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Thackers Press and Directories Ltd. and anr. Vs. Gopinath Auddy - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Case NumberSuit No. 2105 of 1955
Reported inAIR1962Cal591,66CWN449
ActsTransfer of Property Act, 1882 - Section 114
AppellantThackers Press and Directories Ltd. and anr.
RespondentGopinath Auddy
Appellant AdvocateAdv. General
Respondent AdvocateP. Sen, Adv.
DispositionPetition dismissed
Cases ReferredHyman v. Rose
- .....premises and for other reliefs. on the 14th march, 1958 suit no. 1734 of 1957 was settled and a consent decree was passed. on the 21st march, 1958 a decree was passed in this suit by consent. a copy of this decree is annexed to the petition and marked with the letter 'n'. under the said consent decree, it was agreed that the plaintiff was pressing his claims only in regard to arrears of rent in respect of the premises in suit, and not in regard to subletting and other grounds as mentioned in the plaint, and that if the company paid to auddy a sum of rs. 40,947/- within 15 days from the date of the passing of the decree, it shall be entitled to hold the property as if no forfeiture of the lease had occurred. in default of such payment within the time aforesaid, there would be a decree.....

D.N. Sinha, J.

1. The petitioner in this application is Messrs. Thackers Press and Directories Ltd., a company incorporated under the Indian Companies Act (hereinafter referred to as 'the company'). Various reliefs have been asked for in this petition, but the relief that has been pressed before me, is relief against forfeiture. It would be necessary to state certain facts in order to comprehend how this question arises. The plaintiff Gopi Nath Auddy is the owner of premises, previously known as 6 and 7 Bentinck Street, Calcutta, now known as 6B, Bentinck Street. By an Indenture of Lease dated 21st March 1934 the predecessor-in-interest of Gopi Nath Auddy leased out the said premises to the company, at a monthly rent of Rs. 850/-. There is the usual forfeiture clause. A copy of the lease is annexed to the petition and marked with the letter 'A'. The lease was for a term of 25 years commencing from the 1st March, 1934 with option for renewal, it was provided in the lease that if the rent payable or any part thereof remained unpaid for a period of 21 days after becoming payable, it would be lawful for the lessor to re-enter the demised premises and thereupon the tenancy would stand determined. The company defaulted in the payment of rent. On the 12th July, 1955 Gopi Nath Auddy caused a notice to be served on the company for forfeiture of the lease on the ground of default in payment of rent and other grounds. On the 26th July, 1955 Auddy instituted a suit in this court against the company, being Suit No. 2105 of 1955 for ejectment, arrears of rent and other reliefs. It appears that the company had been taking loans from the second defendant, the Metropolitan Bank Ltd., (hereinafter referred to as the 'Bank') and had entered into various agreements at different times, inter alia allowing the Bank to sublet a portion of the said premises, to realise an appropriate rent etc. On or about the 31st July, 1957 the Bank made an application to be added as a party to this suit and on the 12th August, 1957 was added as a defendant therein. On the 12th September, 1957 the Bank instituted a suit against the company, being Suit No. 1734 of 1957 in this Court, inter alia, for recovery of Rs. 6,31,112.11 np., for possession of the said premises and for other reliefs. On the 14th March, 1958 Suit No. 1734 of 1957 was settled and a consent decree was passed. On the 21st March, 1958 a decree was passed in this suit by consent. A copy of this decree is annexed to the petition and marked with the letter 'N'. Under the said consent decree, it was agreed that the plaintiff was pressing his claims only in regard to arrears of rent in respect of the premises in suit, and not in regard to subletting and other grounds as mentioned in the plaint, and that if the company paid to Auddy a sum of Rs. 40,947/- within 15 days from the date of the passing of the decree, it shall be entitled to hold the property as if no forfeiture of the lease had occurred. In default of such payment within the time aforesaid, there would be a decree for possession. There are other provisions in the decree, but it is not necessary to refer to them. The .company did not make the payment but appealed against the said decree, being Appeal No. 164 of 1958. On the 22nd July, 1958 Auddy obtained an order for possession in execution of the consent decree dated 12th July, 1958. An order was made for possession through the sheriff of Calcutta with police help. An application was made by the company for setting aside the said order. On the 19th February, 1959 this application was rejected. The company thereupon preferred an appeal from the said order, being Appeal No. 40 of 1959. So far as Appeal No. 164 of 1958 is concerned, the objection was naturally taken that no appeal lay against a decree based on the consent of parties. It appears that in the original decree the word 'consent' was not mentioned by Datta, J. The Court of Appeal therefore remanded the case back to the learned Judge with liberty to the parties to make an appropriate application for correction of the minutes or such other appropriate steps as may be necessary in order to find out whether the decree was by consent or not. This order was again by consent of parties and it was agreed that the decision of Datta, J. on the point as to whether the decree was by consent or not would be final and binding. It was further provided that if the learned Judge so required, he might take evidence upon this question. Thereupon, the necessary application was made before Datta, J. and the learned Judge tried the matter on evidence for several days. On the 27th January, 1961 the learned Judge held that the decree was a consent decree and passed by consent of parties. Thereafter, the matter was considered by the Court of Appeal in Appeal No. 164 of 1953 and on the 22nd March, 1961 the appeal was dismissed. Simultaneously with this proceeding, proceedings were carried on between the company and the Bank, which had not been able to realise its dues from the company. Meanwhile, on the 11th June, 1958 an indenture of lease was entered into between Auddy and the Bank, in respect of the said premises, subject of course, to the condition that if Auddy failed to get possession as a result of the proceedings between himself and the company, then the lease would be treated as cancelled. In spite of all this, on the 9th June, 1961 the company filed another suit in this High Court, being Suit No. 910 of 1961 (Thacker's Press and Directories Ltd. v. The Metropolitan Bank Ltd. and others) against both Auddy and the Bank, for a declaration that the consent decree dated 21st March, 1958 passed in this suit was void, for an order setting aside and/or cancelling the same and for other reliefs. In the plaint in that suit serious allegations of misrepresentation and fraud were made against Auddy as well as the Bank, in the affidavit-in-opposition filed by Auddy herein, the said suit has been characterised as mala fide, vexatious and frivolous, the object of which was to prevent the execution of the consent decree passed as early as 21st March, 1950. Having filed the suit, the company made an application for an injunction restraining Auddy from executing the consent decree. On the 17th July, 1961 this application was dismissed. Against this order the company filed en appeal, being Appeal No. 161 of 1961, and made an application for interim stay. On the 2nd August, 1961 an order was made by the Court of Appeal granting an ad interim injunction restraining Auddy from executing the consent decree, if the company paid to him a sum of Rs. 10,000/- by 3rd August, 1961 and a sum of rupees 15,947/- by 10th August, 1961. These sums were paid, but when the application came up for hearing it was dismissed on the 24th August, 1961. Now this application has been made in this suit for relief against forfeiture under the consent decree dated 21st March, 1958. The time for payment under that consent decree was 15 days from that date. I have now been asked to extend that time, to enable the company to make payment in terms of the decree and thus avoid forfeiture of the lease.

2. The first point that has been taken against, this by Mr. Ray is that the petitioner company was challenging the validity of the consent decree dated 21st March, 1958 and in respect thereof a suit and an appeal were pending. Yet, in this application it was asking for extension of time granted under the same decree. This anomaly was so very evident that at the first hearing of this application, the learned Advocate General prayed for an adjournment to withdraw the suit and the appeal. This adjournment was granted subject to payment of cost. I have been informed that Suit No. 910 of 1961 and the pending appeal No. 40 of 1959 have now been withdrawn. The learned Advocate General has framed his case in the following manner: He says that under the consent decree it has been expressly provided that the decree was based on non-payment of rent. Therefore, the matter came within the scope of Section 114 of the Transfer of Property Act. Under that provision, the court is entitled to make an order granting relief to the lessee, against a forfeiture of the lease for nonpayment of rent. According to him, good grounds have teen shown for the delay that has occurred and although the decree laid down a period of 15 days for payment, that period should be extended. The three points that arise are as to whether relief against forfeiture can be given in the case of a consent decree and as to whether it can be made in execution proceeding and as to whether upon the fact of this case, any relief should be granted. The learned Advocate General has relied upon a number of decisions. The first case is Surendra Nath Banerjee v. Secretary of State, 24 Cal WN 545 : (AIR 1920 Cal 716). In that case, Government sued the defendants, the late Mr. Surendra Nath Banerjee and his son for recovery of possession of a plot of land in the Barrackpore Cantonment. The suit was compromised, by which the defendants admitted the title of Government and agreed to hold the land under it and undertook within two months of the passing of the decree to execute an agreement in favour of Government, embodied in the terms of compromise. In the compromise decree, there was a default clause to the effect that the plaintiff would take khas possession of the land by executing the decree if no such agreement was executed. The defendants did not execute the agreement within two months as stipulated, whereupon the Government applied for execution and prayed for recovery of possession. Before the executing court, the defendants asked for relief against forfeiture and expressed their willingness to execute the document. It was held that the court was entitled to grant relief against forfeiture, the relation of landlord and tenant having been created by the compromise decree, and it could be done in execution proceedings. Reliance was placed on a Full Bench decision of the Bombay High Court, Krishnabai v. Hari Govind, ILR 31 Bom 15. in the circumstances of the case it was held that the defendant should not be ejected but should be given some further time within which he should execute the agreement. The next case cited is a decision of the Bombay High Court, Balambhat v. Vinayak, ILR 35 Bom 239. This case also relied on ILR 31 Bom 15 (supra), Scott, C. J. held that the power of the court to give relief against forfeiture applies alike to a suit as well as proceedings in execution. The next case cited is also a decision of the Bombay High Court, Gajanan v. Pandurang : AIR1951Bom290 . It was held there that where the compromise decree creates or continues the relationship of landlord and tenant, relief against forfeiture is possible and that ILR 31 Bom 15 (Supra), is still good law, and that it is not inconsistent with the judgment in the later Full Bench decision of the Bombay High Court in Waman v. Yeshwant, AIR 1949 Bom 97. In my opinion, it is not necessary to deal with these cases in detail, because the principle has now been clearly expounded in a Supreme Court decision, Namdeo Lokman v. Narmadabai : [1953]4SCR1009 . In that case, Mahajan, J., laid down the principles governing the exerciss of the court's discretion in granting relief against forfeiture, under Section 114 of the Transfer of Property Act. The learned Judge said as follows :

'In our opinion, in exercising the discretion, each case must be judged by itself; the delay, the conduct of the parties and the difficulties to which the landlord has been put should be weighed against the tenant. This was the view taken by Madras High Court in Appayya Shetty v. Mahammed Beari, AIR 1916 Mad 680 (2), and the matter was discussed at some length. We agree with the ratio of that decision. It is a maxim of equity that a person Who comes in equity must do equity and must come with clean hands and if the conduct of the tenant is such that it disentitles him to relief in equity, then the court's hands are not tied to exercise it in his favour. Reference in this connection may also be made to Ramakrishna Mallya v. Baburaya, AIR 1914 Mad 706 and Ramabrahmam v. Rami Reddi : AIR1928Mad250 .'

The argument of Mr. Daphtary that there was no real discretion in the Court and relief could not be refused except in cases where third party interests intervene is completely negatived by the decision of the House of Lords in Hyman v. Rose, (1912) AC 623. Relief was claimed in that case under the provisions of Section 14 (2) of the Conveyancing Act, 1881 against forfeiture for breaches of covenant in the lease. The appellants offered as the terms on which relief should be granted to deposit a sum sufficient to ensure the restoration of the premises to their former condition at the end of the term and make full restitution. It was argued that the matter was one of discretion and the court should lean to relieve a tenant against forfeiture and if full recompense can be made to the landlord the relief should be granted. Lord Loreburn in delivering the opinion of the House observed as follows :

'I desire in the first instance to point out that the discretion given by the section is very wide. The court is to consider all the circumstances and the conduct of the parties. Now it seems to me that when the Act is so express to provide a wide discretion, meaning, no doubt to prevent one man from forfeiting what in fair dealing belongs to some one else, by taking advantage of a reach from which he is not commensurately and irreparably damages, it is not advisable to lay down any rigid rules for guiding that discretion. I do not doubt that the rules enunciated by the Master of the Rolls in the present case are useful maxims in general and that in general they reflect the point of view from which Judges would regard tan application for relief. But think it ought to be distinctly understood that there may be cases in which any or all of them may be disregarded. If it were otherwise the free discretion given by the statute would be fettered by limitations which have nowhere been enacted. It is one thing to decide what is the true meaning of the language contained in an Act of Parliament. It is quite a different thing to place conditions upon a free discretion entrusted say statute to the court where the conditions are not based upon statutory enactment at all. It is not safe, I think, to say that the court must and will always insist upon certain things when the Act does not require them, and the facts of some unforeseen case may make the court wish it had kept a free hand.'

With great respect we think that the observations cited above contain sound principles of law. We are, therefore, unable to accede to the contention of Mr. Daphtary that though Section 114, T. P. Act, confers a discretion on the court, that discretion, except in cases where third party interests intervene must always be exercised in favour of the tenant irrespective of the conduct of the tenant. It is clear that in this case the tenant is a recalcitrant tenant and is a habitual defaulter. For the best part of 25 years he has never paid rent without being sued in court. Rent has been in arrears at times for six years, at other times for three years and at other times for four years and so on, and every time the landlord had to file a suit in ejectment which was always resisted on false defences. No rule of equity justice or good conscience can be invoked in the case of a tenant of this description. He cannot always be allowed to take advantage of his own wrong and to plead relief against forfeiture on every occasion ......'

Those being the principles applicable to such a case, let us apply them to the facts herein. I will assume for the moment that relief against forfeiture can be granted in respect of a consent decree and in execution proceedings. The question is as to whether such relief should be granted upon the facts of this case. The lease was executed in 1934. As long ago as 1954, the right to forfeit the lease for non-payment of rent was exercised by the landlord. Since then, and until August, 1961 no rents were paid, but, on the contrary a series of litigation were punched. The lessee resisted the suit for ejectment and agreed to certain terms whereby he had to pay the dues of the landlord within 15 days. Not only he did not pay within the stipulated time, but he has taken a false difference that the decree was not by consent, and later on that the lessor was guilty of misrepresentation or fraud. The history of the litigation clearly shows that the lessee was making repeated attempts to have the period of the lease extended without payment of the rent. Further, a third party has not only come into the picture but its rights are inextricably mixed up with the affairs of the lessee. I am referring to the defendant Bank. Now it has obtained an independent lease from the landlord, and although the demise is subject to the result of the pending litigations, I do not think that this affects the question. The learned Advocate General argued that the lessor had accepted the arrears due. I have, however, pointed out the circumstances under which this was done. The money was not paid after an acceptance of the right of the lessor to be paid. On the contrary, it was paid In a suit which has challenged the right of the landlord to receive the money, and the consent decree itself was attacked upon serious allegations of misrepresentation and fraud on the part of the lessor. The money was paid as a condition for obtaining an interim injunction, in an application which was itself dismissed later on. No moneys have been paid on account of dues arising subsequent to the consent decree. It can scarcely be disputed that the lessee has been harassing the lessor in every possible way, for a period of nearly ten years. I have already mentioned the interim objection that the application could not possibly lie for an extension of the time for payment under the consent decree while the company was challenging the consent decree itself. Although I am informed that the suit and the appeal have been withdrawn, my attention has been rightly drawn to the allegation in the petition and the affidavits in this application itself. Here again, the allegation of misrepresentation and fraud on the part of the lessor are repeated, and I must take it, is relied upon for asking the reliefs prayed for. Therefore, it follows that even now the decree is being challenged and the allegations of misrepresentation and fraud are being made against the lessor. It would, therefore, be contrary to all accepted principles adumbrated above, to grant relief against forfeiture, to a tenant of this description. The tenant here has been guilty of a chronic non-payment of rent. It is in involved circumstances. It has been harassing the landlord with frivolous litigations for over ten years. It has taken false defences and instituted frivolous suits and has made a habit of it. The rights of third parties have intervened, it is but apparent that unless the tenant is ejected the same state of things would continue and there will be no end to these series of litigations. The petitioner has not come to a court of equity with clean hands.

3. For the reasons stated above, 1 am of the opinion that the petitioner is not entitled to relief against forfeiture and this application should be dismissed with costs. Certified for counsel. Interim orders vacated. The operation of this order suspended for a fortnight to enable the petitioner to appeal.

4. After a fortnight Sheriff may act on a signed copy of the inutes.

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