Appeal No 4 of 1950
Appeal from the High Court of Judicature of Calcutta Sir Trevor Harries CJ and Mukherjea J from a judgment and decree dated May 30 1948 in Appeal No 21 of 1947 confirming with modifications the decree of a single Judge of the same High Court Ormond J dated January 24 1947 in suit No 1031 of 1945
108 842 NCCatterjee Samarendra Nath Mukherje with him for the appellant
PL Banerjee Upendra Chandra Mullick with him for the respondent 1950
December 1
The Judgment of the Court was deliv ered by DAS J
This is an appeal by the defendant in a suit for specific performance against the judgment and decree of the High Court of Judicature at Fort William in Bengal Sir Trevor Hatties CJ and Mukherjea J dated May 30 1948 dismissing his appeal and confirming with certain modifica tions the judgment and decree for specific performance passed by Ormond J on January 24 1947
There is no sub stantial dispute as to the facts leading up to tim suit out of which the present appeal has arisen and they may shortly be stated Maharaja Sris Chandra Nandy of Cossimbazar is the owner of premises No 374 Upper Chitpur Road in the town of Cal cutta hereinafter referred to as the said premises
By an Indenture of lease made on April 27 1931 the Maharaja as manager of the Cossimbazar Raj Wards Estate which was then under the management of the Court of Wards demised tim said premises to one Madan Gopal Daga for a term of 51 years commencing from May 1 1931 at and for the monthly rent of Rs 1083 5 3 and upon terms and conditions contained there in
By sub clause 6 of clause 2 of the said Indenture the lessee covenanted amongst other things not to assign the demised premises or any part thereof without first obtaining the written consent of the lessor such consent however not to be unreasonably withheld in the case of respectable or responsible person    There was the usual proviso for re entry for non payment of rent for three months or for breach of any of the lessee s covenants without prejudice to the lessor s right of action for such breach
On March 25 1943 Madan Gopal Daga with the written consent of the lessor assigned the unexpired resi due of the lease to the defendant who 843 was accepted as the lessee by the lessor
By an agreement said to have been arrived at by correspondence exchanged between the plaintiff and the defendant and their respective solicitors between January 27 1945 and February 2 1945 the defendant is alleged to have agreed to assign the said lease to the plaintiff for the unexpired residue of the term with effect from February 1 1945 at and for the price of Rs 180000 and upon terms and conditions contained in the correspondence to which reference will be made in greater detail hereafter
On February 21 1945 the defendant wrote a letter to the lessor intimating that he had agreed to assign his interest in the lease to the plaintiff and re questing the lessor to give his consent in writing to such assignment
On March 5 1945 the lessor replied that the question of his giving consent to the transfer of the lease could not be entertained as he had already determined the lease and that in the circumstances the whole initiative was in the hands of the defendant
This letter clearly indicated that the lease had been determined for non payment of rents and it obviously implied that it was for the defendant to get the lease revived by paying up the arrears of rent so that the question of giving consent to an assignment of the lease might be considered by the lessor
On March 8 1945 the defendant by his solicitors  letter informed the plain tiff s solicitors that the defendant had approached the lessor but had failed to secure his consent and that as no valid transfer could be made without such consent and the agreement for sale was subject to such consent being ob tained the defendant was reluctantly compelled to cancel the agreement
The plaintiff by his solicitors  letter of March 10 1945 maintained that the agreement was not sub ject to the alleged condition and that the defendant was not entitled to cancel the agreement
It was pointed out that under the terms of the lease the lessor could not refuse his consent to the transfer of the lease to a respectable or responsible person which the plaintiff undoubtedly was
It is not necessary to refer to the further correspondence that followed in which each 844 party maintained his own contention
On March 17 1945 the lessor filed a suit being suit No 425 of 1945 in the High Court against the defendant for the recovery of the demised premises on the ground that the lease had been determined
It was during the pendency of that suit that on July 4 1945 the suit for specific performance of the agreement to assign the lease out of which the present appeal has arisen was filed by the plaintiff against the defendant
On July 13 1945 the lessor s suit for ejectment was settled by the defendant consenting to a decree for Rs 59213 11 0 for arrears of rent which was paid up
There is no dispute that the forfeiture of the lease for non payment of rent was waived and the lease was accordingly revived
Shortly after the settlement of the ejectment suit the defendant on August 6 1945 applied to the lessor for his consent to the assignment of the lease and on the same day the lessor in reply declined to give his consent without assigning any reason whatever
The suit for specific per formance came up for disposal before Ormond J in November 1946 when it was heard in part and was adjourned
It was eventually further heard in January 1947 and finally dis posed of on January 23 1947 when Ormond J passed a decree against the defendant for specific performance of the agree ment
The decree provided that in the event of the defend ant being unable within a fortnight from the date of the decree to obtain the written consent of the lessor the assignment should be made without such consent
The defend ant appealed
After two days  hearing in order to clear up the matter the appeal Court gave the plaintiff an opportu nity to examine the Maharaja as a witness in this case so that all relevant facts might be brought out and placed before the Court for the purpose of enabling it to come to a proper decision on this point
 The appeal was accordingly adjourned and the lessor was examined on commission and his evidence was filed in the proceedings
After further hear ing the appeal Court dismissed the defendant s appeal and confirmed the decree for specific performance of the agree ment 845 without the need for obtaining the consent of the lessor prior to the execution of the deed of assignment in favour of the plaintiff
This decree was subsequently amended by inserting therein a provision enabling the plaintiff to set off from the purchase price the amount of rent payable as and from February 1 1945 until the date of conveyance less all outgoings and interest on the purchase price at four per cent
per annum from that date to the date of the convey ance
The defendant has now come up before us in appeal from this judgment and decree of the appeal Court
The first point urged by learned counsel appearing in support of this appeal is that being subject to the consent of the lessor the agreement was contingent on the defendant obtaining such consent and as the defendant could not secure the lessor s consent no effective agreement came into being which could be ordered to be specifically performed
The determination of this question must depend on a correct analysis and ascertainment of the meaning and import of the correspondence by which the agreement is said to have been arrived at
It was on January 97 1945 that the plaintiff offered to purchase the defendant s leasehold interest in the said premises upon terms and conditions set forth in the plaintiff s letter of that date
Clauses 3 and 4 of those terms were as follows 3
The lease will be transferred in my favour as from the 1st February 1945 and I shall be entitled to recover rents from the tenants as from that date and shall pay the rent to the superior landlord and municipal taxes from that date
You shall have to obtain the necessary consent for the transfer of the lease in favour of myself or my nominees from the said Maharaja of Cossimbazar before the execution of the transfer of lease in my favour   The defendant replied to the plaintiff s above letter on January 28 1945
By this reply the defendant expressed his willingness to transfer the lease to the plaintiff on terms contained therein
Clauses 3 and 4 of this letter were as follows 846 3 If your final acceptance as stated above is re ceived within 30th January current and if I am able to obtain the consent of Maharaja Cossimbazar for transfer of the leasehold interest wi
thin the first week of February 1945 I agree to your para 3
4 Your para 4 is agreed to but the name or names of the persons to be mentioned in the sale deed for whom per mission is to be taken from Maharaja Cossimbazar should be clearly stated with their respective addresses
 It is quite clear that no agreement was concluded by these two letters for the defendant s letter was not an unconditional acceptance of the plaintiff s offer but amounted in law to only a counter offer
By clause 3 the defendant offered to transfer the lease to the plaintiff as from February 1 1945 so as to entitle the plaintiff to realize the rents from that date and to be liable to pay the rent to the lessor also from that date on two conditions namely that the plaintiff s acceptance was received within January 30 1945 and the defendant was able to obtain the lessor s consent within the first week of February 1945
This clause did not make the offer itself contingent on the obtaining of the lessor s consent but made one of the terms of the offer namely that the lease would be transferred as from February 1 1945 conditional on the obtaining of the lessor s consent within the first week of February 1945
Likewise subject to the name of the assignee being clearly stated the defendant by clause 4 offered to obtain the lessor s consent to the assignment of the lease
Clause 4 of the defendant s letter was not so expressed as to make the defendant s offer contingent on his obtaining the les sor s consent
On the contrary clause 4 constituted one of the terms of the offer which on the offer being accepted would become binding on the defendant as one of the terms of the agreement
The plaintiff however does not appear to have accepted the defendant s counter offer but on January 29 1945 through his solicitors made a fresh offer to purchase the defendant s leasehold interest at Rs 180000 on the following terms 847 a That the earnest money will be Rs 5000 Rupees five thousand instead of Rs 30000
b Our client will have the conveyance in his own favour
The consent of the landlord will be obtained by you before the completion of sale
c That your client will complete the conveyance within a month after the receipt by us of all the original title deeds with you
d That the transfer of the property in favour of our client will take effect on and from the 1st February 1945 irrespective of the date of the conveyance he being enti tled to all the rents issues and profits and being liable for all the liabilities in respect thereof since the said date
e That our client will not be liable to pay your Solici tor s Bill of cost in respect of the sale
 Again it will be noticed that by clause b the offer was not made contingent on the obtaining of the lessor s consent but the plaintiff insisted on the defendant s obtaining such consent as a substantive term of his offer so that if the offer by being accepted ripened into an agree ment the defendant would be bound to obtain the lessor s consent as a term of such agreement
The defendant by his solicitors  letter dated February 1 1945 purported to accept the plaintiff s last offer with a slight reservation namely  As regards clause d of your said letter it is dis tinctly understood that the same should be given effect to only in case the conveyance is completed in terms of clause c of your said letter
 On February 2 1945 the plaintiff by his solicitors  letter of that date unconditionally accepted this reserva tion and so a concluded agreement was arrived at between the parties
This agreement was not for its coming into being contingent or conditional on the obtaining of the lessor s consent
The obligation to obtain the lessor s consent was cast upon the defendant as a term of the agreement
In our judgment the Court below was right in holding that the agreement 848 itself was not contingent as contended for by the appellant
The contentions next advanced by learned counsel for the appellant relate to the lessee s covenant contained in sub clause 6 of clause 2 of the lease to which reference has already been made
The legal incidents of such a covenant are now well established by judicial decisions referred to in the judgment of the High Court and it is not necessary to refer to them in detail
Suffice it to say that the words such consent however not to be unreasonably withheld in the case of respectable or responsible person contained in the covenant do not amount to a separate or independent covenant by the lessor that he would not refuse consent except upon reasonable grounds in the case of respectable or responsible person but that those words limit or qualify the lessee s covenant not to assign the demised premises without the consent in writing of the lessor
In other words those words have the effect of relieving the lessee from the burden of this covenant if the lessor withholds his consent unreasonably in case of proposed assignment to a respectable or responsible person
In this view of the matter the plaintiff contended that he being a respectable and responsible person the lessor had unreasonably withheld his consent to the proposed assignment to him and had consequently relieved the defendant from the burden of his covenant so that the defendant could legally and validly assign the lease to him without such consent of the lessor
The first objection taken by the appellant to this contention of the plaintiff is that in his plaint the plain tiff insisted on the defendant obtaining the lessor s consent and that he should not have been permitted to make this new case at the hearing
Both the trial Court and the appeal Court held that there was strictly speaking no element of surprise particularly because the plaintiff relied upon facts admitted and proved by the defendant himself and that it was open to him to take this point
We may also add that this point was in a manner indicated in the plaint 849 itself for in paragraph 11 thereof it was pleaded that the plaintiff was a responsible and respectable person and that if consent to assign in his favour was withdrawn such with drawal would be unreasonable and would not be valid and binding
In view of such pleading we are unable to say that the point raised by the plaintiff at the trial was an en tirely new point or that the defendant was taken by sur prise
The next objection of the appellant was that this point should not have been allowed to be raised and no evidence should have been permitted to be adduced on this point in the absence of the lessor as a party to the suit
We do not think that there is any force in this objection
The Court had to decide whether it was a case where relief by way of specific performance should be given
The Court could not force the defendant to apply to the lessor for his consent nor could the Court force the lessor to give his consent and if the matter only depended on the consent the Court would not have ordinarily in those circumstances directed the agreement for assignment to be specifically enforced
The Court therefore had also to consider for the purposes of this case as to whether the circumstances were such as would indicate that the defendant had been relieved of the burden of his covenant by reason of the lessor having unrea sonably withheld his consent
It is true that a decision on that question in this suit would not be binding on the lessor but nevertheless the Court had to come to a decision on that question for the purposes of this suit as between the parties thereto in order to award the relief of specific performance to the plaintiff
The third objection of the appellant is that the appeal Court should not have allowed the plaintiff to adduce fur ther evidence
It will be recalled that the appeal Court directed the evidence of the Maharaja of Cossimbazar to be taken during the hearing of the appeal
The judgment of the appeal Court clearly indicates that it was the appeal Court that required the evidence in order to clear up the matter and 109 850 for the purpose of enabling it to come to a proper decision on this point 
The matter therefore is fully covered by Order XLI rule 27 of the Code of Civil Procedure and no objection can be taken to the course adopted by the appeal Court on that ground
We do not think there is any reason to interfere in the exercise of the Court s discretion
The fourth objection is that the High Court was wrong in holding that the term in the agreement that the defendant must obtain the consent of the lessor before executing the assignment to the plaintiff was a term for the benefit of the plaintiff only
It will be recalled that that was a term which was introduced by the plaintiff in his offer that eventually ripened into an agreement
The term was not expressed in a manner indicating that it was inserted in the agreement for the protection of the defendant
In other words the objection that the consent of the lessor had not been obtained was one which could be availed of by the plaintiff who could rescind the contract and claim damages for the breach thereof
We cannot see how in view of the language used in the correspondence the defendant could plead the absence of the lessor s consent as relieving him from the obligation of performing his part of the agreement if the plaintiff waived the objection and insisted on his carrying out the agreement
The absence of consent may amount to a defect in the title of the defendant but which the plaintiff was willing to accept
Finally it is said that by directing the specific per formance of the agreement the Court has exposed the defend ant to the risk of an action for damages for breach of covenant
If the assignment of the lease by the defendant to the plaintiff without the lessor s consent amounted to a breach of covenant the lessor could forfeit the lease and sue for possession
Such a course would affect only the plaintiff but not the defendant for he had already parted with the lease for valuable consideration
It is said that the lessor could sue the defendant for damages for breach of that 851 covenant and the Court should not by decreeing specific performance have put the defendant in that perilous posi tion There appear to us to be two answers to this argu ment namely 1 that the defendant should have by proper language made his obligation to transfer dependent or conditional upon his being able to obtain the lessor s consent which he did not do and 2 that the plaintiff being a respectable and responsible person of means the measure of damages could only be a problematic conjecture
Indeed it may have been precisely for this very consideration that the defendant had unconditionally agreed to obtain the consent of the lessor and to assign his interest in the lease
That the plaintiff was a respectable and responsible person cannot on the evidence before the Court be denied or disputed and indeed learned counsel for the appellant did not so contend
We find ourselves in agreement with the High Court that in the circumstances and on the evidence on record the lessor had unreasonably withheld his consent so as to enable the defendant to assign the lease without such consent
In the circumstances we are satisfied that both the trial Court and the appeal Court exercised their discre tion properly and no ground has been made out for our inter fering with the judgment of the High Court
The appeal is accordingly dismissed
The appellant to pay the costs of this appeal
Appeal dismissed


Summary:
The defendant had obtained certain premises on lease under a deed which contained a covenant by the lessee not to assign the demised premises or any part thereof without first obtaining the written consent of the lessor such consent however not to be unreasonably withheld in the ease of respectable or responsible person 
After some offers and counter offers the plaintiff finally made an offer to purchase the defendant s leasehold interest on certain terms one of which was that the consent of the landlord will be obtained by you before the completion of the sale  and the offer was unconditionally accepted by the defendant
The defendant subsequently refused to assign on the ground that the lessor had withheld his consent and the plaintiff sued for specific performance of the agree ment Held i that the agreement was not for its coming into being conditional or contingent on the obtaining of the lessor s consent the obligation to obtain the lessor s consent being only a term of the agreement which the defend ant had to fulfil ii the words such consent however not to be unreasonably withheld in the case of a respectable or responsible person in the leasedeed did not amount to a separate or independent covenant by the lessor that he would not refuse consent except on reasonable grounds in the case of a respectable or responsible person but only limited or qualified the leesee s covenant not to assign with
out the lessor s consent by relieving him from the burden of the covenant if the lessor withheld his consent unreasonably in the case of proposed assignment to a respectable or respon sible person  iii that as the plaintiff was admittedly a respectable and responsible person and on the facts of the case the lessor s refusal to give consent was unreasonable the defendant could validly assign the lease without such consent iv that the court could come to a decision on this matter even though the lessor was not a party to the suit and the decision might not bind him v that the defendant could not under these circumstances plead the absence of the lessor s consent as relieving him from the obligation to perform his part of the agreement if the plaintiff insisted on his carrying out the agreement even though the lessor had not given his consent and the plain tiff was therefore entitled to a decree for specifie per formance of the agreement