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Keshob Lal Nag Mazumdar and ors. Vs. Jnanendra Nath Ghose and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1914Cal706,24Ind.Cas.538
AppellantKeshob Lal Nag Mazumdar and ors.
RespondentJnanendra Nath Ghose and ors.
Cases ReferredImporters and Traders Insurance Co. v. Christie
Excerpt:
landlord and tenant - damages, measure of--action for breach of covenant not to assign--bengal tenancy act (viii of 1885), section 155. - .....court further held that the defendants were liable to pay to the plaintiffs compensation for the breach of covenant on the basis of the profit which would have accrued to the plaintiffs if the defendants had not been granted relief against the forfeiture. upon appeal, the subordinate judge dismissed the suit. on appeal to this court, the decree of the subordinate judge was reversed and the case was remitted to him in order that he might determine the amount of reasonable compensation payable by the defendants to the plaintiffs under section 155. the subordinate judge has held that the measure of damages in an action for breach of a covenant not to assign is such a sum as will put the landlords in the same position, as if the covenant had not been broken. he has found that the sublease.....
Judgment:

1. This is an appeal by the plaintiffs in a suit under Section 155 of the Bengal Tenancy Act for ejectment of the tenants--defendants on the ground that they have broken a condition on breach of which they are, under the terms of a contract between them and the landlords, liable to ejectment. The condition which is alleged to have been broken is one against assignment, and the case for the plaintiffs is that there has been a breach of the covenant not to assign as the defendants have executed a sub-lease for 999 years. The Court of first instance decreed the suit and held that the plaintiffs wore entitled to a decree in terms of Section 1.55. The Court further held that the defendants were liable to pay to the plaintiffs compensation for the breach of covenant on the basis of the profit which would have accrued to the plaintiffs if the defendants had not been granted relief against the forfeiture. Upon appeal, the Subordinate Judge dismissed the suit. On appeal to this Court, the decree of the Subordinate Judge was reversed and the case was remitted to him in order that he might determine the amount of reasonable compensation payable by the defendants to the plaintiffs under Section 155. The Subordinate Judge has held that the measure of damages in an action for breach of a covenant not to assign is such a sum as will put the landlords in the same position, as if the covenant had not been broken. He has found that the sublease has not prejudiced the position of the landlords, as the sub-tenant is a far richer and more substantial man than the original tenants, and that there is not a shadow of suggestion that the plaintiffs are likely to sustain any injury in future on account of the sub-lease. In this view, the Subordinate Judge has held that reasonable compensation' within the meaning of Section 155 of the Bengal Tenancy Act is nominal damages' which ho has assessed at Rs. 5.

2. On behalf of the plaintiffs it has been contended before us that the Subordinate Judge has assessed the compensation on a principle erroneous in law : and it has been argued that compensation for breach of the covenant should be based on the loss sustained by the landlords by reason of the refusal of the Court to make a decree for ejectment in their favour. In our opinion, this contention is clearly unfounded. Section 155, Sub-section (1), provides as follows : A suit for the ejectment of a tenant on the ground (a) that he has used the land in a manner which renders it unfit for the purposes of the tenancy or (b) that he has broken a condition on breach of which he is, under the terms of a contract between him and the landlord, liable to ejectment shall not be entertained, unless the landlord has served, in the prescribed manner, a notice on the tenant specifying the particular misuse or breach complained of, and, where the misuse or breach is capable of remedy, requiring the tenant to remedy the same, and, in any case, to pay reasonable compensation for the misuse or breach, and the tenant has failed to comply within a reasonable time with that request.' Sub-section (2) then specified the terms of the decree which is to be passed in favour of the landlord in such a suit. The compensation, according to the terms of the section, is for the breach. To determine this compensation, we must contrast the position of the landlord immediately before the breach with that after the breach, and then ascertain the loss, if any, he has sustained by reason of the breach. The plain intention of the Legislature is that the compensation shall be for the injury which may have been caused to the landlord by the breach of the covenant, in other words, the measure of damages is such a sum as will place the landlord in the same position as if the breach had not taken place. The appellants invite us, however, to ignore altogether, for the purpose of assessment of damages, the period antecedent to the broach, to confine our attention solely to the period Subsequent to the breach, and then to contrast the position of the landlord if ho is allowed a decree for ejectment with his position if such relief is withheld. The advantage the landlord thus loses is according to the appellants the true measure of the damages for breach of covenant by the tenant. The contention of the landlord in substance, is that compensation for breach' means compensation for denial of relief by way of ejectment on account of the breach.' The obvious answer to the argument of the appellants is that if this had been the intention of the Legislature the section might have been differently framed. It is, further, plain that the two classes of contingencies under which a suit for ejectment may be instituted under Section 155, namely, misuse of the land or breach of a condition, are placed in the same category in so far as the assessment of reasonable compensation is concerned, and that if the contention of the appellants were to prevail, there would be, in the case of assessment of compensation for misuse of the land, a manifest absurdity. In that case, the amount of the compensation would, the appellants were constrained to concede, be independant of the extent or nature of misuse. Whatever the extent or nature of the misuse of the land might be, whether the misuse affected a half or a hundredth part of the property, whether it consisted in the erection of a building or the conversion of the holding into a brick-field, there would be in every such event a liability to forfeiture incurred by the tenants and as the landlords would, if relief against forfeiture were not granted to the tenants, be entitled to a decree for ejectment of the latter from the entire premises, the true measure of damages, according to the contention of the appellants, would be the loss of possession of the entire property, irrespective of the extent or nature of the misuse of the land by the tenants. It would further follow that the measure of damages according to this argument would be the same in every case, whether it is a case of misuse of land or breach of covenant, and the Court would have no occasion to assess reasonable compensation.' This could never have been the intention of the Legislature.

3. We may add that the view we take as to the true measure of compensation for breach' of covenant, is supported by high authority. It was observed by Blackburn, J., in Williams v. Earle 3 Q.B. 739 : 9 B. & S. 740 : 37 L.J. Q.B. 231 : 19 L.T. 238 : 16 W.R. 1041 that the measure of damages in an action for breach of a covenant not to assign is such a sum as will place the landlord in the same position as if the covenant had not been broken. Concrete illustrations are not difficult to imagine. Thus, although the tenant's liability on the covenants of the lease does not, as a rule, cease on assignment, the landlord may still suffer damage, for instance, his right of distress might be worth much less to him. There may, again, be cases in which the defendant by his assignment has freed himself from future liability under the lease to his landlord, the plaintiff, as, where he has himself come in by assignment, the landlord is entitled to such a sum as will put him in the same position, as if he still had the defendants' liability instead of that of a person of inferior pecuniary ability to look to for breaches of covenant both past and future [See Langton v. Henston (1905) 92 L.T. 805.]. It has been contended, however, that if this view is taken a tenant may with impunity commit a breach of a covenant not to assign, because he can, in most eases, if not always, escape forfeiture by payment of nominal damages. We are not impressed by this argument, because, if the landlord has not suffered substantial damages by reason of the broach of the covenant, justice does not demand that he should he allowed to claim from the tenant anything beyond nominal damages. But cases are conceivable in which the landlord may suffer substantial damage by reason of the breach of a covenant not to assign. One of such cases is to be found in Lepla v. Rogers (1893) 1 Q.B. 31 : 5 R. 57 : 68 L.T. 584 : 57 J. 55., where it was ruled that if a sub-tenant proposes to carry on a business which might, to the tenant's knowledge, result in burning the promises, the tenant is liable on the covenant for the loss of the premises by fire caused by the sub-tenant's business. On the other hand, it was held in Importers and Traders Insurance Co. v. Christie 5 Robinson 169., that for the breach of a covenant not to sub-let to any one whoso business should be considered objectionable by the lessor, the lessee was liable for nominal damages inasmuch as the tenant's business, although objectionable to the lessor, was found to have caused him no pecuniary damage. We are, therefore, of opinion that, in the case before us, as the plantiffs have failed to establish that they have suffered, any damage measurable in money by reason of the breach of the covenant not to sub-let the defendants are liable only to pay nominal damages. Our attention has finally been drawn to the provisions of Clause (b) of Section 14 of 44 and 45 Vic. c. 41 (Conveyancing Act) which excludes from the operation of the section, on which Section 155 of the Bengal Tenancy Act is apparently moulded, cases of breach of a covenant not to assign. This in no way assists the argument of the appellants, as the Legislature in this country has placed a covenant not to assign in the same category as other covenants, for the purpose of grant of relief against forfeiture to the tenant. We are also not prepared to give effect to their contention that they should have substantial damages, because they have suffered indignity by reason of the sub-lease in favour of their co-sharer who has thereby got greater advantages and more influence over the tenants. In our opinion, the view taken by the Subordinate Judge is clearly right and his decree must be affirmed. The appeal is accordingly dismissed with costs.

4. This judgment, it is conceded, will govern the other appeals which are all dismissed with costs.


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