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Cook and Co. Vs. C.L. Phillips and ors. - Court Judgment

LegalCrystal Citation
Subject Civil
CourtKolkata
Decided On
Reported inAIR1931Cal133
AppellantCook and Co.
RespondentC.L. Phillips and ors.
Cases Referred and Narayan Das Khetri v. Jatindra Nath Roy Chaudhury A.I.R.
Excerpt:
- .....1929. by an indenture dated 23rd february 1925 the respondent in this appeal, c. l. phillips, leased to the insolvent certain land in dover lane ballygunge, in the suburbs of calcutta, for a term of 30 years, at a progressive monthly rent ranging from its. 3,000 to rs. 3,700. the insolvent carried on business as a horse dealer and veterinary surgeon and occupied the demised premises for the purposes of that business. the lease provided that all buildings or structures which should be erected by the lessee should at the expiration or determination of the tenancy, become the property of the lessor. it further provided by a separate clause as follows:(b) and that all buildings and erections hereafter erected or put up by the lessee on the said demised premises and all fixtures and.....
Judgment:

Rankin, C.J.

1. The insolvent, Charles Spooner Hart, was adjudicated in the Court of the District Judge, 24 Parganas, on 21st January 1929. By an indenture dated 23rd February 1925 the respondent in this appeal, C. L. Phillips, leased to the insolvent certain land in Dover Lane Ballygunge, in the suburbs of Calcutta, for a term of 30 years, at a progressive monthly rent ranging from Its. 3,000 to Rs. 3,700. The insolvent carried on business as a horse dealer and veterinary surgeon and occupied the demised premises for the purposes of that business. The lease provided that all buildings or structures which should be erected by the lessee should at the expiration or determination of the tenancy, become the property of the lessor. It further provided by a separate clause as follows:

(b) And that all buildings and erections hereafter erected or put up by the lessee on the said demised premises and all fixtures and partitions thereon shall belong to the lessor at the expiration or sooner determination of the said term, but that it shall be lawful for the lessee having first paid and discharged the rent payable hereunder, and having observed and performed all covenants and conditions on the part, of the lessee herein contained at the expiration or sooner determination of the said term or within two calendar months thereafter, to take down and remove for his own benefit all machinery, plant, tenants, fixtures and fittings used or employed in or about any building which the lessee has erected or may erect upon the said demised premises without materially damaging the buildings then standing thereon by such removal.

2. The lease further contained a proviso for re-entry in case the rent should remain unpaid for 15 days. By August 1928, the lessee had fallen into arrear with the rent and on 21st of that month he wrote to the lessor's agent:

In view of the fact that the rent of the above premises is in arrear, and your client Mr. Phillips, the landlord of the premises, desires to take over possession of the premises in accordance with the terms of the lease, we hereby consent and agree to his terminating the lease and entering into possession.

3. On the same date, according to the landlord and his witness, Miss Alton, the landlord went with her to the premises taking some durwans with him and took possession thereof. There was, however, some delay on the part of the insolvent in giving vacant possession, and on 15th September, when the insolvent filed his petition in insolvency, his livestock and effects were still upon the premises and the business was still being carried on more or less actively. A receiver having been appointed on this date, it appears that he took charge of the insolvent's business and effects and on 20th September he-was directed by the Court to sell the livestock, goodwill, stock-in-trade and machinery subject to all risks at a price not less than Rs. 15,000. The sale was held on 24th September 1928 on which date Messrs. Cook and Company, the appellants, purchased the same for the sum of Rs. 15,500.

4. The question upon this appeal is whether Messrs. Cook and Company have, by their purchase, obtained a good title to the machinery and plant which consist of an engine, boiler, weighing machine, pressing machine etc., used for the preparation of crushed food for horses. These assets appear to be, and have been treated as being, of the character generally known as 'trade fixtures.'

5. The learned District Judge has held that they belong to the landlord and that Messrs. Cook and Company did not, by their purchase, obtain, as against the landlord, any title to the same.

6. It is not contended that the insolvent has at any time paid up the arrears of rent so as to entitle him to the benefit of the provision that within two calendar months of the expiration or sooner determination of the term, he was to be at liberty to take down and remove for his own benefit all machinery, plant, tenants fixtures, etc., and if the present question falls to be decided upon the terms of the lease, the decision of the learned District Judge appears to be unexceptionable. By the Transfer of Property Act, all things attached to the earth (within the meaning of that phrase as defined by Section 3 are, by Section 108, in the absence of a contract or local usage to the contrary, things which the lessee may remove at any time during the continuance of the lease, provided he leaves the property in the state in which he received it. It is clear that the law in no way forbids a special contract as to such matters and the special contract in this case must clearly bind the insolvent, his mortgagee and the creditors in the insolvency.

7. It was, however, contended for the appellants, Messrs. Cook and Company, that the lease having been surrendered on 21st August 1928 the provisions of the lease with reference to what was to happen at the expiration or sooner determination thereof did not take effect: Ex-parte Glegg [1881] 19 Ch. D. 7; Ex parte Sir W. Hart Dyke in re Morris [1882] 22 Ch. D. 410. The provisions of the lease being thus out of the way, the appellants' contention is that as in India there is no absolute rule of law that whatever is affixed to or built on the soil becomes a part of it, the effect of the surrender of the lease is to leave the landlord without that right to the fixtures which would otherwise have accrued to him upon the expiration or sooner determination of the term. Reliance is placed for this contention upon the cases of Thakur Chandra Paramanik [1866] 6 W.R. 228 Ismail Kani v. Nazar Ali [1903] 27 Mad. 211 Angammal v. Malie Mahomed [1915] 38 Mad. 710 Kanaya, Lal Jalan v. Rasik Lal Sadhukhan [1914] 23 I.C. 762 and Narayan Das Khetri v. Jatindra Nath Roy Chaudhury A.I.R. 1927 P.C. 135.

8. This contention of the appellants was not raised before the learned Judge. The respondent Phillips, in his petition filed on 25th September 1928 (para 7) stated that:

The said lease has been surrendered by the lessee and your petitioner is in possession of the property.

9. In his deposition he says:

That lease was terminated on 21st August.. Lesslie and Hinds, my agents, received such a letter. This is the letter (Ex. 2). We went to the premises to take formal possession and left men there.

10. In his cross-examination' he says:

There was written correspondence about the surrender.

11. The insolvent in his deposition says:'

This Ex. 2 is the letter I wrote surrendering; the lease .... I did not put any value on the lease as it was no longer mine but surrendered.

12. The letter of 21st August must, however, speak for itself. What it says is first, that rent is in arrear; second, that the landlord desires to take over possession in accordance with the terms of the lease; and, third, that the lessee agrees to the landlord's terminating the lease and entering into possession. Laymen or lawyers may speak of this transaction as a ' surrender,' but it is clearly not a surrender. The bargain was not that landlord and tenant should each give up the whole of his right under the lease, but that the tenant consented to the exercise by the landlord of an undoubted right given to him by the conditions of the lease to put an end to the term with the consequences provided by the lease to take effect in that event.

13. On this view, there is no substance in this appeal. The proviso for re-entry contains no provision for notice and the Transfer of Property Act until it was amended in 1929 provided by Section 111, Clause (g) 'and in either case the lessor or his transferee does some act showing his intention to determine the lease'. This requirement had been clearly fulfilled on 21st August 1928 when the lessor took possession with his durwans.

14. The appeal should be dismissed with costs to the respondent Phillips, save that the order of the District Judge for costs must be reduced to Rs. 80 in order to conform to the High Court's Rules. Hearing-fee in this Court six gold mohurs.

C.C. Ghose, J.

15. I agree.


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