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Ram Chunder Serowgie and anr. Vs. Gowri Nath Dutt - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1926Cal927,97Ind.Cas.376
AppellantRam Chunder Serowgie and anr.
RespondentGowri Nath Dutt
Cases ReferredFletcher v. Sondes
Excerpt:
calcutta rent act (iii of 1920), sections 9, 19 - agreement to pay salami made before 15th march, 1920, whether affected by the act. - lancelot sanderson, c.j.1. this is the plaintiffs' appeal from the judgment of mr. justice chotzner delivered on the 19th of january, 1925, whereby he dismissed the suit.2. the suit was brought on the 8th of february, 1922, by the plaintiffs, as lessees, against the defendants who were the lessors or the representatives of some of the deceased lessors.3. the lease was dated the 1st of october, 1919, and it was in respect of premises called 13, puggyaputty street in calcutta, and the lessors agreed to grant the lease, upon the lessees paying to the lessors a salami of rs. 80,000 by two equal instalments, one of which was to be paid by the lessees at or immediately before the execution of the lease and the other was to be paid by the lessees to the lessors within three years from the date.....
Judgment:

Lancelot Sanderson, C.J.

1. This is the plaintiffs' appeal from the judgment of Mr. Justice Chotzner delivered on the 19th of January, 1925, whereby he dismissed the suit.

2. The suit was brought on the 8th of February, 1922, by the plaintiffs, as lessees, against the defendants who were the lessors or the representatives of some of the deceased lessors.

3. The lease was dated the 1st of October, 1919, and it was in respect of premises called 13, Puggyaputty Street in Calcutta, and the lessors agreed to grant the lease, upon the lessees paying to the lessors a salami of Rs. 80,000 by two equal instalments, one of which was to be paid by the lessees at or immediately before the execution of the lease and the other was to be paid by the lessees to the lessors within three years from the date thereof, the lessees giving security for the sum of Rs. 50,000 to the satisfaction of the lessors. It was witnessed that in pursuance of the premises and in consideration of the rent thereby reserved in consideration of the payment of Rs. 40,000, and in consideration of the lessees agreeing to pay the sum of Rs. 40,000 within three years from the date thereof, the lessors demised the premises for a period of eight years commencing from the 1st day of Assin 1326 B.S. The rent for the first two years was Rs. 1,620 and thereafter at the rate of Rs. 2,000 per month. There was a further provision which provided that the lessees would deposit with the lessors Government Promissory Notes of the face value of Rs. 75,000, which the lessois undertook to return to the lessees on payment of the said salami of Rs. 40,000, payable within the third year of the demise.

4. In lieu of the Promissory Notes referred to in the lease, Rs. 50,000, were deposited with a certain Bank in November and December 19t9.

5. It appears that the plaintiffs were minded to purchase a property, called 19, Darpa Narain Tagore Street, and for the purpose of that purchase they required the sum of money, which was deposited in the Bank, and the manner in which the title-deeds of the property, 19, Darpa Narain Tagore Street, came to be deposited with the defendants is set out in para. 3 of the written statement which is to be found at page 17 of the paper-book. The learned Advocate for the appellants in arguing the appeal accepted this statement as accurate for the purpose of the appeal. Paragraph 3 of the written statement is as follows:--'With referenee to the allegations in para. 6 of the plaint, the defendants admit that the plaintiffs purchased premises No. 19, Darpa Narain Tagore Street, but they deny that the title-deeds of the said premises were deposited with Mr. K.K. Dutt, as attorney for the plaintiffs or for safe custody. On the contrary, the defendants assert that in or about the month of March, 1920, the plaintiffs, who had been negotiating for the purchase of the said premises, had agreed to deposit the title-deeds relating thereto upon the completion of its purchase, with Mr. K.K. Dutt, as Solicitor for the defendants by way of equitable mortgage with a view to create a charge on the said premises in favour of the defendants to secure the payment to them of the sum of Rs. 40,000 secured by the cash deposit as aforesaid and in lieu of such deposit, coupled with the agreement to execute a formal deed of charge when called upon, the defendants on their part permitting the plaintiffs to withdraw the amount in deposit in order that the plaintiffs may be in funds to effect the said purchase and they aver that the title-deeds in question were, in fact, deposited with the said Mr. K.K. Dutt in Calcutta pursuant to such agreement. The plaintiffs withdrew the said sum of Rs 50,000 on the 12th day of June, 1920, and after the completion of the purchase of the said premises on the 8th day of October, 1920, the plaintiff Ram Chunder Serowgie acting for self and on behalf of his co-plaintiff deposited the title-deeds as aforesaid and the defendants submit that they are entitled to the benefit of the said security.'

6. The deposit of the title-deeds appears to have been made on the 8th of October, 1920.

7. The prayers upon which the plaintiff-appellants relied are paras. (b), (c) and (d) of the plaint, which are as follows:

(b) That it may be declared that the, defendants are not entitled to recover the salami of Rs. 40,000 which the plaintiffs agreed to pay to the defendants within three years from the date of the said lease, that is, the 1st October, 1919.

(c) The defendants, their servants and agent may be directed to make over the original title-deeds of the premises No. 19, Darpa Narain Tagore Street, to the plaintiffs.

(d) It may be declared that the premises No. 19, Darpa Narain Tagore Street, are not charged in favour of the defendants in respect of the said salami of Rs. 40,000.

8. The Calcutta Rent Act of 1920 came into force on the 5th of May, 1920. The operation of that Act was extended by the Amendment Act of 1923 until the end of March, 1924.

9. The further Amendment Act of 1924 extended the operation of the Act of 1920 until the end of March 1927; but there was a proviso as follows: 'Provided that after the 31st day of March, 1924, this Act shall cease to apply to any premises the rent of which exceeded two hundred and fifty rupees a month or three thousand rupees a year on the 1st day of November 1918.' Inasmuch as the rent of the premises in question at the abovementioned date was much above Rs. 250 a month, the Rent Act ceased to apply to these premises, on the 31st of March, 1924.

10. The questions which have been raised in this appeal, relate to the Rs. 40,000 which the appellants, by the terms of the lease, agreed to pay within three years from the date thereof.

11. This sum was payable by the terms of the leases on or before the 30th September 1922. At that time the Rent Act of 1920 was in force and applicable to the premises in question. It was contended on behalf of the appellants that by reason of Section 9 of the Act, it would have been unlawful for the respondents to require the payment of this sum at the time at which it was payable by the terms of the lease, viz., September, 1922, that the debt was extinguished and that the appellants were entitled to the return of the title deeds. Section 9 provides as follows:--'(1) It shall not be lawful for any person in consideration of the grant, renewal, or continuance of a tenancy of any premises, to require the payment of any fine, premium, or any other like sum in addition to the rent.

(2) Where any such payment has been made after the date of the commencement of this Act, the amount shall be recoverable by the tenant by whom it was made from the landlord, and may, without prejudice to any other method of recovery, be deducted from any rent payable by him to the landlord:Provided that nothing in this section shall affect any such payments made in accordance with an agreement entered into before the 15th day of March, 1920.

12. The first question is whether Section 9 of the Calcutta Rent Act, 1920, is applicable to the payment of-the Rs, 40,000.

13. It seems to have been assumed at the trial that at any rate while the 1920 Act was in force and was applicable to the premises in question, it would have been unlawful for the defendants to have required the payment of this sum, and the appeal was in the first instance argued on this basis.

14. The argument on behalf of the respondents was that the debt was not extinguished, but that the remedy was taken away or suspended.

15. This Court reserved judgment, and on consideration it seemed to the Court that there was an important question which had not been argued, viz., whether the provisions of the first sub-section of Section 9 applied to the Rs. 40,000 and the matter was further argued to-day.

16. The first sub-section of Section 9 taken by itself and in its ordinary meaning obviously contemplated something which would be done in the future, i.e., after the commencement and during the operation of the Act. The words are 'It shall not be lawful for any person in consideration of the grant, renewal, or continuance of a tenancy of any premises, to require the payment of any fine, premium, or any other like sum in addition to the rent.' These words in their ordinary meaning would amount to a prohibition against the matter referred to in the section being done in the future.

17. Taking the grant of a tenancy as an instance, in my judgment, the sub-section means that if a tenancy is to be granted after the commencement of the Act and during the operation of the Act, it shall not be lawful for any person to require the payment of any fine, premium, or any other like sum in addition to the rent in consideration for or as a condition of such grant.

18. If this be the meaning of the first subsection, it is clear that the present case would not be within the purview of the subsection, for the lease was granted on the 1st October, 1919; and, although the salami of Rs. 80,000 was a condition or consideration for the grant, it was not unlawful for the lessor to require it within the meaning of the section.

19. The second sub-section provides 'Where any such payment has been made after the date of commencement of this Act the amount shall be recoverable by the tenant by whom it was made from the landlord.'

20. It is material to notice that the words are 'any such payment'; the words must refer to the payment which is mentioned in Sub-section (1).

21. Therefore, upon the above construction of Sub-section (1), the second sub-section means (taking again the instance of a grant) that in a case where a grant of a tenancy has been made after the commencement of the Act, and a fine or premium has been required as consideration therefor and where such fine or premium has in fact been paid after the commencement of the Act, the amount can be recovered by the tenant from his landlord.

22. Then comes the proviso which runs as follows: 'Provided that nothing in this section shall affect any such payments made in accordance with an agreement entered into before the 15th day of March 1920.'

23. It is to be noted that the words used are 'in accordance with an agreement.' These words, in my opinion, contemplate something different from a grant, renewal or continuance of a tenancy mentioned in the first sub-section.

24. In my opinion the proviso contemplates (taking again the instance of a grant) the grant of a tenancy which is made after the commencement of. the Act, as to which a fine or premium has been required as the consideration thereof and which has in fact been paid; but the proviso refers also to an agreement which has been entered into before the 15th March, 1920, and to a payment which has in fact been made in accordance with such agreement.

25. In short, I am of opinion (taking again the instance of a grant) that the meaning is that if a grant of a tenancy is made after the commencement of the Act, and if a fine or premium is required as the consideration thereof, and if it has been paid after the date of the commencement of the Act, the tenant can recover it from the landlord, unless the payment, which has in fact been made, was in accordance with an agreement entered into before the 15th March, 1920.

26. The above construction, in my judgment, makes the provisions of the section intelligible and reasonable, and gives effect to all parts of it, in the ordinary meaning of the words.

27. That being in my judgment the proper construction of the section, the present case is not within it: for the grant of the tenancy was made by the lease of the 1st October 1919, and the agreement in accordance with which the Rs. 40,000 was payable was made before the 15th March, 1920, viz,, on the 1st October, 1919.

28. In connection with this part of the case Section 19 of the 1920 Act has to be considered. It provides as follows : '(1) Whoever knowingly receives, whether directly or indirectly, on account of the rent of any premises, any sum in excess of the standard rent or any fine, premium, or any other like sum in addition to standard rent, except as provided in Section 10, shall, on the complaint of the party aggrieved, be liable, on the first occasion, to a fine which may extend to five hundred rupees, and on a second or subsequent occasion, in regard to the same, or any other premises, to a fine which may extend to one thousand rupees, to be imposed, after summary enquiry, by the President of the Tribunal or the principal Civil Court, as the case may be.

(2) A person shall be deemed to receive a sum in excess of the standard rent, if he receives any consideration representing a money value in excess of such standard rent.

29. The case dealt with in Section 10, which is excluded from the operation of Section 19, is the case of a lease for not less than 20 years for the purpose of development in which case a landlord is permitted to receive a premium or other like sum in addition to the rent.

30. No other cases are specifically excluded from Section 19 and if this section is to be read literally and without any qualification or implication, it will have curious effects. As for instance Section 4 provides that where the rent of any premises has been or is hereafter, during the continuance of the Act, increased so as to exceed the standard rent, the amount of such excess shall, notwithstanding any agreement to the contrary, be irrecoverable. There are, however, provisos to the section, one of which is No. (iii), which provides: 'Provided that nothing in Sub-section (1) shall apply to the rent payable under any lease or any agreement to lease entered into before the date of the commencement of this Act, for a period of five years or upwards.'

31. The result, therefore, is that if an agreement to lease has been entered into before the date of the commencement of the Act for a period of five years and upwards, the rent can be recovered by the landlord, although it is in excess of the standard rent, as defined by the Act.

32. But although the landlord can legitimately recover such rent from his tenant by reason of the provisions of Section 4, the provisions of Section 19 if read literally, and without any qualification or implication, will make him liable to be fined if he receives such rent and knows it to be in excess of the standard rent.

33. Again, assuming a case where a landlord could legitimately retain, in addition to the rent, a sum paid in respect of a premium which is covered by the proviso in Section 9, he might be liable to be fined by reason of the provisions of a. 19 if he knowingly received the premium in addition to the standard rent.

34. Section 19 is a penal section and it must be construed strictly and reasonably; and I decline to construe it in a way which would lead to such curious and unreasonable results as those abovementioned.

35. In my judgment, Section 19 must be directed against a person who knowingly receiver a sum in excess of the standard rent, or a fine, premium or any other like sum in addition to the standard rent in contravention of the provisions of the Act.

36. It cannot, in my opinion, mean that if certain of the provisions of the Act authorise the landlord to receive and retain such sums, he is still to be liable to a fine by reason of the provisions of Section 19.

37. I have the strongest objection to interpolating any words into a section, which I do not find there, but I cannot bring myself to believe that the Legislature, when passing s 19, could have intended such an unreasonable effect as that which I have pointed out.

38. I am of opinion, therefore, for the reasons already stated, that Section 9 does not affect the agreement to pay the Rs. 40,000 and the receipt of it by the defendants would not have rendered them liable to be fined under Section 19.

39. This is sufficient to dispose of the appeal, and I do not propose to deal with the other points raised during the argument.

40. I am of opinion that the learned Judge was right in dismissing the suit, but I am not prepared to adopt the arguments or reasons on which the learned Judge relied. It is only right to mention again that the point, on which this appeal has been decided, was not raised before the learned Judge.

41. For the reasons which I have expressed in my judgment, the appeal must be dismissed with costs.

42. We do not interfere with the order of the learned Judge as to costs.

43. The respondents are entitled to only one set of costs in this appeal, and we do not allow them any costs as regards to-day.

Rankin, J.

44. The plaintiffs are the lessees of certain premises in Calcutta known as No. 13, Puggyaputty Street under an Indenture of demise, dated the 1st October, 1919. The defendants are the lessors. The lease was for eight years, at a rent for the first two years of Rs. 1,620 per month, and for the remainder of the term of Rs. 2,000 per month: as part of the consideration for the grant of the term, the lessees agreed to pay a salami or premium of Rs. 80,000 by two equal instalments. The first Rs. 40,000 was payable and was paid at once. The second Rs. 40,000 was to be paid within three years from the date of the lease. It became demandable, therefore, at the end of September, 1922. For this second instalment the lease provided that the lessees should give security by depositing with the lessors' Government Promissory Notes to a nominal value of Rs. 75,000.

45. It is conceded by Counsel for the plaintiff-lessees that notwithstanding certain allegations made in the plaint, the facts as to this security must he taken as correctly stated in the third paragraph of the written statement. It is clear, therefore, that instead of depositing Government Promissory Notes, the lessees deposited Rs. 50,000 with a certain Bank in the joint names of themselves and one of the defendant-lessors; that in March, 1920, the parties agreed that this sum might be withdrawn by the lessees to be used in the purchase of another property and that the title-deeds of this other property should be deposited with the lessors' attorney, in lieu of the Rs. 50,000, and held as the security required by the lease. The deeds were in fact deposited in October, 1920.

46. In my judgment this substitution of one form of security for another makes no difference to the rights of the parties for the purposes of this case.

47. The lessees commenced this suit in February, 1922, that is, before the second instalment of the salami became payable according to the tenor of the leasa. They say that this sum is no longer due to the lessors because the Calcutta Rent Act, 1920, (Beng. Act III of 1920) has released them from all obligation to pay it and has forbidden the lessors to receive it or at least to require it. They ask for the reliefs (b), (c) and (d) mentioned at the end of the plaint--that is for a declaration that there is no debt and no subsisting charge on their property and for a return of their title-deeds.

48. This suit of 1922 came on for hearing in January, 1925. By this time the Rent Act had expired so far as the premises now in question are concerned. The Act came into force on 5th May, 1920. It was a temporary Act expressed to be in force for three years, but by Bengal Act II of 1923 its operation was extended till the end of March, 1924. During this period (nearly four years) the Act applied to premises in Calcutta without any exception for the more highly rented premises. After March, 1924, the Act was continued as regards premises let at Rs. 250 per month or less, but in respect of other premises the Act expired in March, 1924. Cf. Kundamal Dalimia v. Dyer : AIR1925Cal571 .

49. The plaintiffs' case is that the Rs. 40,000--being the second instalment of salami or premium--became due in September, 1922: that the Rent Act was then in force as regards the demised premises; that Section 9 thereof with or without Section 19 had the effect of releasing them from all liability to pay; and that the proviso at the end of Section 1 makes that position permanent, notwithstanding the expiry of the Act.

50. The learned Judge has dismissed the suit. He has not decided whether the Rs. 40,000 was or was not a sum to which Section 9 ors. 19 of the Act applied while the Act was in force. On the assumption that it was within Section 9 he has held, as I understand, first, that the expiry of the Act so far as the demised premises are concerned has put an end to the plaintiffs' case. Secondly, that Section 9 merely held in abeyance the defendants' right to claim the money and did not extinguish it.

51. Proceeding on the same assumption, learned Counsel for the defendants raised various contentions upon the first hearing of this appeal. He contended that the effect of Section 9 is merely to take away his remedy; that although he could not bring a suit to recover the amount or get the assistance of the Court to enforce the security, his right to the Rs. 40,000 is not extinguished by Section 9 and the plaintiffs must be refused the reliefs which they seek. He contended also that the effect of the Act of 1924 is to make the proviso at the end of Section 1 inapplicable to these premises with the result that all defendants' original rights are now restored to them and the position is the same as though Section 9 had never been enacted. He claimed further that even if the debt was obliterated and the security void, the Court could put the plaintiffs upon terms. Finally, he argued that since the defendants had agreed to allow the plaintiffs to substitute one security for another, the second security was supported by afresh consideration and was in a better position than the first. These last two arguments appear to me to have no substance.

52. As regards all other arguments which have been employed in this case, it appeared to me that there has been some error in method. The first thing necessary is to construe Section 9; to find out exactly what the first sub-section means and whether this particular sum of Rs. 40,000 is or is not caught by it. Argument has now been heard as to this. The section is a recension of Section 1, Sub-section (2) of the Statute 5 & 6, Geo. V, c. 97, but I am not aware of any decisions throwing light nm the present case and none have been cited at the Bar.

53. The first sub-section says: 'It shall not be lawful for any person in consideration of the grant, renewal or continuance of a tenancy of any premises, to require the payment of any fine, premium or any other like sum in addition to the rent.' This seems to me to mean that the Statute is forbidding a certain type of bargain or arrangement being made in the future. It contemplates a landlord making his terms with a new tenant or an old tenant. Some one wants to obtain a tenancy or to obtain a renewal or a mere permission to stay on. The question is, what terms shall the landlord exact. The Statute has already made provision against his exacting more than the standard rent and now for various excellent reasons it is made unlawful for him to stipulate for a premium. Apart from the fact that in such an Act as this the landlord is not unnaturally regarded as being in the better bargaining position--as holding the rod while the tenant bows to it--it is quite ordinary English to speak in this sense of his requiring a premium in consideration of a grant or renewal. Moreover, whether the sub section includes anything else or not, it clearly includes such cases and makes illegal for the future all such stipulations.

54. Does it also mean by the same phrase to forbid a person who had in the past made a valid bargain for a fine or premium, to ask for payment of his debt, and to forbid this irrespective of the question whether the sum was either debitum or solvenduvi before the passing of the Act? Taking the first sub-section by itself, I should doubt this exceedingly. I should doubt it, not because the clause has to be looked at as a penal or restrictive clause, though this is true; nor because of any notions of fairness or unfairness in such a policy. I should doubt it; first, because the natural meaning seems to be preferable to an extended meaning. To require a payment in consideration of a renewal--such a phrase seems applicable to the landlord at the time of bargain. To require payment of something previously promised in consideration of a renewal granted in the past seems to be a different thing. If it be intended to be covered by the words of the clause, the words look to me like a misfit. Secondly, in construing an inartificial English phrase, I think one meaning is better than a combination of two. Thirdly, there is nothing in the structure of the first sub-section to detract from the force of the consideration that retro-active interference with contracts is not to be presumed from ambiguous language. Is there then anything in the second sub-section which shows that the Section is not confined to cases whereafter the commencement of the Act a question arises as to the terms on which a tenancy shall be granted, a renewal given, or a continuance assented to? It, is argued that there is, and that the proviso shows that payments of premium made in accordance with agreements entered into prior to the Act are hit by the first part of the second sub-section on the footing that they have been made illegal exactions by the first sub-section. On such payments it is said some and only some are saved by the proviso. This argument, though it appealed to me at first sight, seems upon further consideration to be wrong. In the first place arguments from proviso which seek to extend the operative effect of the substantive enactment are not legitimate unless there is real ambiguity in the substantive enactment. This I take to be the principle laid down by the House of Lords in West Derby Union v. Metropolitan Life Assurance Society (1897) A.C. 647 : 66 L.J. Ch. 726 : 77 L.T. 284 : 61 J.P. 820. Now I doubt whether the first sub-section can be read as including such a case as the present. But in any case I think the proviso has a meaning quite consistent with the meaning which I attribute to the first sub-section. It too is referring only to cases where after the commencement of the Act, somebody has come to a landlord to arrange for a grant, renewal or continuance. If at that time the landlord has, contrary to the first sub-section, stipulated for a premium and has received it, he can prima facie be made to disgorge. But there is one exception. It may be that by an agreement prior to 15th March, 1920, the tenant had a right on certain terms to a renewal or a party had a right to a lease. It may even be that by a previous agreement a person has become bound to take a lease or a further lease on certain terms. What is to happen then if the terms include a provision for a premium? The section as I read it means to begin with, that the landlord cannot insist on any such contractual right to a premium, He may, of course, decline to renew and the tenant in that case can hold over on payment of rent to the extent allowed by the Act, In the case of a stranger, a landlord may, of course, decline without a premium to grant the promised lease merely on the other terms of the agreement, but he will presumably be unable to get from anybody more than standard rent. Even if in cases of this sort the other party agrees to pay the premium and gets his grant or his renewal, this agreement so long as it is executory will be unenforceable. But if the old agreement controlling the negotiations was prior to 15th March, 1920, and if the premium be paid, the proviso saves the transaction ; because although the landlord has, after the commencement of the Act, exacted it in consideration of a grant, renewal or continuance, nevertheless the payment has been made in accordance with an agreement prior to the date fixed as dividing for this purpose agreements presumably fair from agreements likely to be one sided (or at least as dividing argeements which the Legislature should not wholly ignore from agreements which should be ignored altogether). To a payment so made nothing in either sub-section of Section 9 is to be applied; it is neither an unlawful exaction nor is it recoverable from the landlord.

55. The facts of the present case are on this view outside Section 9 altogether. The defendants, after the commencement of the Act, have not stipulated for anything and were not in a position to do anything forbidden by Section 9 since no question of grant, renewal or continuance arose or could well arise between 5th May, 1920, and the end of March, 1924. In 1919 a promise to pay this sum of Rs. 40,000 was required by them in consideration of the grant of this lease. That the defendants could not be made to pay it until after September, 1922, is true enough, but it seems to me to be irrelevant under Section 9.

56. There is nothing in any part of this section or in Section 10 or in any other part of the Act which leads me to think that the special problem of deferred premium was present to the mind of the draftsman. A premium is usually payable at once, and I think this fact accounts for the phraseology of Sub-section (1) of Section 9 and for the reference to the Controller in Section 10.

57. There is another possible reading of the second sub-section of Section 9. I do not think it is a right view, but it may be as well to state and distinguish it. It may be said. that 'any such payment' means merely ' any payment of a line, premium or other like sum in addition to the rent ' regardless of whether it has been required after the commencement of the Act in consideration of a grant or renewal. On this view, Sub-section (1) makes certain stipulations illegal for the future : Sub-section (2) makes certain future payments recoverable by the tenant; and the latter may apply to payments made although the former does not apply to the stipulation that they should be made. On this basis the plaintiffs' case that the Rs. 40,000 could not be sued for must be put upon the ground that under Sub-section (2) it appears that the plaintiffs if they paid it could recover it from the defendants. But that is the very ground which the proviso cuts from under their feet. On thi3 view of the sub-section there is no way of reading the proviso so as to exclude this sum of Rs. 40,000.

58. The next provision to consider is Section 19. Mr, Sircar for the plaintiffs concedes that he cannot rely on Section 19 as an independent argument and that some words, e g 'contrary to this Act' must be implied. I have come to the same conclusion and may as well state my reasons. The lease in this case was entered into before the date of the commencement of the Act and was for a period of eight years-[cf. Section 4(1)(iii)] Accordingly, the defendants were expressly permitted by the Act to take more than the 'standard rent' as defined by Section 2(f). The 'standard rent'--if it had ever mattered--might have been assessed at any figure which the Controller thought just [under Section 15(3)(c) but until fixed was apparently Rs. 1554--i.e., somewhat less than the lower of the two rates provided for by the lease.

59. By the terms of Section 4 there are four classes of exceptions to the restriction put upon the amount of rent that can be demanded Again it would seem clear that the proviso to Section 9 validates payments made of premium or hue in certain cases and allows the landlord to retain them.

60. These things in mind one reads in Section 19 that whoever knowingly receives...any sum in excess of the standard 'rent...' shall be liable to a fine. Also that whoever knowingly receives any fine or premium or any other like sum in addition to the standard rent except as provided by Section 10 shall be liable to a fine Does this penal section mean that what a landlord is expressly allowed by Section 4 to recover he can be fined for receiving; that he can be fined for receiving what he is expressly allowed to retain by the proviso to Section 9 but not for receiving what he is allowed by Section 10 to take? If not, then can it be meant hat a receipt validated by the proviso to Section 9--which says that nothing in the section shall affect it--is to be in a better position than a receipt which is not within the mischief of the section at all, and is wholly outside its prohibition? After all Section 10 is only a proviso to Section 9. Is the exaction of a premium after May, 1920 to be lawful, provided it accords with an agreement of February, 1920, and receipt of a premium an offence though covenanted in 1919? It seems to me that unless some implication is made the section runs amuck. I do W say that there is any general presumption as to a penal clause. No one can tell what the Legislature may not penalise It penalises many acts which are in nowise malum in se. But this Act makes ft fairly elaborate attempt to say what rent may be charged and what premiums may not be charged and Section 19 is prima facie to be read as a penal clause in aid of the policy of the Act. Even so, it may add something to what has already been prohibited and to read into it a qualification which it does not contain is either plainly necessary or plainly wrong. In this case, however, the alternative is to read it as giving indirectly a re definition of the civil rights of landlords and tenants which have already been dealt with in detail and one must impute to the Legislature intentions which are incredible in view of other provisions in the same enactment. Since then the words of the section must be taken sub modo, one must find the true meaning by construing it as a penal section in aid of the restrictions of the Act.

61. I do not say that it would make good drafting if 'whoever receives' is read as 'whoever contrary to this Act receives' or 'whoever being restricted to take only a standard rent receives'. Nothing that can be suggested will make good drafting of a section such as this which contains express Exception as to Section 10 and no Exception as to Section 4 or the proviso to Section 9. But the rule as regards the proper construction of a penal enactment may be seen from the language of Best, C.J., in Fletcher v. Sondes (1826) 3 Bing. 501 at p. 580 : 1 Bligh (N.S.) 144 : 4 E.R. 826 : 130 E.R. 606 : 30 R.R. 32, and from the judgment of the Judicial Committee in The Gauntlett (1872) 4 P.C. 184 at p. 191 : 41 L.J. Adm. 65 : 26 L.T. 45 : 20 W.R. 497. This seems to me to be a case in which, to use the words of Lord Justice James 'the person charged has a right to say that the thing charged, although within the words, is not within the spirit of the enactment'.

62. I do not find that it is any part of the policy of the Act or within the scope and objects of the Act to render nugatory or invalid covenants to pay salami entered into prior to the Act in consideration of a term granted prior to the Act. The Legislature has made provision to guard against hardship in certain cases of this class. In cases that are within Sub-section (1) of Section 4 the Controller can reduce the 'standard rent' under Section 15(3)(c) and the tenant can get relief by this means. In cases which are not within Sub-section (1) of Section 4 the Legislature has refused that relief. Nowhere, so far as I can see, has it purported to render invalid by retrospective action such covenants in leases granted in past years.

63. Indeed, apart altogether from any principle applicable solely or with special force to penal clauses, a comparison of Section 19 with Sections 4 and 9 seems at once to let in the principle upon which it is not infrequently necessary to limit the effect of the words contained in an enactment: it being more reasonable to hold that the Legislature expressed its intentions in an unguarded manner than that a meaning should be given to them which could not have been intended--(cf. Maxwell, 6th Edition, pages 148-9). These reasons combine with the presumption against the Legislature enacting retrospectively.

64. I should add that if by taking the first sub-section of Section 9 in an extended sense, or even in a not too distended sense, I found that the language of Section 19 could without apparent paradox really be taken as it stands, I should adopt it. I should regard that as the best interpretation, which was the interpretation of both. But apart from the fact that the same process cannot be applied to the Exceptions in Section 4, there is no possible interpretation of Section 9 which can in any wise explain why Section 10 should free the landlord from liability to a fine and the express proviso to Section 9 should leave him under it.

65. For these reasons I am not prepared to 'give the plaintiffs a decree on the basis of an implication as to their civil rights, derived from Section 19, when I can find no other basis in the Act, and when I do find in the Act provisions which seem to me to be contrary to any such intention.


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