1. The plaintiffs, who carry on business under the name and style of J.B. Arnold & Co., instituted this suit on the 3rd August last for a declaration that the defendant is not entitled to continue in possession of the eastern portion of the top flat of No. 1, Mission Row, and for a decree for vacant possession of the premises. They also claim a sum of Rs. 958-1-0 for arrears of rent from the 5th May 1920 to 8th July 1920, and Rs. 96-8-0 for the occupier's share of taxes and Rs. 480 for use and occupation from the 8th July 1920 to the date of the institution of the suit at the rate of Rs. 450, per month.
2. The plaintiffs in paragraph 2 of their plaint plead that, in or about the month of February 1920, it was agreed between them and one A.R. Mellis, acting on behalf of and as the agent of the defendant, that the plaintiffs should sub-let to the defendants the eastern portion of the top flat north of No. 1, Mission Row, (which the plaintiffs held under a five years' lease from the 7th January 1920), from the 15th March 1920 for the remaining terms of their lease at a monthly rental of Rs. 450, plus two-thirds share of the occupier's taxes to be paid in advance on the 1st of each month and that it was also agreed that the defendant, as conditions precedent to the granting of the lease, would make a deposit with the plaintiffs in cash of an amount equivalent to three months' rent and also furnish a satisfactory Bank reference.
3. They plead in paragraph 3 that these terms were confirmed by the defendant on his arrival in Calcutta and that a draft lease was drawn up, approved and engrossed and was ready for execution by the 8th June 1920. They state in paragraph 5 that on the 17th June 1920 the defendant-sent a cheque for Rs. 735 for rent from the 15th March 1920 to the 5th May at Rs. 450 per month and contended that the rent agreed upon was not a fair charge under the Calcutta Rent Act which came into force on the 5th May 1920 and intimated his desire to have the fair rent assessed by the Rent Controller, and (p. 6) that he on the 30th June 1920 intimated through his Attorneys that the three mouths' rent would be paid and Banker's reference furnished at the time the plaintiffs executed and registered the lease, that (p. 7) on the 6th July 1920 they gave notice cancelling the tenancy. The defendant by this written statement admitted paragraphs 1, 2 and 3 of the plaint except that he did not admit that the making of the deposit or the furnishing of the Bank reference were conditions precedent to the granting of the lease or that it was ready for execution on the 8th June 1920, and he states that the necessary Bank reference was furnished by the Mercantile Bank and that three months' rent in advance were deposited with the Rent Controller. In paragraph 7 he states, as the fact is, that the Rent Controller fixed the standard rent of the premises at Rs. 200 a month. His certificate is dated the 15th December 1920, but I understand that the standard rent was fixed some time in September. By the draft lease (Exhibit D) the plaintiff demised to the defendant the premises for a term of four years and nine months and three weeks from the 15th March 1926 at Rs. 450 a month plus two-thirds of the occupier's share of taxes payable by equal monthly payments in advance on the first day of each month and the defendant covenanted (1) to pay unto the lessors deposit of three months' rent to be permanently held by the lessors and adjusted against the last three months' rent in case of the term being determined in the normal way or to be refunded in case of earlier determination; (2) to pay the monthly rent reserved on the day and in manner aforesaid without any deductions or abatement and to pay rates and taxes.
4. The lease contained (Clause 12) a proviso for re-entry if at any time any one or more of the monthly rents should remain unpaid for 15 days after the dates whereon they were made payable whether legally demanded or not or in case of any breach of any of the covenants or conditions by the lessee.
5. The issues are as follows:
(i) Was the defendant's tenancy validly determined?
(ii) Were the three months' deposit or Bank Reference conditions precedent to the defendant's tenancy?
(iii) What is the rent payable by the defendant?
(iv) Did the defendant commit a breach of any covenant which entitled the plaintiff to possession?
(v) To what relief, if any, is the plaintiff entitled?
(vi) Is the defendant entitled to the benefit of the Rent Act?
(vii) Was there a satisfactory Banker's reference?
6. The defendant on the 17th Jane 1020 paid rent at the rate of Rs. 450 a month from the 15th March to the 5th May and this was accepted by the plaintiff on the 19th June (see letter of that date in Exhibit A) in part payment of the rent accrued due and without prejudice to the contentions raised in the letter and their right to cancel the lease on failure to comply with the requisitions contained in the letter. The defendant made the following deposits with the Rent Controller:
On the 7th July a sum of Rs. 770 being rent for May, June and July with advance rent for three months more. This was calculated as two-thirds of the old rent for the flat plus 10 per dent. The Controller gave the plaintiffs notice of the deposit on the 14th August 1920.
7. On the 11th August 1920 Rs. 128-8-0 rent for July (I think this must be the rent for August as the July rent is included in the Rs. 770 paid in July), on the 15th September Rs. 128-8-0 rent for September, on the 15th October Rs. 555-12-0 rent from 6th May to 31st August to make up the difference between the rent paid and the standard rent fixed by the Controller and also the sum due for taxes on the 17th November 1920, Rs. 200 rent for October, on the 27th January 1921 Rs. 637-8-0 rent for the months of November and December with occupier's share of taxes. On the 10th February, Rs. 225 rent for January and on the 15th March Rs. 200, rent for February 1921. On the 21st June 1920 the plaintiff received the following letter from the Mercantile Bank:
With reference to your letter of the 16th instant the firm enquired about keeps a small account with us, otherwise we have no knowledge as to their means.
8. It is admitted that the terms of the draft lease were finally agreed upon on the 8th June 1920. Counsel for the plaintiffs referred me to various letters prior to this date which passed between the plaintiff and Mr. Mellis, but Counsel for the defendant urged that I could not look at these, as the terms were finally embodied in the draft lease which represents the contract between the parties and think that this contention is correct and that I have to determine the rights of the parties on this basis.
9. The plaintiff called no oral evidence. The defendant stated that he arrived in India in the first week of May 1930, that he expected to arrive in March but could not get a ship, that Mr. Mellis, was a friend of his whom he asked to look out for offices and that he did not confirm Mr. Mellis arrangements in all details but that he did so substantially, that Mr. Mellis entered into the arrangements on his own authority and that he confirmed them and that he entered into occupation of the premises in the first Week in May, that rent was to run from March 15th and that he undertook this liability and first came to know on his arrival in Calcutta that any payment was to be made. He stated that on his arrival he had no Bankers in India and that he started an account, at the Mercantile Bank a month after his arrival. He stated that he paid Rs. 120 plus 10 per cent, on the statement that the rent in October 1919 of the whole flat was Rs. 175 and that his accommodation was two-thirds of the office. In cross-examination he stated that Mr. Mellis had no authority to take the office or make any terms. He stated that he saw the correspondence which passed between the plaintiff and Mr. Mellis and that he understood that the plaintiffs could get no reduction from the Rent Controller and that he, told the plaintiffs on arrival that he would not stand by the arrangement and that he would pay the standard rent. He stated that he accepted the terms of the agreement engrossed by his, Solicitors.
10. I think, upon the facts before me, that a valid agreement for a tenancy upon the terms of the draft lease was arrived at between the parties on the 8th June 1920 and that, as from that date, the parties were bound by the terms of the draft lease and that their rights and obligations fare determined by the terms thereof and, this being so, I answer the second issue in the negative, holding that payment of three months' rent and the furnishing of a satisfactory Banker's reference were not conditions precedent to the tenancy, and, if they were, the plaintiff cannot, I think, now claim that these were conditions precedent after letting the defendant into possession before the performance of the conditions. With regard to the third tissue, I hold that the rent payable by the defendant is the Rs. 200 a month fixed by the Rent Controller and that, with regard to the sixth issue, the defendant is entitled to the benefit of the Rent Act. With regard to the seventh issue, I do not think that the Banker's reference was satisfactory for the purpose for which it was required but, under the terms tot the tenancy, the defendant was under no obligation to furnish one, and any failure in furnishing a satisfactory preference is not a ground of forfeiture under the lease (Clause 1), the defendant was bound to pay a deposit of three months' rent and his failure to do so would work a forfeiture under Clause 12, but as no time was fixed by Clause 1, the time must be reasonable, and I am not prepared to hold that failure to pay the deposit before the 7th July was, under the circumstances, unreasonable. On that date it was paid to the Rent Controller and not to the plaintiff in accordance with the terms of Clause 1, but as the plaintiff was claiming rent in advance at the full rate, namely, Rs. 450 (see Morgan & Co.'s letter of the 5th July) and presumably had refused or would have refused the lesser sum (at least, they shave not established before me their willingness to accept this sum), I am not prepared to say that under this head there has been a forfeiture. There remains the question of the rent from May 5th and that for June, which, under the terms of the draft lease, were payable on the 1st of each of those months and which I think became immediately payable on the 8th June when the terms of the tenancy was finally settled and the relation of landlord and tenant was created.
11. It is true the draft lease was Act then signed and has not yet been signed but the defendant I was in possession under the terms of the draft lease and I think there is no doubt that the plaintiff could have obtained specific performance.
12. Under these circumstances, on the 8th June 1920, the rent, from May 5th for the month of May and the rent for June became rent in arrear and I am inclined to think that the defendant had three months within which to pay these sums under Section 11(5) of the Calcutta Rent Act, unless the words 'arrear of rent due by him in respect of the said premises' refer only to rent in arrear on the 5th May 1920 when the Rent Act came into operation. In any case, the words of the sub-section will, I think, cover the lent for May which fell to be paid on May 1st, but if I am wrong in the meaning which I have given to 'arrears of, rent' in Sub-section (5) of Section 11 and that section has no application and there has been a forfeiture, I think that, under the circumstances of this, case, I should relieve the defendant against the forfeiture, if any, under the provisions of Section 114 of the Transfer of Property Act. It is said on behalf of the plaintiff that Section 114 of the Transfer of Property Act has no application, having regard to the special provisions of the Rent Act (Section 11) and having regard to the fact that the rent payable is not that reserved by the draft lease but the standard rent. But the Rent Act does not expressly exclude Section 114 of the Transfer of Property Act, nor do I think that that Act, which is an Act of the Bengal Government, could abrogate the provisions of Section 114 of the Transfer of Property Act and, inasmuch as the rent reserved by the lease over and above the standard rent is irrecoverable under the Rent Act, I am not impressed by the argument addressed to me based on this. I understand that all rent to date has been deposited with the Rent Controller, and, if this is 90, there is no rent to pay or tender, but I have no receipt before me for the rent due on the 1st March and the 1st April for these months, and if this his not been paid it must be paid or tendered to-day and future rent will be payable on the 1st of each month for the month then current at Rs. 200 per month. Under the circumstances, I make no order as to costs. I answer Issues Nos. 1 and 4 in the negative and my finding on Issue No. 5 sufficiently appears in the judgment.