Case: Namdeo Lokman Lodhi Vs. Narmadabai And Others

3. The present respondents are the daughter and grandsons of the original plaintiff Vinayakbhat. His adoptive mother was Ramabai. She owned two inam lands at Mundhava which were then numbered Pratibhandi Nos. 71 and 72. Present survey Nos. 86/1 and 86/2 together correspond to old Pratibhandi No.On 1-7-1863 Ramabai, while she was in financial difficulties, passed a permanent lease of both these numbers to one Ladha Ibrahim Sheth. The lessee paid a premium of Rs. 999 for the lease, and also agreed to pay a yearly rent of Rs. 80 to Ramabai during her lifetime and after her death a yearly amount equal to the assessment of the two lands to the heirs of Ramabai. The lease provided that in default of payment of rent, the tenants rights would come to an end. On 18-8-1870 Ladha Ibrahim sold his tenancy rights to one Girdhari Balaram Lodhi for Rs. 7,999. The sale-deed provided that in default of payment of rent to Ramabai or her heirs, the purchaser would have no rights whatsoever left over the property. On the same day the purchaser passed a rent note in favour of Ramabai. The rent note provided for the payment of the agreed rent in the month of Poush every year, and stated that in case of default the tenant or his heirs would have no right over the land. Defendant 1 and the other defendants are the grandsons of Sethi Girdhari Balaram.4. In spite of the nullity clause in the lease it appears that the lessee has been more or less a habitual defaulter in the payment of rent. In the year1913, rent for six years was in arrears. Vinayakbhat filed Suit No. 99 of 1913 in the Court of the II class Sub-Judge, Poona, against the present defendants for possession of the demised premises on the ground of forfeiture. A number of defences were raised by them. Inter alia, it was pleaded that as no notice had been given to them the forfeiture was not enforceable. These contentions were negatived but the court granted relief against forfeiture. Defandant was a minor at that time and became a major in or about 1925.5. In the year1928 again rent for two years was in arrears. Vinayakbhat filed Civil Suit No. 258 of 1928 against the present defendants for possession on the ground of forfeiture. The plaintiff subsequently waived the forfeiture by accepting three years rent which by then had fallen in arrears and costs of the suit.6. In the year 1931 rent for three years again fell into arrears. The amount was then sent by money order and the landlord accepted it.7. In the year 1934 again rent for three years remained unpaid. At that time proceedings were started by Government for the acquisition of the old Survey No. 72. The landlord claimed that he was entitled to the whole compensation money as the tenants rights had ceased by forfeiture for non-payment of rent. Decendant 1 through his pleader sent a notice to Vinayakbhat to come and take the arrears of rent. He agreed and accepted the arrears of rent and the forfeiture was again waived. As a result of this the defendants got Rs. 32,000 by way of compensation for the permanent tenancy rights in old Survey No. 72, while Vinayakbhat got Rs. 1.400 for compensation for the acquisition of his rights as landlord in that land.8. In 1938 rent for four years was again in arrears. Vinayakbhat filed Civil suit No. 982 of 1938 in the Court of the first Class sub-judge at Poona against all the present defendants for possession of survey Nos. 86/1 and 86/2 on the ground that the lease had determined by forfeiture for non-payment of rent. In that suit defedant 1 pleaded that there was no forfeiture because no rent was fixed in respect of the suit property and also because it was or the plaintiff to recover rent and not for the defendants to go to the plaintiff and pay it. These contentions were negatived. It was held that forfeiture had occurred but relief against forfeiture was again granted.9. On plaintiffs appeal in this case the learned District judge refused to interfere with the discretion of the trial judge in granting relief against forfeiture but observed that the defendants having obtained relief against forfeiture thrice before should not expect to get it for a fourth time if they again make default in the payment of rent.10. The default which has given rise to the present suit occurred on 28-1-1941 and the plaintiff filed the suit out of which this appeal arises for possession on the ground of forfeiture and for the arrears of rent which remained unpaid. It was alleged in the plaint that the rent due on 28-1-1941 was not paid, though demanded. Plaintiff asked for possession of survey Nos. 86/1 and 86/2 after removal of the structures thereon. Defendant 1 pleaded that as a result of partition rights in survey No. 86/2 had fallen to his share, that according to the terms of the rent note it was for the plaintiff to approach the defendants and not for the defendants to go to the plaintiff and pay it, that as the plaintiff did not approach the defendants and no demand for rent was made, no forfeiture occurred, that defendant 1 did offer the rent to the plaintiff, but the plaintiff fraudulently refused to accept it, that the plaintiff ought to have sent a notice according to law if he wanted to enforce the right of forfeiture and that without prejudice to the above contentions he should be granted relief against forfeiture.11. The trial Court decreed the plaintiffs suit and negatived the contentions raised by the defendants. In awarding possession of the entire property to the plaintiff, the trial Court imposed a condition that defendant 1 should continue to be in possession of the two structures in survey No. 86/2 till the end of March 1950, on the question whether a notice was necessary before the lease could be terminated, the trial Court expressed the view that the provision in the rent note that on non-payment of rent the rights of the tenant would come to an end was a clause of nullity and not merely a clause of forfeiture and that the lease was, therefore, determined under S. 111(b) and not under s. 111 (g), T. P. Act, and that no notice as required by s. 111 (g) was necessary for terminating the lease in suit. On the issue whether forfeiture should be relieved against, the trial Court said that relief could have been given to the lessee against forfeiture under s. 114 had it not been for the fact that the defendants had disentitled themselves of relief by contumacious conduct on their part, that even this paltry rent had never been paid in time during the last twenty years at any rate, and that after defendant 1 had attained majority and got the estate in his charge in 1922-23 had uniformly defaulted in the payment of rent and that the defendants raised totally false defences and in every suit a false excuse was set up in an attempt to justify the arrears of rent.In pursuance of the trial Courts decree, plaintiff took possession of all the suit lands in April 1943 except one acre of which he took possession on 13-9-1943. Defendant 1 remained in possession of the two structures on survey No. 86/2. Against the decision of the trial judge defendant 1 alone filed an appeal to the District Judge of Poona. The lower appellate Court confirmed the decree of the trial Court with two modifications. Defendant I was allowed to remove the buildings on survey No. 86/2 and also the trees therein within three months. On the issue whether a notice was necessary, the appellate court found that the lease came to an end not under s. 111 (b) but under s. 111 (g), T. P. Act, but that no notice of forfeiture was necessary as the lease had been executed prior to the coming into force of the Transfer of Property Act. The appellate Court saw no valid reason for interfering with the finding of the trial Judge on the question concerning relief against forfeiture.13. From this appellate decree defendant 1 filed a second appeal to the High court of Judicature at Bombay. The plaintiff filed cross-objections in regard to the trees and costs. The High Court dismissed the appeal and allowed the cross-objections. An application was made for leave to appeal to the supreme Court and it was granted with reference to S. No. 86/2.

Court's reasoning:
14. The law with regard to the determination of a lease by forfeiture is contained in S. 111 (g), T. P. Act. Under that provision a lease is determined by forfeiture in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter, or in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself, or the lessee is adjudicated an insolvent and the lease provides that the lessor may reenter on the happening of such event and a certain further act is done by the lessor as thereinafter mentioned.It is axiomatic that the Courts must apply the principles of justice, equity and good conscience to transactions which come up before them for determination even though the statutory provisions of the. Transfer of Property Act are not made applicable to these transactions. It follows, therefore, that the provisions of the Act which are but a statutory recognition of the rules of justice, equity and good conscience also govern those transfers. If therefore, we are satisfied that the particular principle to which the legislature has now given effect by the amendment to s. 111 (g) did in fact represent a principle of justice equity and good conscience, undoubtedly the case will have to be decided in accordance with the rule laid down in section although in express terms it has not been made applicable to leases executed prior to 1929 or even prior to the Transfer of Property Act coming intoHigh Court held, and we think rightly, that this provision in sub-s. (g) of S. 111 in regard to notice was not based upon any principle of justice, equity and good conscience. In the first instance it may be observed that it is erroneous to suppose that every provision in the Transfer of Property Act and every amendment effected is necessarily based on principles of justice, equity and good conscience. It has to be seen in every case whether the particular provision of the Act relied upon restates a known rule of equity or whether it is merely a new rule laid down by the legislature without reference to any rule of equity and what is the true nature and character of the rule. Now, so far as S. 111(g) of the Act is concerned, the insistence therein that the notice should be given in writing is intrinsic evidence of the foot that the formality is merely statutory and it cannot trace its origin to any rule of equity. Equity does not concern itself with mere forms or modes of procedure. If the purpose of the rule as to notice is to indicate the intention of the lessor to determine the lease and to avail himself of the tenants breach of covenant it could as effectively be achieved by an oral intimation as by a written one without in any way disturbing the mind of a Chancery Judge. The requirement as to written notice provided in the section, therefore, cannot be said to be based on any general rule of equity. That it is not so is apparent from the circumstance that the requirement of a notice in writing to complete a forfeiture has been dispensed with by the legislature in respect to leases executed before 1-4-1930. Those leases are still governed by the unamended sub-s. (g) of Sec. 111. All that was required by that sub-section was that the lessor was to show his intention to determine the lease by some act indicating that intention. The principles of justice, equity and good conscience are not such a variable commodity, that they change and stand altered on a particular date on the mandate of the legislature and that to leases made between 1882 and 1930 the principle of equity applicable is the one contained in sub-s. (g) as it stood before 1929, and to leases executed after 1-4-1930 the principle of equity is the one stated in the sub-section as it now stands. Question may also be posed, whether according to English law a notice is a necessary requisite to complete aour opinion, the provision as to notice in writing as a preliminary to a suit for ejectment based on forfeiture of a lease is not based on any principle of justice, equity or good conscience and cannot govern leases made prior to the coming into force of the Transfer of Property Act, 1882, or to leases executed Prior to 1-4-1930. The rights and obligations under those leases have to be determined according to the rules of law prevailing at the time and the only rule applicable seems to be that a tenant cannot by his unilateral act and by his own wrong determine the lease unless the lessor gives an indication by some unequivocal expression of intention on his part of taking advantage of the breach.On no principle of equity is a tenant entitled to a notice in writing telling him that the lease has been determined. The High Court was, therefore, right in the view that it took of the matter and there are no valid reasons for taking a contraryrelation of lessor and lessee is one of contract and in Bacons Abridgement a lease is defined as a contract between the lessor and the lessee for the possession and profits of land on the one side and recompense by rent or other consideration on the other. The statute has given a more comprehensive definition of the term. Section 107 makes registration of a lease compulsory. This section again does not concern itself with any principle of justice or equity. Section 108(j) enacts that the lessee may transfer absolutely by way of mortgage or sub-lease the whole or any part of his interest in the property and any transferee of such interest or part may again transfer it. The law in India and England on this subject is not the same and it cannot be said that this sub-section enacts or enunciates any general principle of equity.In our opinion, in exercising the discretion, each case must be judged by itself, the delay, the conduct of the parties and the difficulties to which the landlord has been put should be weighed against theis a maxim of equity that a person who comes in equity must do equity and must come with clean hands and if the conduct of the tenant is such that it disentitles him to relief in equity, then the Courts hands are not tied to exercise it in his favour.With great respect we think that the observations cited above contain sound principle of law. We are, therefore, unable to accede to the contention of Mr. Dauhtary that though Sec. 114, T.P. Act, confers a discretion on the Court, that discretion, except in cases where third party interests intervene, must always be exercised in favour of the tenant irrespective of the conduct of the tenant. It is clear that in this case the tenant is a recalcitrant tenant and is a habitual defaulter. For the best part of 25 years he has never paid rent without being sued in Court. Rent has been in arrears at times for six years, at other times for three years and at other times for four years and so on, and every time the landlord had to file a suit in ejectment which was always resisted on false defences. No rule of equity, justice or good conscience can be invoked in the case of a tenant of this description. He cannot always be allowed to take advantage of his own wrong and to plead relief against forfeiture on every occasion, particularly when he was warned by the Court of appeal on a previous occasion. He had already had relief three times on equitable grounds and it is time that the Court withheld its bands and ordered his ejectment. In this situation the High Court was fully justified in finding that in second appeal it would not interfere with the discretion of the Courts below in refusing to grant relief against forfeiture.