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Mahendra Nath Srimani Vs. Kailash Nath Das and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKolkata
Decided On
Reported inAIR1929Cal50
AppellantMahendra Nath Srimani
RespondentKailash Nath Das and ors.
Cases ReferredIn Hollies Stores Ltd. v. Timmis
Excerpt:
- .....may very well say that:the contract which the defendants now seek to enforce is quite a different contract from what was entered into and i am, therefore, not bound to carry it out. 12. the learned advocate for the respon' dents, however, argues that when asoke took rent from the defendants, he must be considered to have been aware of the covenant in the lease and knowing the terms of the lease as well as the covenant he never repudiated the covenant for renewal and it must, therefore, be held that ashoke tacitly entered into a fresh contract for renewal of the lease. this argumeut seems to me to be too farfetched. in order to bind a person on the allegation that he entered into a contract for doing a certain thing, there must be definite evidence that he did actually enter into a.....
Judgment:

B.B. Ghose, J.

1. This is an appeal by the plaintiff against the judgment and decree of the Subordinate Judge, 2nd Court, 24 Parganas, dated 6th August 1925. The appeal arises out of a suit for ejectment and for mesne profits or, in the alternative, if the Court holds that the plaintiff is bound to grant a lease to the defendants, then for fixing the rent at the rate of Rs. 25 per cottah per mensem. The Subordinate Judge has dismissed the claim for ejectment and for mesne profits but has directed that the plaintiff is bound to grant a lease to the defendants in terms of the contract, I shall relate presently, at the rent of Rs. 5 per cotta per mensem.

2. The facts of the case giving rise to this litigation are as follows: The property in suit along with other properties belonged to one Jadab Krishna Singha. He died in the year 1867 leaving his mother Padmamani, two widows Lakshmipriya and Fulkumari and a daughter Probhabati,him surviving. After his death, Fulkumari brought a suit for partition which ended in a compromise. Under the compromise, Padmamani Lakshmipriya and Pulkumari each got one-third of the estate left by Jadab Krishna. Lakshmipriya died in 1878 and, therefore, Pulkumari got two-thirds of the estate left by Jadab Krishna as the successor of Lakshmipriya's interest. There was subsequently a suit by certain creditors against Fulkumari who obtained a decree in the Munsif's Court and put her interest to sale. It was purchased by one Krishna Prosad on 28th February l883. On 16th July 1888, Probhabati purchased the two-thirds share from Krishna Prosad and she thus became entitled to the two-thirds share in the estate having purchased the widow's interest of Fulkumari in it. On 26th May 1895, Padmamani granted a lease of her one-third .share to Prabhabati for 21 years. The lease was to terminate in May 1916. On 11th July 1902 Prabhabati granted a lease to the predecessors of the defendants of the disputed property and its contiguous portion for a period of 20 years. The lease was to commence from 17th March 1902 and it was to terminate on 17th March 1922. Prabhabati had three sons at the time: Ajay, Achal and Ashoke. Ajay and Achal had attained majority but Ashoke was a minor. In the lease Ajay and Achal joined their mother although they could possibly have no interest in the property under the law and Prabhabati purported to execute it as guardian for Ashoke. It should be stated here that Prabhabati's husband was alive and at that time he was the natural guardian of the minor Ashoke. In the lease there was a stipulation that the major lessors would procure confirmation of the lease from Ashoke on his attaining majority and there was an indemnity clause if they failed to do so. Although nothing turnsupon that, it should be stated that no deed of confirmation, as stipulated, was executed or registered by Ashoke on his attaining majority. In this lease there was a clause for renewal for 10 years after the expiry of the term at the option of the lessees. It is stated at the place where the demise has been made for 20 years down to 17th March 1922, that at the option of the lessee the lease would continue for a further term of ten years to be determinable nevertheless under certain circumstances which it is unnecessary to mention. At the end of the document there is the stipulation which should be given in extenso:

Provided also and it is hereby agreed that if the lessees shall be desirous of taking a new lease of the premises hereby demised after the expiration of the said term of 20 years here by granted the lessor and all Other necessary parties if any will make and execute to the lessees at their costs a new and effectual lease of all and singular the said premises hereby granted or demised for a term of ten years to commence from and after the expiration of the term hereby granted at and under the like rents and dues but in case of the said business of the lessees being at the time in a flourishing condition and the said demised premises having increased in value at and under the rents and dues to be fixed by the lessor on reference to aforesaid circumstances and subject to the like covenants and provisions as are herein contained etc.

3. In the year 1909 there was further trouble among the ladies which was settled by the three ladies i.e., Padmamani, Fulkumari and Prabhabati, surrendering their estates in favour of the three reversionery heirs of Jadab Krishna, viz., Ajay, Achal and Ashoke on certain conditions as to receipt of maintenance by Padmamani and Fulkumari. These three grandsons of Jadab Krishna in their turn executed a document in favour of their father and mother giving them the right to enjoy the usufruct of all the properties they had thus obtained during their lifetime. The husband of Prabhabati died in the year 1912. Prabhabati herself died on 11th April 1916. In the meantime, Padmamani died in the year 1913. Fulkumari is still alive. On 15th September 1917 the three brothers effected a partition of their properties including the property which had been leased by Prabhabati to the defendant's predecessors. The division of these properties was made by metes and bounds. They were divided into three plots and after partition, plot A fell to the share of Ashoke, plot B to the share of Ajay and plot G to the share of Achal. The areas of these three plots are different, apparently having regard to their value. After the partition, the rent payable by the defendants' predecessors which was Rs. 220, was divided. Ashoke was to get Rs. 82, Ajay another sum of Rs. 82, and Achal Rs. 56 per month; and all these three brothers separately realized their rent in that share. The present plaintiff then purchased plot A from Ashoke by a deed dated 20th October 1917. Then there was a dispute between the plaintiff and the predecessors of the defendants and the plaintiff brought a suit for ejectment. That was settled by the defendants' predecessors purchasing a half-share of the property which the plaintiff had purhased from Ashoke by a deed dated 1st August 1921, the purchase price being at the rate of Rs. 3000 per cotta.

4. Since then, the defendants had been paying rent at the rate of Rs. 41 to the plaintiff. The present suit, as I have already stated, was brought mainly for ejectment on 5th June 1923. The plaintiff alleges that after the expiry of the term of the lease granted by Prabhabati, which term expired on 17th March 1922, the defendants have no right to remain on the land and if they desire to remain on the land, they are bound to pay rent at the rate of Rs. 25 per cotta. The allegation of the defendants shortly stated is that the plaintiff has no title to the property in question; secondly, that they are entitled to remain on the land in the exercise of their option to get a renewal of the lease according to the terms contained in the lease dated 11th July 1902 and the rent payable by them for the portion of the property now in the plaintiff's possession must be at the rate per cotta at which the rate of rent should be worked out according to the original lease with reference to the whole area, which appears to be Rs. 1-1-0 per cotta. Several issues were framed in the Court below. The principal question for decision was covered by issues, 5, 6 and 8 and the controversy before us was mainly with regard to these. They are as follows:

5th: Is the claim for renewal of the lease valid and binding on the plaintiff and is the defendant entitled to have the lease renewed? If so, on what terms?

6th: Was the lease in question confirmed and ratified by the plaintiff's vendor?

8th: Has the position of the defendants been changed by their purchasa?

5. All these issues were decided against the plaintiff by the Subordinate Judge. With regard to issue 10 which runs thus: What will be the fair rent of the property? the Subordinate Judge decided that the fair rent would be Rs. 5 per cotta per mensem. It is argued on behalf of the plaintiff that the Subordinate Judge is wrong in deciding issues 5, 6 and 8 against the plaintiff and that he is entitled to claim ejectment after the expiry of the lease. With regard to issue 10 the plaintiff's contention is that if he is considered to be bound to renew the lease, it should be at the rate demanded by him, that is to say, Rs. 25 per cotta per month or, at any rate, Rs. 12 per cotta, as that would be the fair rent according to the value of the property which was purchased by the defendants themselves at the rate of Rs. 3000 per cotta. He, however, contends that it is not left to the Court to decide what should be the fair rent of the property, as under the agreement contained in the lease it was the leasor who was entitled to fix the rent as he thought proper and the Court has no authority to interfere with the rent fixed by the lessor. The defendants have also filed a cross-objection with regard to the rate of rent fixed by the Court and their objection is that the rent should be at the rate Re. 1-1 per cotta which should be calculated from the original rent fixed at Rs. 220 for the entire area.

6. There cannot be any question that the plaintiff would be entitled to ejectment unless the defendants could show that they are entitled to enforce the covenant for renewal as against the plaintiff. The principal question, therefore, is whether the covenant for renewal contained in the lease of July 1902 is enforceable as against the plaintiff. The Subordinate Judge has apparently proceeded upon the view that Prabhabati had a Hindu widow's estate as daughter of Jadab when she granted the lease in favour of the defendants' predecessors. He has found that Ashoke after attaining majority had ratified the lease by receiving rent from the defendants for a number of years. Ashoke is, therefore, bound by all the terms of the lease and also by the covenant for renewal, as the learned Judge was of opinion that it would be inequitable to hold otherwise. He held that

the renewal clause is as much an important part of the lease as the other clauses, and it must ba taken that Asoke ratified the entire contract with the conevant for renewal and not without it.

7. In that view, he held that the plaintiff as assignee of Ashoke is bound by the covenant for renewal. He has also held that the letters of the plaintiff in reply to the demand for renewal made on behalf of the defendants show that the plaintiff was willing to be bound by the renewal clause and these letters prove a . clear admission of the plaintiff as to the contract for renewal being enforceable as against him. I need not recite the other reasons given by the Subordinate Judge in his judgment for holding against the plaintiff as I am going to deal with the arguments addressed to us by the parties and as the learned advocate for the respondents repeated the very arguments which had been adopted by the Subordinate Judge. The first question for consideration is, is the covenant for renewal a part of the lease or, in other words, is it a part of the demise If that is so, then it follows that the plaintiff must fail according to the reasoning of the Subordinate Judge. In order to decide this question, it is necessary to find what was the right of Prabhabati in the property in question when she gave the lease. She had not got a Hindu widow's estate in the property. She was in possession as purchaser of the interest of Fulkumari who had a Hindu widow's estate. This interest was to. last during the lifetime of Fulkumari, that is, with regard to two-thirds of the property. With regard to the remaining one-third, she held under a lease from Padmamani which was to come to an end in May 1916. The covenant for renewal of the entire lease after 17th March 1922 was intended to come into operation after the expiry of the term of that lease when Prabha-bati would have no interest in that one-third share. Can it be said that the covenant of renewal with regard to this one-third share was a contract which in its inception was binding on the land I think not. The covenant with regard to that share must, therefore, be considered to be a mere personal covenant which could be enforced against her if she had got a fresh lease herself and not one which can be said to run with the land. Again, if Prabhabati had executed the lease in the capacity of a qualified owner having a Hindu widow's estate (which she had not at that time) then her sons had no interest in the property at the time and Prabhabati, acting as guardian for the infant son, could not possibly bind any interest which the son might acquire after the death of the ladies. Even if the infant had any subsisting interest in the property, Prabhabati as guardian could not enter into any contract on behalf of the infant which would be binding on him : see the case of Sarwarjan v. Fakruddin Mahomed [1912] 39 Cal. 1232. This proposition is not contested by the learned advocate for the respondents. The contract, therefore, is altogether void so far as Asoke is concerned and being a void contract, it cannot be said to be effective by ratification as a void contract cannot be made good by ratification. It is further to be borne in mind that Prabhabati was not the natural guardian of Ashoke but his father would be so. The Subordinate Judge seems, therefore, to be under an error when he held that Ashoke was bound by the contract for renewal of the lease, as he had ratified the lease by acceptance of rent.

8. Then, again, assuming that the covenant by Prabhabati could be binding on Ashoke by ratification, the question arises as to whether by ratification of the lease itself, it can be said that the covenant for renewal has been ratified. In order to hold that, it must be found that the covenant for renewal is a part of the demise. It is not disputed on behalf of the respondents that the covenant for renewal is a mere contract, which can only be given effect to in case of refusal to perform it by the lessor, by enforcing specific performance of the contract by the lessee. That these covenants do not form part of the demise has been laid down in some English cases. An option of purchase is analogous to the right of renewal. It has been held that it is a covenant quite apart from the demise, although arising by reason of the demise and flowing from it : See the case of Raffety v. Schofield [1897] 1 Ch. 937. In Sherwood v. Tucker [1924] 2 Ch. 440. p. 445, Pollock, M.R. observed that:

a distinction is to be drawn between the demise and the contract under which the option to purchase was given. They are essentially different.

9. It has been argued on behalf of the respondents that an option of purchase and an option for renewal are quite different and Woodall v. Clifton [1905] 2 Ch. 257 is relied on. The difference, however, is an anomaly in the English law as pointed out by Romerf, L.J. at p. 279 of the report and we are not here concerned with the anomalous distinction between the two. It is again urged, relying on an old English case, that a covenant for renewal creates a lien. That does not mean that any present interest is created in the land by such a covenant. I may here refer to the case of Hand v. Hall 2 Ex. D 353. where Lord Cairns, L.C. speaking of a lease and a covenant for renewal contained in it observes:

Whereas there is not anything to be done by the tenant in the first part of the agreement to create a demise, in the second part something has to be done by him before that part takes effect, and until that is done it is impossible to tell whether a tenancy shall come into force or not. I think, therefore, that it is absolutely necessary to divide the contract into two parts. I think the agreement is an actual demise, with a stipulation superadded that if at his option the tenant gives the landlord a notice of his intention to remain, he shall have a renewal of his tenancy for three years and a half.

10. It has also been held in this Court that a covenant for renewal does not operate as a present demise but remains only a contract. Boyd v. Kreig [1890] 17 Cal. 548, Basanta Charan v. Rajani Mohan A.I.R. 1922 Cal. 514. As the contract of the lease and the Covenant for renewal are two separate contracts, in my opinion, the ratification of the lease does not necessarily amount to a ratification of the covenant for renewal. The ground, therefore, upon which the Subordinate Judge held that Ashoke was bound by the covenant for renewal as he had ratified the lease by acceptance of rent does not appear to be at all sound.

11. There is another difficulty in the way of the defendants in enforcing the term of the renewal and it is that the contract, as it was made in the lease of 1902, cannot be sought to be enforced as it was made nor is it sought to be enforced in its entirety. It has been held that the right of renewal is a privilage granted to the lessee : See the cases of Bastin v. Bidwell [1881] 18 Ch. D. 238 per Kay, J., Finch v. Underwood [1876] 2 Ch. D 310 per James, L.J. and, therefore the renewal can only be of the contract as made. For example, if the contract is made with two tenants, one of them cannot enforce the contract : see Finch v. Underwood [1876] 2 Ch. D 310. In Hollies Stores Ltd. v. Timmis [1921] 2 Ch. 202 the covenant for renewal was made on condition that there should be three guarantors named for the payment of the rent. One of the named guarantors died during the currency of the lease and the tenant sought to exercise the option of renewal either by substituting another guarantor for the deceased guarantor or by putting in the entire rent for the whole period of the renewal. The Court refused the claim for renewal on the ground that the contract should be performed as it was made and as that cannot be done even if there was no reasonable ground for the landlord to refuse specific performance, the Court would not enforce it. In the present case, the contract for renewal as made is incapable of performance. As I have already observed, there was a division of the property among the three brothers. Subsequently, the defendants purchased one-half of the interest which originally belonged to one of the brothers. The defendants had acquiesced in the partition by agreeing to pay rent separately to each of them according to the different shares which, the brothers thought, were their just shares. The position, therefore, of the parties not being the same as it was when the contract was entered into, even assuming that Prabhabati's contract would be binding on Ashoke, Ashoke's assignee may very well say that:

the contract which the defendants now seek to enforce is quite a different contract from what was entered into and I am, therefore, not bound to carry it out.

12. The learned advocate for the respon' dents, however, argues that when Asoke took rent from the defendants, he must be considered to have been aware of the covenant in the lease and knowing the terms of the lease as well as the covenant he never repudiated the covenant for renewal and it must, therefore, be held that Ashoke tacitly entered into a fresh contract for renewal of the lease. This argumeut seems to me to be too farfetched. In order to bind a person on the allegation that he entered into a contract for doing a certain thing, there must be definite evidence that he did actually enter into a contract and I am, therefore, unable to accept this contention. It is, again, urged that the plaintiff himself did the very same thing, that is, took rent from the defendants for his share. The answer is, that the taking of the rent during the term of the lease means that the plaintiff was precluded from disputing the defendants' right to remain in possession by virtue of the lease. But that cannot import the other condition that he was bound to renew the lease after the term had expired. Here I may state another contention on behalf of the respondents and it is that the defendants in their correspondence accept the terms of the lease including the right of renewal. Special reference is made to Ex. D (1) a letter the plaintiff's solicitor wrote in reply to the letter of the solicitor for the defendants asking for renewal of the lease. The plaintiff said that he was willing to renew the lease if rent was paid at the rate of Rs. 25 per cotta per month. That does not mean that he was willing to renew the lease on any other terms. The letter must be read as a whole in order to understand the attitude of the plaintiff. It, therefore, does not seem to me that the plaintiff can be said in any way to have entered into a fresh contract for the purpose of renewing the lease which was granted by Prabhabati.

13. There is another difficulty in the way of the plaintiff as to the right which Ashoke had obtained. Prabhabati, as I have already stated, was in possession as a purchaser of Fulkumari's estate. In 1909, all the three ladies surrendered their qualified interest in favour of the grandsons of Jadab Krishna. The effect of such surrender is that the grandsons took the estate as it was at the time of their grandfather, Jadab Krishna Singha, and they might very well urge that they are not bound by covenant made by Prabhabati, although by reason of the fact that they had accepted rent from the defendants, they could not dispute the defendants' right to remain on the land till March 1922. In the view I take, it is not necessary for me to discuss the question as to the right of a qualified owner like a Hindu widow to grant a lease for a term of years with a clause for renewal at the option of the lessee, particularly as to what would be the effect of such a covenant after the death of the widow. It seems to me that it is at least doubtful that a Hindu widow can enter into such a covenant so as to bind the reversioner. Alienations by a widow in certain circumstances may be binding upon the reversioners: but it is difficult to say that a covenant for renewing a lease to take effect after the death of the widow would be so binding under any circumstances. It need only be added that a covenant for renewal does not operate as a present demise but is only a contract, and a contract to make a grant in future does not necessarily stand on the same footing as an alienation. On these grounds, in my judgment, the Subordinate Judge is wrong in holding that the defendants are entitled to enforce the right of renewal of the lease according to the agreement entered into by Prabhabati in 1902.

14. Another question was argued on behalf of the respondents and it was that although the whole of the contract cannot be performed under Section 15, Specific Relief Act, the defendants may be allowed to enforce the contract with regard to the part of the property now in the posssession of the plaintiff. This section, in my judgment, does not entitle the defendants to ask for specific performance of the agreement with regard to the small portion of the property which now remains in the possession of the plaintiff on payment of a proportionate part of the rent. The defendants are not prepared to pay rent for the entire lease hold as demised by the lease of 1902 to the plaintiff for this small portion of the land and 1 do not think that we can make a new contract for the parties by splitting up the demised premises and apportion the rent payable for that portion only. As the defendants, in my judgment, are not entitled to enforce specific performance of the covenant for renewal, they have no right to remain on the land and the plaintiff would be entitled to a decree for ejectment.

15. I should, however, express my opinion with regard to another point which was urged by the learned advocate for the appellant and it is that the Court was left no discretion by the terms of the covenant to fix a fair rent even if the defendants are held to be entitled to enforce the contract. That portion of the covenant has already been recited. It is not that the tenants would be bound to pay a fair and reasonable rent in which case the Court might have assessed the rent. Here the discretion is entirely in the lessor and the lessor may fix any rent that he pleases. It is, however, contended by the learned advocate for the respondents that the lessor was bound to fix the rent by taking into consideration the fact whether the business of the lessee was in a flourishing condition or not and whether the value of the premises had increased. With regard to the increase of the value of the premises, there is no dispute; but it is stated that the condition of the business of the lessee was not flourishing. That is a matter of opinion only and if the plaintiff thought that the business of the lessee was in a flourishing condition he might then fix such rent as he pleased. The Subordinate Judge himself does not accept the story that the business of the defendants was not in a flourishing condition. In my opinion, if the defendants want to stay on the land and if I had thought that they were entitled to a decree for renewal of the lease, I should have held that they were bound to pay the rent demanded by the lessor, however unreasonable that might be. At any rate, as the plaintiff has asked for as a last resort, the rent would be calculated at the rate of Rs. 12 per month on the price of the property which was paid by the defendants for the half-share originally belonging to Ashoke. This disposes of the cross-objection of the defendants which was with regard to the rate of rent. This appeal must, therefore, be decreed. The plaintiff's prayer for khas possession should be allowed and he is also entitled to claim mesne profits for the property from after the date of the expiry of the lease of 1902, that is, 17th March 1922, till the date of recovery of possession. Under Order 20, Rule 12, Civil P.C., the Court will hold an enquiry as to such mesne profits which have accrued from 18th March 1922 till the date of delivery of possession or such other time as provided in the rule and the Court below will pass a final decree for mesne profits in accordance with the result of such enquiry. The plaintiff appellant is entitled to the costs of both Courts. The cross-objection is dismissed without costs.

Cammiade, J.

16. I agree.


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