Case: Sivayogeswara Cotton Press,Devangere And Others Vs. M. Panchaksharappa And Another

owners. Its character could be changed with the permission of the Government on payment of certain prescribed fees and charges. The parties could not be certain of obtaining the necessary Government sanction to the conversion of the tenancy from agricultural to building purposes. Therefore the stipulation was clearly made that in the event of the Government refusing to sanction the conversion, the lease will be deemed to have come to an end. If the permission were forthcoming, and if the lessee put up substantial structures, it would be in his interest to continue in possession of the premises demised by the lease as long as he found it worth his while, but the lessee may have apprehended that circumstances might supervene necessitating his walking out of the venture. He therefore had to make provision in the lease entitling him to surrender the lease so as to avoid the liability for payment of future rents. But the lessor on his part would be equally anxious to conserve his rights and therefore he insisted upon the payment of rent for at least 20 years, irrespective of the consideration whether or not the tenant continued to occupy the premises. Thereafter, the lessor stipulated for enhanced rent of Rs. 400/- per annum for the first ten years after the initial period of twenty years aforesaid, and Rs. 500/- thereafter for all times that the lessee continued to occupy the premises.It could not therefore have been in the contemplation of the parties that the lease should be only for the life of the grantee or for an indefinite period which could be terminated at the will of the lessor.In order to ensure that the lessor should not eject the lessee at his sweet will, the term was specifically included in the lease that it will not be open to the lessor to do so. It must, therefore, be held that a stipulation entitling the lessee to surrender possession of the premises at his will is not wholly inconsistent with the tenancy being permanent. In this connection, the following observations of the Judicial Committee of the Privy Council in the case of 35 Cal WN 982 : (AIR 1931 PC 207 ) may be quoted :"On the other hand, restrictions upon the powers of the tenant to dig tanks and build masonry structures (CI. 8) and other provisions in the document were relied upon by the Appellants as indicating a tenancy not of a permanent nature. That some provisions are to be found which point in that direction cannot be denied though some of them may be explained by the existence of the special powers to resume Khas possession referred to above. But the question, after all, is one of construction of a document, viz., what is the correct view to take of the rights of the parties after considering all the clauses of the kabuliyat and giving due weight to the several indications which point in the different directions ?"17. It is noteworthy that the lease was intended by the parties to be heritable and assignable. It was a lease for twenty years certain, and then in terms which are not wholly unequivocal in respect of the period after the lapse of the initial twenty years. That the lease was not intended to be for the life only of the grantee is clear not only from the facts already noticed, namely, that it was meant for building purposes, was heritable and assignable and had not reserved any right to the lessor to terminate the tenancy, but also from the consideration that the lessor would not gamble upon the life of his lessee when he was making sure of the term of at least twenty years. He must have known that if the factory worked for twenty years, it would go on for ever, according to human calculations.18. The fact that the lessee stipulated in express terms that he shall always be at full liberty to give up the lease after October 1, 1934, it was argued, was a clear indication of the lease not being a permanent one; in other words, the contention is that the presumption arising from the fact that the lease was for a building purpose, heritable and assignable, is rebutted by the fact that the tenant had insisted upon the stipulation aforesaid. In our opinion, there is no substance in this contention. It is always open to a lessee of whatever description to surrender his leasehold interest to the lessor, by mutual consent. It is not necessary in law that the mutual consent should be at the time the surrender is being made. It is open to the parties to stipulate terms in anticipation of such a surrender. In the instant case, the surrender was to be in express terms agreed to by the parties, at any time after the lapse of the initial period of twenty years. Such a stipulation for the benefit of the lessee cannot be construed as in derogation of the permanency of the tenure, if the parties otherwise agreed to create such a tenure,19. For the reasons aforesaid, it must be held that the High Court was in error in holding that the present case is governed by the decision of the Bombay High Court in ILR (1954) Bom 448 : (AIR 1954 Bom 257 ). That decision was, with all respect, entirely correct on the norms of the document then before the court. That being so, in our opinion, on a true and proper construction of the lease deed, the presumption in favour of the transaction creating a permanent lease cannot be held to have been rebutted by a stipulation in favour of the tenant having the right to surrender the lease at his choice. That being so, it must be held that the lease deed evidences an intention to create a permanent lease. In view of this finding, it is not necessary to advert to the other contentions noised on behalf of the appellants.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]ut as that defence has not been raised in the pleadings of the defendant and as that point has not been canvassed in the High Court, we ruled that we shall not permit that contention to be raised here. But the substantial ground on which this appeal has been pressed upon us is that by virtue of the lease deed of the year 1914, on a proper construction of that grant, a permanent tenancy was created. If that is so, it is common ground that the suit must fail. Naturally therefore, the main argument at the bar on both sides has been devoted to theIt is manifest, therefore, on a plain construction of the terms aforesaid of the lease deed that the purpose of the transaction was a building lease, that though there was liberty reserved for the lessee or his successor to give up the lease-hold at any time after October 1, 1934, no corresponding right was reserved to the lessor. Thus there is no room for the controversy which has occupied a large portion of the judgments of the courts below, that reservation of the right to the lessee to surrender possession at any time, imported a corresponding right to the lessor to call upon the lessee to give up possession. It was an advantage specifically reserved to the lessee without any corresponding benefit to the lessor. It is equally clear that the lease was heritable and assignable. Thus there is no difficulty in holding that there is no room for the contention, on the terms of the lease, that the parties intended that after the lapse of the first 20 years of the lease, the tenancy will be merely a tenancy at will. It was clearly a tenancy for an indefinite period, at theterms of the grant in that case are set out in full at p. 402 and it is clear on a reference to those terms that the deed was not as strong as we have in the instant case. Only two things were explicit in the terms of that document, namely, (1) that it was a lease for building purposes and (2) that as long as the lessee continued to pay the stipulated rent, the lessor would not be entitled to call upon the lessee toour opinion, the presumption raised by the fact that the lease was for building purposes and therefore intended to be permanent is not weakened by the fact that the lessee had stipulated with the lessor to be entitled to give up possession if and when he decided to do so. It is a right reserved in favour of the lessee and did not confer, as already pointed out any corresponding right on the lessor. Such a right in favour of the lessee cannot be converted into a disability or an obligation which should detract from the grant of a permanent tenancy. Such a stipulation which gives a right to the tenant to surrender the leasehold at any time he decided to do so, if it is coupled with a corresponding right in the landlord to serve notice of ejectment at any time he chose to do so may have the effect of making the tenancy, a tenancy at will, but such a conclusion has been negatived by the High Court and rightlyare in complete agreement with the following observations of the court made in that case which in our opinion apply to the facts and circumstances of the case in handcould not therefore have been in the contemplation of the parties that the lease should be only for the life of the grantee or for an indefinite period which could be terminated at the will of the lessor.In order to ensure that the lessor should not eject the lessee at his sweet will, the term was specifically included in the lease that it will not be open to the lessor to do so. It must, therefore, be held that a stipulation entitling the lessee to surrender possession of the premises at his will is not wholly inconsistent with the tenancy being permanent.It is noteworthy that the lease was intended by the parties to be heritable and assignable. It was a lease for twenty years certain, and then in terms which are not wholly unequivocal in respect of the period after the lapse of the initial twenty years. That the lease was not intended to be for the life only of the grantee is clear not only from the facts already noticed, namely, that it was meant for building purposes, was heritable and assignable and had not reserved any right to the lessor to terminate the tenancy, but also from the consideration that the lessor would not gamble upon the life of his lessee when he was making sure of the term of at least twenty years. He must have known that if the factory worked for twenty years, it would go on for ever, according to humanour opinion, there is no substance in this contention. It is always open to a lessee of whatever description to surrender his leasehold interest to the lessor, by mutual consent. It is not necessary in law that the mutual consent should be at the time the surrender is being made. It is open to the parties to stipulate terms in anticipation of such a surrender. In the instant case, the surrender was to be in express terms agreed to by the parties, at any time after the lapse of the initial period of twenty years. Such a stipulation for the benefit of the lessee cannot be construed as in derogation of the permanency of the tenure, if the parties otherwise agreed to create such aFor the reasons aforesaid, it must be held that the High Court was in error in holding that the present case is governed by the decision of the Bombay High Court in ILR (1954) Bom 448  : (AIR 1954 Bom 257  ). That decision was, with all respect, entirely correct on the norms of the document then before the court. That being so, in our opinion, on a true and proper construction of the lease deed, the presumption in favour of the transaction creating a permanent lease cannot be held to have been rebutted by a stipulation in favour of the tenant having the right to surrender the lease at his choice. That being so, it must be held that the lease deed evidences an intention to create a permanent lease. In view of this finding, it is not necessary to advert to the other contentions noised on behalf of the appellants.