeiture on the ground of non-payment of rent under Section 114 of the Act and unless he is disentitled on the exercise of discretion in his favour. Even at the stage of the trial the defendants Nos. 9 and 10 wanted to pay as will appear from the judgment itself but they contended that they never knew that the head-lessee made a default and they paid all rents to their head-lessee. In the facts and circum-stances of the present case, we are not inclined to accept Mr. Das's contention that the discretion should not be exercised in favour of the sub-lessee. Therefore the sub-lessee has power to avoid the forfeiture by making payment under Section 114 of the Transfer of Property Act. Mr. Das however referred to the case reported in : AIR1953Bom129 , (Bhagwant v. Ramchandra), AIR 1946 All 328, : [1953]4SCR1009 and : [1969]3SCR950 ,(Praduman Kumar v. Virendra Goyal). In our opinion, however, in the facts of the present case, the defendants Nos. 9 and. 10 are entitled to relief. In : AIR1953Bom129 , (Bhagwant v. Ramchandra) what the Bombay High Court held is clearly distinguishable in the facts of the present case. It has been held by the Bombay High Court in paragraph 11 as follows :--

'The word 'forfeiture' used in Section 114 has a technical meaning which must be ascertained by reference to Section 111(g) of the said Act. Forfeiture in this technical sense is incurred in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter, and even in such a case the lessor has to give notice in writing to the lessee of his intention to determine the lease. The lease between the parlies in the present case is not on the record and it is impossible to say that the requirements of Section 111(g) of the Transfer of Property Act have been satisfied. No plea under Section 114 was made in the Courts below and it is obviously difficult to entertain this plea for the first time in second appeal. The plea clearly raises a mixed question of fact and law which we cannot decide in the absence of adequate material on the record'.

In the said case it will appear that no plea of Section 114 was taken in the Court below and the matter was dealt with in the second appeal and moreover the lease between the parties was not in the record. In the present case however the lease is exhibited and sub-lessee is a party in the proceeding and the lease provides that the lessee shall be entitled to sub-let any portion of the demised premises. In AIR 1946 All 328, (Habib Ahmad v. Keoti Kuer) it has been held that the payment or tender cannot be made in the appellate Court under Section 114 of the Transfer of Property Act and in view of the judgment of the Supreme Court reported in : [1969]3SCR950 , (Praduman Kumar v. Virendra Goyal) we do not think that the Allahabad High Court's decision reported in AIR 1946 All 328, (Habib Ahmed v. Keoti Kuer) can be stated to be correctly decided.

10. The appeal is therefore allowed. The judgment and decree passed by the Court below is set aside.

11. We direct that the appellants (defendants Nos. 9 and 10) will remain inoccupation of the premises till the expiry of the terms of the lease on payment of stipulated rent.

12. It is further directed that the plaintiff will be entitled to all the arrears of rents from the defendants Nos. 9 and 10 including the rents for the premises in occupation by the defendants from the date of the suit up-to-date and he will be entitled to withdraw the money already deposited during the pendency of the suit and appropriate the same towards his dues. The plaintiff will also be entitled to the interest as provided in Section 114 of the Transfer of Property Act.

13. There will be no order as to cost in this appeal.

14. In view of disposal of the appeal no order is passed on the application.

K.K. Sharma, J.

15. I agree.


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