vil Appeal No 2347 of 1966
Appeal from the judgment and decree dated June 3 1966 of the Calcutta High Court in Appeal No 251 of 1965
MC Chagla and SN Mukherjee for the appellant
section V Gupte MG Poddar and DN Mukherjee for the respondent
Clause 3c of the deed provided for a renewal of the lease and was in the following terms  3 c
The lessor will on the written request of the lessees made two calendar months before the expiry of the term hereby created and if there shall not at the time of such request be any existing breach or non observance of any of the covenants on the part of the lessees hereinabove contained grant to it one renewal of 10 years from the expiry of the said term at the same rent and containing the like convenants and provisos as are herein contained except that as regards the clause for renewal for further period the rent shall be as may be agreed between the lessor and the lessees
 On December 1 1963 the time fixed for applying for the renewal of the lease expired
On December 13 the appellant made a written request for the renewal
On December 23 1963 the respondent s solicitors replied stating that the request being out of time was ineffective and asking the appellant to vacate the land on the expiry of the lease
The appellant had erected structures on the land for the purpose of running a petrol delivery station and was a Thika tenant within the meaning of the Calcutta Thika Tenancy Act 1949
In February 1964 the respondent filed an application before the Controller asking for eviction of 240 the appellant under sections 3vi and 5 of the Calcutta Thika Tenancy Act
The Controller allowed the application
An appeal from this order was dismissed by the appellate Authority
A revision petition against the order was dismissed by the High Court
While dismissing the revision petition the High Court stayed the execution of the order of eviction for a month and observed that the authorities under the Calcutta Thika Tenancy Act had no power to decide whether the appellant was entitled to a renewal of the lease
Thereafter the appellant filed the present suit on the Original Side of the Calcutta High Court asking for a declaration that it was entitled to a renewal of the lease specific performance of the covenant for renewal an injunction restraining execution of the order of eviction passed by the Controller and for other reliefs
In paragraphs 13 and 14 of the plaint the appellant alleged that the delay in giving notice of renewal should be excused in view of the following special circumstances a the delay was due to oversight b the respondent had not altered her position for the worse or to her detriment within the space of 12 days c neither party had treated the matter of time as being as the essence of the transaction d the appellant had constructed a service station for petroleum products of immense utility to the public of the locality e the appellant was in possession of the land
The respondent contended that the application for renewal being made out of time was ineffective and that there was no ground for excusing the delay
SP Mitra J accepted the respondent s contention and dismissed the suit
An appeal under clause 15 of the Letters Patent was dismissed by a Divisional Bench of the High Court
Both the courts concurrently held that the letter dated December 13 1963 was not a proper exercise of the option by the appellant under the lease dated February 17 1954 and that there were no special circumstances for excusing the delay in giving the notice
The appellant has filed the present appeal after obtaining a certificate from the High Court under article 133  1  a and b of the Constitution
The appellant neglected to make the application for renewal of the lease within the stipulated time
Mr Chagla has submitted that the time is not of the essence of the contract having regard to sec
55 of the Indian Contract Act 1877 as interpreted in the case of Jamshed Khodaram Irani vs Durjorji Dhunjibhai1
Section 55 of the Indian Contract Act provides that when a party to a contract promises to do a certain thing at or before a specified time or certain things at or before specified time and fails to do any such thing at or before the specified time the contract or so much of it as has not been performed becomes voidable at the option of the promisee if the intention of the 1 LR 43 IA 26
241 parties was that time should be of the essence of the contract
 In Jemshed s case1 Viscount Haldane observed that the section did not lay down any principle as regards contracts to sell land in India different from those which obtained under the law of England
It is well known that in the exercise of its jurisdiction to decree specific performance of contracts the Court of Chancery adopted the rule especially in the case of contracts for the sale of land that stipulations as to time were not to be regarded as of the essence of the contract unless they were made so by express terms or unless a clear indication of a contrary intention appeared from the nature of the contract or the surrounding circumstances
In his well considered judgment Viscount Haldane carefully refrained from saying that time was not to be regarded as of the essence in all contracts relating to land
At common law stipulations as to time in a contract giving an option for renewal of a lease of land were considered to be of the essence of the contract even if they were not expressed to be so and were construed as conditions precedent
Equity followed the common law rule in respect of such contracts and did not regard the stipulation as to time as not of the essence of the bargain
As stated in Halsbury s Laws of England 3rd ed vol 3 article 281 p 165 An option for the renewal of a lease or for the purchase or re purchase of property must in all cases be exercised strictly within the time limited for the purpose otherwise it will lapse
 This passage was quoted with approval by Danckwerts LJ in Hare vs Nicoll2
A similar statement of law is to be found in Foa s General Law of Landlord and Tenant 8th article 453 p 310 and in Hill and Redman s Law of Landlord and Tenant 14th ed p 54
The reason is that a renewal of a lease is a privilege and if the tenant wishes to claim the privilege he must do so strictly within the time limited for the purpose
With regard to equitable relief against the failure of the tenant to give notice of renewal within the stipulated time
the law is accurately stated in Halsbury s Laws of England 3rd ed
vol 23 p 626 article 1329 footnote u thus  Relief will not be given in equity against failure to give notice in time save under special circumstances
The decided cases show that in such cases relief is not given in equity save upon the ground of unavoidable accident fraud surprise ignorance not wilful or inequitable conduct on the part of the lessor precluding him from refusing to give the renewal
The limits of the equitable interference in such cases were clearly stated by the Master of the Rolls Sir RPArden in Eaton vs Lyon3 He observed  At law a covenant must be strictly and literally performed in equity it must be really and substantially 1 LR43 IA26 2 145
3   692 3695 6 30 ER 1223 12241225 6 242 performed according to the true intent and meaning of the parties so far as circumstances will admit but if unavoidable accident if by fraud by surprise or ignorance not wilful parties may have been prevented from executing it literally a Court of Equity will interfere and upon compensation bei ng made the party having done everything in his power and being prevented by means I have alluded to will give relief 
I decide this case upon the principles on which Lord Thurlow decided Bayley vs The Corporation of Leominster  and I hope now it will be known that it is expected these covenants shall be literally performed where it can be done and that Equity will interpose and go beyond the stipulations of the covenant at law only where a literal performance has been prevented by the means I have mentioned and no injury is done to the lessor  We are of the opinion that the stipulation as to time in clause 3 c of the indenture of lease dated February 17 1954 should be regarded as of the essence of the contract
 The appellant not having exercised the option of renewal within the time limited by the clause is not entitled to a renewal
The appellant claims relief against the consequences of its default on the grounds enumerated in paragraphs 13 and 14 of the plaint
Grounds b and e cannot be regarded as special circumstances
to ground d it is
not shown that the service station is of immense public utility
The fact that the appellant constructed a service station is an irrelevant consideration
Ground c is not established and it is not shown that the time is not of the essence of the bargain
As to ground a there is some evidence to show that the delay in giving the notice of renewal was due to oversight
But it is not shown that the delay was due to any unavoidable accident excusable ignorance fraud or surprise
The delay arose from mere neglect on the part of the appellant and could have been avoided by reasonable diligence
As observed by the Master of the Rolls in Reid  Anr
vs Grave  Others1 The rule is now well established that no accident will entitle a party to renew unless it be unavoidable
I am of opinion that nothing but accident which could not have been avoided by reasonable diligence will entitle the plaintiff to a renewal in this Court
 We may add that where no time is fixed for the purpose an application for renewal for the lease may be made within a reasonable time before the expiry of the term see Foa s General Law of Landlord  Tenant 8th ed article 455 pp
311 12 Ram Lal 1  248
243 Dubey vs Secretary of State for India 1 Maharani Hemanta Kumari Devi vs Safatulla Biswas  Ors2
In the present case the lease fixes a time within which the application for renewal is to be made
The time so fixed is of the essence of the bargain
The tenant loses his right unless he makes the application within the stipulated time
Equity will not relieve the tenant from the consequences of his own neglect which could well be avoided with reasonable diligence
The appeal is dismissed with costs
YP Appeal dismissed


Summary:
The respondent leased to the appellant a plot of land for a certain period and stipulated in the lease deed that the appellant would give notice of renewal of the lease within a certain time
The appellant made the request for renewal of the lease 12 days after the time fixed
The respondent asked the appellant to vacate the premises stating that the request being made out of time was ineffective
The appellant flied a suit for a declaration that he was entitled to the renewal and stated that the delay in making the request he excused as a it was due to oversight b the respondent had not altered her position for the worse or to her detriment within the space of 12 days c neither party had treated the matter of time as being as the essence of the transaction d the appellant had constructed a service station for petroleum products of immense utility to the public of the locality and e the appellant was in possession of the land
The Court dismissed the suit and this decision was affirmed in appeal
Dismissing the appeal this Court 
HELD The lease fixed a time within which the application for renewal was to be made
The time so fixed was of essence of the bargain
The tenant lost his right unless he made the application within the stipulated time
Equity will not relieve the tenant from the consequences of his own neglect which could well be avoided with reasonable diligence
At common law stipulations as to time in a contract giving an option for renewal of a lease of land were considered to be of the essence of the contract even if they were not expressed to be so and were construed conditions precedent
Equity followed the common law rule in respect of such contracts and did not regard the stipulation as to time as not of the essence of the bargain the reason being that a renewal of a lease is a privilege and if the tenant wishes to claim the privilege he must do so strictly within the time limited for the purpose
241 D E With regard to equitable relief against a failure of the tenant to give notice of renewal within the stipulated time the relief cannot be given in equity save under special circumstances such as unavoidable accident fraud surprise ignorance not wilful or inequitable conduct on the part of the lessor precluding him refusing to give the renewal
241 F Grounds b and e stated for the delay could not be regarded as special circumstances
As to ground d it was not shown that the service station was of immense public utility
The fact that the appellant constructed a service station was an irrelevant consideration
Ground c was not established and it was not shown that the time was not the essence of the bargain
As to ground a there was some evidence to show that the delay in giving the notice of renewal was due to oversight
But it was not shown that the delay was due to any unavoidable 239 accident excusable ignorance fraud or surprise
The delay arose from mere neglect on the part of the appellant and could have been avoided by reasonable diligence
242 E Jamshed Khodaram Irani vs Durjorji Dhunjibhai LR 43 IA 26 PIrate vs Nicoll  145 Eaton vs Lyon  692 Reid  Anr
vs Grave  Ors  248 Ram Lal Dubey vs Secretary of State for India 39 CLJ 314 and Maharani Hemanta Kumari Devi vs Safatulla Biswas  Ors  referred to