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Syed MohsenuddIn Vs. Bhagaban Chandra Sutradhar and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1921Cal444,61Ind.Cas.443
AppellantSyed Mohsenuddin
RespondentBhagaban Chandra Sutradhar and ors.
Cases ReferredKripa Sindhu v. Annada Sundari Debi
Excerpt:
landlord and tenant - occupancy raiyat, competency of, to surrender to landlord portion of non--transfer' able holding transferred by him. - .....that an occupancy raiyat not bound by a lease or other agreement for a fixed period, has the power to surrender his holding, that he may ordinarily exercise such power in respect of the entire holding and that, by arrangement with his landlord, he may exercise the power in respect of a portion of his holding. but the question remains, whether he may not by reason of his prior acts with regard to the holding disentitle himself, entirely or to a limited extent, to exercise that power. for the solution of this question, it is essential to bear in mind the elementary rule that all powers, other than powers collateral and powers coupled with a trust or duty, may be suspended or destroyed either wholly or in part, by the person competent to exercise the power. the rule applies as well.....
Judgment:

Asutosh Mookerjee, Acting C.J.

1. This reference has been made in connection with an appeal by the plaintiffs in a suit for ejectment. The facts material for the elucidation of the question of law involved in the appeal lie in a narrow compass. Two persons, Durgacharan and Gunamoy, held a non--transferable occupancy holding under the plaintiffs. The tenancy included ten plots of land and the rent payable was Rs. 13--2 a year. On the 17th December 1915 the tenants sold a portion of their holding to the first defendant. The landlords, who were not parties to this transaction, thereafter sued their tenants for recovery of arrears of rent. The tenants expressed their unwillingness to pay rent for the entire holding as they had already transferred a portion. This was plainly no defenes to the suit. The parties, however, tame to an arrangement; the tenants surrendered to their landlords the land they had sold, and took settlement of the remainder for an annual rent of Rs. 6--4. On the basis of this arrangement, a decree was made in favour of the landlords for a very mush smaller sum than what they had claimed. The landlords then instituted the present suit on the basis of the surrender, to eject the transferee from the plots in his possession, The defendant contested the validity of the surrender in the Trial Court. Thereupon, the following issue was raised:

Is the Istate valid and sufficient? Is the plaintiff entitled to get khas possession?.

2. The Court of first instance answered the question in the affirmative and decreed the suit. Upon appeal, the Subordinate Judge reversed that decision. On second appeal to this Court, it was argued that the original tenants were entitled to surrender to the landlord what they had previously transferred to the defendant. This view was controverted by the respondent who maintained that there could be no valid surrender of what had already been transferred. The Division Bench came to the conclusion that there was a conflict of judicial opinion on the question of the competence of an occupancy raiyat, who has transferred a portion of his nontransferable holding to surrender the portion so transferred to his landlord, whether by surrender of that portion alone or by surrender of the whole inclusive of such portion. They have accordingly referred the following question to a Fall Bench for decision:

When an occupancy raiyat has transferred part of his non transferred holding, is he competent to surrender to his landlord the portion so transferred, either by surrender of that portion alone or by surrender of the whole inclusive of such portion.

3. As the question arises in an appeal from appellate decree, under the Rules of Court the entire appeal has been referred to the Full Bench for disposal.

4. It may be premised at the outset that the sale of a portion of the holding by the original tenants to the first defendant did not operate as a forfeiture of the tenancy so as to entitle the landlord to re--enter. This follows from the decision in Durga Prosad Sen v. Doula Gazee 1 C.W.N. 16, where Banerjee, J., held, on the authority of the earlier decisions in Durga Charan v. Pandab Nath (unreported) and Kabil SarJar v. Chunder Nath Nag Chowdhry 20 C. 590 : 10 Ind. Dec. (N.S.) 399, that the transfer by an occupancy raiyat of a part of his non--transferable holding does not entitle the landlord to recover possession of the land transferred by ejecting the transferee. This proposition was affirmed by a Full Bench Dayamoyi v. Ananda Mohan Roy 27 Ind Cas. 61 : 42 C. 172 : 18 C.W.N. 971 : 20 C.L.J. 52, where in it was ruled that the transfer of the part was operative against the raiyat and that the landlord was not ordinarily entitled to recover possession of the holding, unless there had been an abandonment or a relinquishment of the holding or a repudiation of the tenancy. This position must now be deemed well established and explains why the plaintiff landlord in this case is constrained to seek ejectment of the transferee defendant on the basis of a surrender by the original tenant. We must, consequently, examine the validity of the surrender which forms the foundation of the claim.

5. In view of the provisions of Section 86 of the Bengal Tenancy Act, there can be no doubt, that an occupancy raiyat not bound by a lease or other agreement for a fixed period, has the power to surrender his holding, that he may ordinarily exercise such power in respect of the entire holding and that, by arrangement with his landlord, he may exercise the power in respect of a portion of his holding. But the question remains, whether he may not by reason of his prior acts with regard to the holding disentitle himself, entirely or to a limited extent, to exercise that power. For the solution of this question, it is essential to bear in mind the elementary rule that all powers, other than powers collateral and powers coupled with a trust or duty, may be suspended or destroyed either wholly or in part, by the person competent to exercise the power. The rule applies as well where the power is present as where it is future and to arise upon a contingency Albany's case (1586) 1 Coke 110(b) : 76 E.R. 250, and to personal as well as to real estate: Noel v. Henley (1825) McCl. & Yo. 302 : 29 R.R. 805 : 148 E.R. 427, The rule applies, further, to powers appendant and in gross. Reference may in this connection be made to West v. Berney (1819) 1 Russ. & M. 431 : 39 E.R. 167 : 32 R.R. 237, where Sir John Leach, V.C., stated that the person invested with the power may act towards the estate in such a manner that 'his dealing with the estate, so as to create interests inconsistent with the exercise of his power must extinguish his power; the general principle is, that it is not permitted to a man to defeat his own grant.' The power is not in the nature of a trust; it may be exercised or not, and a dealing with the estate inconsistent with the exercise of it, determines the option to exercise it. The subject is discussed at length by Lord St. Leonards in his Classical Treatise on Powers (8th Edition 1861, pp. 88 and 905) where reference is made amongst others to Smith v. Death (1820) 5 Madd. 371 : 21 R.R. 314 : 56 E.R. 937, Cunynghame v. Thurlow (1832) 1 Russ. & M. 436 note : 39 E.R. 169 : 32 R.R. 242, Bickley v. Guest (1831) 1 Russ. & M. 440 : 39 E.R. 170, and Smith v. Houblon (1859) 26 Beav. 482 : 122 R.R. 200 : 53 E.R. 984. In the case first mentioned, Sir John Leach V.C., stated the result of the authorities to be that 'every power reserved to a grantee...for life, though not appendant to his own estate, as a leasing power, but to take effect after the determination of his own estate, and, therefore, in gross, might be extinguished such a grantee...could deal with the estate in respect of his free--hold interest, and, his dealing with the estate so as to create interests inconsistent with the exercise of his power must extinguish his power, upon the general principle that a person is not permitted to defeat his own grant;' in other words; as it was in his option to exercise the power or not, any dealing with the estate by him inconsistent with its exercise, mast be taken to determine his option on the doctrine of approbate and reprobate. This was followed by Sir Thomas Plumer, M.R., as settled law in Horner v. Swann (1823) T. & R. 430 : 24 R.R. 92 : 37 E.R. 1116,(see also Chance on Powers, Volume 2, page 590, and supplement page 110), The principle that all powers, other than colcteral powers or other than those coupled with a trust or duty, can be suspended or destroyed, either wholly or in part, by the donee thereof, and that any dealing with an estate by the donee of a power inconsistent with the exercise of that power, releases it either wholly or protanto, is now firmly settled, and has been applied and recognised in a long line of cases, many of them subsequent to those mentioned by Lord St Laonards, for instance, by Romilly, M.R. in Hurst v. Hurst (1852) 16 Beav. 372 : 22 L.J. Ch. 538 : 1 W.R. 105 : 51 E.R. 822 : 96 R.R. 179, by Wood, V.C., in Davies v. Huguenin (1863) 1 H. & M. 730 : 32 L.J. Ch. 417 : 2 N.R. 101 : 8 L.T. (N.S.) 443 : 11 W.R. 1040 : 71 E.R. 320 : 136 R.R. 319, by James V.C., in Isaac v. Hughes (1870) 9 Eq. 191 : 39 L.J. Ch. 379 : 22 L.T. 11, by Lord Tenterden, C.J., in Doed. Wigan v. Jones (1830) 10 B. & C. 459 : 5 Man & Ry. 563 : 8 L.J.K.B.(O.S) 214 : 139 E.R. 521 : 34 R.R. 485, by Plunket, L.C., in Piers v. Tuite (1838) 1 Dr. & wal. 279 at p. 302 : 56 R.R. 168, by Sugden, L.C., in Green v. Green (1845) 2 Jo. & Lat. 529 : 8 Ir. Eq. R. 473 : 69 R.R. 364, and by Smith, M.R., in Chambers, In re (1847) 11 Ir. Eq. Rep. 518. Amongst still more modern decisions, the most instructive are Hancock, In re, Malcolm v. Burford-Hancock (1896) 2 Ch. 173 : 65 L.J. Ch. 690 : 74 L.T. 658 : 44 W.R. 545. Foakes v. Jackson (1900) 1 Ch. 807 : 69 L.J. Ch. 352 : 48 W.R. 616 : 83 L.T. 26. Nottidge v. Dering (1909) 2 Ch. 647 : 101 L.T. 491 affirmed on Appeal (1910) 1 Ch. 297 : 79 L.J. Ch. 439 : 102 L.T. 145. Evered, In re, Molineux v. Evered (1910) 2 Ch. 147 : 79 L.J. Ch. 465 : 102 L.T. 694 : 54 S.J. 540. Sugden, In re, Sugden v. Walker (1917) 2 Ch. 92 : 86 L.J. Ch. 447 : 117 L.T. 49. In the first of these cases Hancock, In re, Malcolm v. Burford-Hancock (1896) 2 Ch. 173 : 65 L.J. Ch. 690 : 74 L.T. 658 : 44 W.R. 545. Lindley, L.J., approved the proposition that 'any dealing with the estate by the donee of a power, in-consistent with the exercise of the power, must put an end to it,' and this was adopted by Farwell, J., in the second case Foakes v. Jackson (1900) 1 Ch. 807 : 69 L.J. Ch. 352 : 48 W.R. 616 : 83 L.T. 26. In the third case, Nottidge v. Dering (1909) 2 Ch. 647 : 101 L.T. 491 affirmed on Appeal (1910) 1 Ch. 297 : 79 L.J. Ch. 439 : 102 L.T. 145, it was pointed out by Cozens-Hardy, M.R., and Fletcher-Moulton and Buckley, L. JJ., that this view was in accord with the decision of the House of Lords in Scrope v. Offley (1736) 1 Brown P.C. 276 1 E.R. 565, to the effect that if before the exercise of the power there has been executed by the donee of the power a grant or covenant dealing with the property which is subject to the power, the donee cannot subsequently so exercise the power as to derogate from his grant or to act in breach of his covenant; that the grant or covenant in such case is, pro tanto, in favour of the grantee, a release of the power. This proposition was re affirmed in Evered In re, Molineux v. Evered (1910) 2 Ch. 147 : 79 L.J. Ch. 465 : 102 L.T. 694 : 54 S.J. 540, where the Court of Appeal ruled that any power act purporting to been exercise of the which will defect a prior dealing with the estate by the donee of the power will be an invalid exercise of the power to the extent that such act would be defeated, though the Court proceeded to express its dissent from the view taken in Davies v. Huguenin (1863) 1 H. & M. 730 : 32 L.J. Ch. 417 : 2 N.R. 101 : 8 L.T. (N.S.) 443 : 11 W.R. 1040 : 71 E.R. 320 : 136 R.R. 319, that a power exercisable by Will only could be exercised by deed. This is' a point with which we are not concerned here; but it is worthy of note that Cozens-Hardy, M. R, in his judgment treated a release of a power and a covenant not to exercise the power as having the same effect. The principle that the dealing with the estate by the donee of the power, so as to create interests inconsistent with the exercise of his power must extinguish his power, was also recognised by the Judicial Committee in Spencer v. Registrar of Titles (1906) App. Cas. 503 : 75 L.J.P.C. 100 : 95 L.T. 316. It may be observed here in passing that questions of considerable nicety may arise, on the construction of a power given in a particular case, whether the dealing with the estate by the donee has led to the creation of such interests as are really inconsistent, wholly or partially, with the exercise of the power, Long v. Rankin (1822) Sugden on powers, 8th Ed. 895, Warburton v. Farn (1849) 16 Sm. 625 : 18 L.J. Ch. 312 : 13 Jur. 528 : 60 E.R. 1016 : 80 R.R. 167. Alexander v. Mills (1871) 6 Ch. App. 122 at p. 134 : 24 L.T. 206 : 40 L.J. Ch. 73 : 19 W.R. 340. Hardaker v. Moorehouse (1884) 26 Ch. D. 417 at p. 421 : 53 L.J. Ch. 713 : 50 L.T. 554 : 32 W.R. 638. Sugden in re, Sugden v. Walker (1917) 2 Ch. 92 : 86 L.J. Ch. 447 : 117 L.T. 49.

6 The principle expounded and illustrated above has been extensively applied in the Courts of the United States, where it has been ruled, as consonant with principles of fair dealing and common sense, that any dealing with the estate by the donee of the power, inconsistent with its exercise, by which the rights of others are affected, puts an end to the power ; and it has sometimes been said that the act of the donee should have the effect of an estoppel and should in good faith preclude him from exercising his power to the detriment of others who have derived title from him. On this ground, it has been held that a life tenant, with power of disposal, who mortgages the fees by an instrument with covenants of warranty, cannot be permitted to exercise his power to the injury of the mortgagee. It necessarily follows that, where a donee alienates the property over which the power exists, and the power can still be exercised without derogating from his grant, there is no estoppel. Similarly, in the case of a power of sale over lands, the execution of the power as to part of the lands does not extinguish the power, and it may subsequently be executed as to the balance of the lands. It will be observed that the rule is here rested on the ground of estoppel, and in a recent case, Langley v. Conlan (1912) 212 Mass. 135, (where a donee of a general power to devise real estate made a conveyance in mortgage with covenants of warranty and received for his own use the consideration of the mortgage) Rugg, C.J., held that he was estopped from subsequently exercising the power to the prejudice of the mortgagee. This may be contrasted with the ground assigned by Sir John Leach V.C., in Smith v. Death (1820) 5 Madd. 371 : 21 R.R. 314 : 56 E.R. 937, namely, that a person is not permitted to defeat his own grant, and that basis was adopted by Nunn, J., in Columbia Trust Co. v. Christopher (1909) 133 Ky. 348 : 117 S.W. 943, and Cartwright, C.J., in McFall v. Kirkpatrick (1908) 236 III 281 at p. 297 : 86 N.E. 139. It is plain that if the rule be formulated that the donee of a power may estop himself from the voluntary exercise thereof, some limitation must obviously be framed, and, on the whole, it seems sounder to base the rule on the ground that no one is permitted to defeat or derogate from his own grant. That principle, as we know, is of very wide application, and lies at the root of the doctrine that the grantor of land to be used for a particular purpose is under an obligation to abstain from doing anything on adjoining property belonging to him which would prevent the land granted from being used for the purpose for which the grant was made: Aldin v. Latimer Clark Muirhead & Co., (1894) 2 Ch. 427 at p. 446 : 63 L.J. Ch. 601 : 8 R. 352 : 71 L.T. 119 : 42 W.R. 453, Cable v. Bryant (1908) 1 Ch. 259 : 77 L.J. Ch. 78 : 98 L.T. 98. Browne v. Flower (1911) 1 Ch. 219 : 80 L.J. Ch. 181 : 103 L.T. 557 : 55 S.J. 108. Schwann v. Cotton (1916) 2 Ch. 459 : 85 L.J. Ch. 689 : 115 L.T. 168 : 60 S.J. 654. Derry v. Sanders (1918) 35 T.L.R. 105 : 63 S.J. 115, Siddons v. Short (1877) 2 C.P.D. 572 : 46 L.J.C.P. 795 : 37 L.T. 230. Saint v. Pilley (1875) 10 Ex. 137 : 44 L.J. Ex. 33 : 33 L.T. 93 : 23 W.R. 753, and Grosvenor Hotel Co. v. Hamilton (1894) 2 Q.B. 836 : 63 L.J.Q.B. 661 : 71 L.T. 362 : 42 W.R. 626 : 9 R. 819.

7 Tested in the light of these principles, the claim put forward by the plaintiff on the basis of surrender proves to be without solid foundation. The tenants transferred a portion of their holding to the defendant for consideration on the 17th December 1915. That conveyance recited what is implied in all transfers, namely, that the transferors would do nothing to injure the interest conveyed, and further stated that the purchaser would remain in possession from generation to generation. Notwithstanding this, the transferors proceeded to surrender the holding to their landlord, In such circumstances, the view may legitimately be maintained that the transfer in favour of the defendant disentitled the transferors to exercise to his detriment their power of surrender. The alienation operated in equity to destroy that power, since it would be a fraud on the alienee if the transferors could thereafter, by exercising the power optional with them, derogate from their own grant; it would be manifestly inconsistent with rudimentary principles of fair dealing and honesty to hold that they could be permitted to exercise the power so as to imperil and ultimately destroy the interest they had conveyed. If X holds as tenant under A, so long as they are the only persons interested in the tenancy, they may, by mutual agreement, supersede the contract and substitute therefor a new engagement in respect of a part only of the land to be held at a smaller amount of rent than before. But where X has transferred a portion of his interest to Y a similar course is impossible, except with the concurrence of all the three persons interested; X cannot in fairness be permitted to exercise his power of surrender in favour of A, for his own benefit so as to enable himself to make a new tenancy of the lands retained by him and to the detriment of his transferee Y who would thereby be exposed to attack by A. It follows, accordingly, that as, after the conveyance, the power to surrender could no longer be validly exercised the plaintiff--landlord, has not, by its infructuous exercise, acquired a title to eject the defendant. It is satisfactory to find that this conclusion, which accords with the manifest justice of the case, can be baaed on broad general principle. In this connection, we may usefully recall the important fact pointed out in the Full Bench case of Kripa Sindhu v. Annada Sundari Debi 35 C. 34 : 11 C.W.N. 983(F.B.) : 6 C.L.J. 273, that the Bengal Tenancy Act does not purport to be a complete Code even in respect of the law of landlord and tenant, much less does it profess to incorporate the general principles of the law of contract and the doctrines of equity jurisprudence, in so far as they may have to be applied in the determination of disputes between landlords and tenants.

8 Our conclusion is, that the question referred to the Full Bench should be answered in the negative, and that an occupancy raiyat who has transferred part of his nontransferable holding is not competent to surrender to his landlord the portion so transferred either by surrender of that portion alone or by surrender of the whole inclusive of such portion.

9 The result is, that the decree made by the Subordinate Judge is affirmed and this appeal dismissed with costs of the hearings before the Full Bench and the Division Bench.

Fletcher, J.

10. I agree.

Chetterjea, J.

11. I agree.

Teunon, J.

12. I agree.

Richardson, J.

13. I agree.


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