Raja Kamala Ranjan Roy v. Baijnath Bajoria — 1948 DIGILAW 151 (CAL)

JUDGMENT Mukherjee, J. - This appeal is on behalf of the Defendant 'and is, directed against a judgment of Mr. Justice Ormond dated the 24th of January, 1947, by which the learned Judge decreed the Plaintiff's suit for specific performance of a contract for assignment to him by the Defendant of the latter's lease-hold interest in premises No. 374, Upper Chitpur Road held under the Maharaja of Cossimbazar. There is no much controversy about the material facts which stand as follows: The Maharaja of Cossimbazar is the owner of premises No. 374, Upper Chitpur Road in the town of Calcutta. By an indenture dated the 27th of April, 1931, the Maharaja demised and let out the said premises to one Madan Gopal Daga for a period of fifty-one years commencing from May 1, 1931, the rent reserved-being Rs. 1,083 and annas odd per month. Two of the covenants in the lease are material for our present purpose. One is that the lessee would not he competent to assign the demised premises or any part thereof without first obtaining the consent of the lessor which consent, however, is not to he unreasonably withheld in the case of respectable or responsible persons; the other is that if the rent or any part thereof remains unpaid for three months after being payable or if any covenant on the lessee's part is not performed or observed then it would be lawful for the lessor to determine the lease and re-enter the demised premises. On March 25, 1943, Madan Gopal Daga assigned his lease-hold interest in premises No. 374, Upper Chitpur Road to the Defendant Appellant Raja Kamala Ranjan Ray and to this assignment the lessor "apparently gave his consent and the Defendant was recognised as a tenant. By a letter dated the 27th January, 1945, the Plaintiff Baij Nath Bajoria made an offer to the Defendant for purchasing the unexpired residue of the lease-hold interest of the latter in the said premises for a sum of Rs. 1,80,000 only. It was proposed that a sum of Rs. 30,000 would be paid as earnest if the Defendant was able to give vacant possession of that portion of the premises which was in actual occupation of Madan Gopal Daga and that the assignment would be made with effect from February 1, 1945. 1,80,000 only. It was proposed that a sum of Rs. 30,000 would be paid as earnest if the Defendant was able to give vacant possession of that portion of the premises which was in actual occupation of Madan Gopal Daga and that the assignment would be made with effect from February 1, 1945. In paragraph 4 of the letter it was stated as follows:-- 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. 2. To this letter a reply was given by the Defendant on the day following in which certain modifications of the terms proposed by the Plaintiff were suggested and it was stated inter alia that if final acceptance of this counter offer was received within 30th January following, and the Defendant was able to obtain the consent of the lessor within the first week of February, 1945, he could agree to the Plaintiff's proposal that the transfer would take effect on and from the 1st of February, 1945. On the 29th of January, 1945, the Plaintiff made another and a modified offer apparently after consultation with the Defendant's agent and the material terms of this proposal were as follows:-- (a) the earnest money would be Rs. 5,000; (b) the conveyance would be executed in favour of the Plaintiff himself and not his nominee and before the completion of the sale the Defendant should obtain the consent of the lessor; (c) the conveyance would be completed within one month from the receipt of the original title deeds from the Defendant; (d) irrespective of the date of the execution of the conveyance the assignment would take effect on and from the 1st of February, 1945. 3. These terms were accepted by the Defendant by his letter dated the 1st of February, 1945, with this slight modification that cl. (d) would be given effect to only it the conveyance was completed in terms of cl. (c). This modification was accepted by the Plaintiff's solicitor on February 2, 1945, and he intimated to the Defendant's attorneys on that very day that a cheque of Rs. 5,000 had already been sent and requested the latter to send the title deeds at once. (c). This modification was accepted by the Plaintiff's solicitor on February 2, 1945, and he intimated to the Defendant's attorneys on that very day that a cheque of Rs. 5,000 had already been sent and requested the latter to send the title deeds at once. It appears that on the 27th of February, 1945, the Defendant wrote to the Maharaja of Cossimbazar requesting the latter to give permission in writing for the proposed assignment of the leasehold interest in respect of premises No. 374, Upper Chitpur Road in favour of the Plaintiff Bajoria. The reply to this letter is dated the 5th of March, 1945, and the Maharaja intimated to the Defendant that no question of giving consent to any transfer of the lease-hold interest in favour of any person would arise as the lease in respect of premises No. 374, Upper Chitpur Road had already been determined by him by reason of the breach of the covenant contained in the lease. On March 8 following the Defendant's solicitor wrote to Messrs. Himatsingka & Co., the solicitors of the Plaintiff that as consent was refused by the lessor no valid transfer was possible and in these circumstances they had no other alternative but to cancel the agreement and return the sum of Rs. 5,000 paid as earnest. In reply to this the Plaintiff's solicitors stated that the Defendant was not legally entitled to cancel the agreement inasmuch as the giving of the consent by the lessor was not a condition precedent attached to it. It was further pointed out that as the Plaintiff was a perfectly respectable man the landlord could not withhold his consent under the terms of the lease itself. On the 14th of March, 1945, the Plaintiff called on the Maharaja of Cossimbazar personally with a view to secure his consent to the transfer of the lease and handed over to him a letter which is to be found printed at page 77 of the paper-book. This atempt, however, was not successful and on the 17th March following the Maharaja of Cossimbazar filed a suit against the Defendant in the Original Side of this Court for ejectment from premises No. 374, Upper Chitpur Road on the ground that the tenancy in respect of the said premises was determined by forfeiture. This atempt, however, was not successful and on the 17th March following the Maharaja of Cossimbazar filed a suit against the Defendant in the Original Side of this Court for ejectment from premises No. 374, Upper Chitpur Road on the ground that the tenancy in respect of the said premises was determined by forfeiture. After this there was a good deal of correspondence between the Plaintiff's solicitors and those of the Defendant. The Plaintiff pressed his demand for completion of the contract irrespective of the fact as to whether consent was given by the landlord or not whereas the position taken up by the Defendant was that the lessor having refused his consent the contract was absolutely at an end. On June 30, 1945, the Plaintiff filed the present suit claiming specific performance of the agreement for assignment of the lease and there was claim for damages and other incidental reliefs. 4. The plaint proceeded on the footing that it was the duty of the Defendant under the terms of the contract to obtain the consent of the landlord for assignment of the leasehold interest in favour of the Plaintiff and that the Defendant failed to obtain such consent because of default on his part in payment of rents due to the landlord. The Plaintiff averred in his plaint that he was entitled to pay the defaulted rents to the landlord and deduct the same from the price payable by him. 5. This plaint as stated above was filed on the 30th of June, 1945. On the 13th of July, 1945, the ejectment suit brought by the Maharaja of Cossimbazar against the Defendant ended in a compromise. The Defendant paid off all arrears of rent due to the Maharaja and the latter waived forfeiture of the tenancy. On August 6, 1945, the Defendant wrote a letter to the Maharaja stating that as the latter had withdrawn the forfeiture and the lease was restituted permission might be given to the Defendant to assign his lease-hold interest to Bajoria. The reply to this letter was sent by the Maharaja on the same day and it runs as follows:-- I regret that I cannot give my consent to your assigning in favour of the Hon'ble Baijnath Bajoria the interest in the unexpired residue of the term of the lease dated 27th April. 1931, as requested by you. 6. The reply to this letter was sent by the Maharaja on the same day and it runs as follows:-- I regret that I cannot give my consent to your assigning in favour of the Hon'ble Baijnath Bajoria the interest in the unexpired residue of the term of the lease dated 27th April. 1931, as requested by you. 6. The Defendant filed his written statement on the 21st August, 1945, and his defence in substance was that as it was a contingent contract depending upon his obtaining the consent of the landlord and as no consent was given by the landlord in spite of his best efforts to secure the same there was no concluded agreement between the parties and that no decree for specific performance could be made in a case like this. 7. It would be seen from what has been stated above that when the Plaintiff filed his plaint the Maharaja of Cossimbazar had already instituted a suit for ejectment against the Defendant treating the lease to be forfeited on the ground of default in the payment of rents. It appears to have been assumed in the plaint that if these defaulted rents were paid by the Defendant there would be no further difficulty in the way of inducing the landlord either to waive the forfeiture or to sanction the alienation of the lease-hold interest in favour of the Plaintiff. There was no allegation in the plaint that the landlord had unreasonably withheld his consent and that consequently the Defendant was competent in law to execute a conveyance even without such consent. On the other hand there was an express prayer by the Plaintiff that the Defendant was to be directed to do all acts and things that are necessary to transfer the lease-hold interest effectively in favour of the Plaintiff. As said already, after the plaint was filed, the ejectment suit brought by the Maharaja of Cossimbazar against the Defendant was settled and the forfeiture was in fact waived after payment of all the rents in arrears, but the Maharaja still refused to give his consent to the assignment of the lease by the Defendant to the Plaintiff in spite of an express request in writing by the Defendant to grant him the permission. The letter addressed by the Defendant to the Maharaja on this subject which is dated the 6th August, 1945, and the Maharaja's reply thereto on the same day categorically refusing the permission prayed for were put in evidence on behalf of the Defendant at the time of the trial. Strangely, however, the learned Counsel for the Plaintiff took strong objection to the reception of these letters as evidence in the case on the ground that they were written after the suit was filed. Eventually the Plaintiff's Counsel towards the close of the case stated to the Court that his client would not insist on the Defendant's obtaining consent of the landlord and that he would be prepared to take the assignment without the landlord's consent. Mr. Justice Ormond has decreed the suit practically on this altered case made by the Plaintiff. It has been held by the learned Judge that the contract in the present case was not a contingent contract and that the provision relating to obtaining the consent of the landlord was a term of the contract itself the benefit of which the Plaintiff was entitled to waive. The learned Judge further found that the lessor in the present case not having intimated to the Defendant any reason for withholding his consent must be held to have unreasonably withheld his consent and in these circumstances the Defendant was entitled to assign without the consent of the landlord and a decree for specific performance could be made against him by the Court. The result was that the learned Judge made a decree for specific performance as prayed for in the plaint with this qualification that if the Defendant was unable within a fortnight to obtain the consent in writing of his landlord then the assignment will be made without such consent. It is against this judgment that the Defendant has come up in appeal. 7. The learned Advocate-General who appeared in support of the appeal has contended before us in the first place that the contract in the present case was a contingent one depending on the landlord's giving consent to the transfer and as this consent was not given, no performance could be demanded by the promisee. We do not think that we can accept this contenton as sound. We do not think that we can accept this contenton as sound. We have been referred in this connection to the letter of the Plaintiff dated the 27th of January, 1945, which has been fully set out already and the Defendant's reply thereto on the 28th of January following. It was undoubtedly agreed to by and between the parties that the Defendant would have to obtain the consent of the landlord prior to the execution of the conveyance. This is perfectly clear from the letter of the Plaintiff's attorney dated the 29th of January, 1945, paragraph (b) of which runs as follows: "The consent of the landlord will be obtained by you before the completion of the sale." This term, it is not disputed, was accepted by the Defendant. We are quite prepared to hold that this was one of the terms of the agreement a breach of which might entitle the Plaintiff to rescind the contract or to sue for damages; but we are unable to hold that the agreement was made subject to the landlord's consent being obtained and so long as the consent was not obtained no duty or obligation on the part of the Defendant to perform the contract did at all arise. If really without the consent of the landlord no effective assignment of the lease-hold interest was possible, no Court would decree the Plaintiff's suit for specific performance but that would not make the contract a contingent one which creates no obligation till the contingency is fulfilled. The main point for our consideration is whether in view of the fact that the landlord has refused his consent, a decree for specific performance could be made in the present case. If the Plaintiff insists on the Defendant's obtaining the consent of the landlord prior to the execution of the conveyance in his favour it is not disputed that the Court could not give him a decree for specific performance. The Plaintiff, however, has expressed his readiness to waive the benefit of this term in the contract and he is willing to take a conveyance without the lessor's consent. The Plaintiff, however, has expressed his readiness to waive the benefit of this term in the contract and he is willing to take a conveyance without the lessor's consent. The learned Advocate-General pointed out, and in our opinion, quite rightly that if this povision for the contract is exclusively for the Plaintiff's benefit it would be open to him to waive its performance but he cannot get rid of the necessity of obaining the landlord's consent if that consent is necessary for the Defendant's benefit as well. It is argued by the learned Advocate-General in this connection that if a transfer is made by his client without the lessor's consent the lessor might sue the Defendant for breach of covenant and recover damages from him. If that is really the position in law, that would certainly furnish a complete answer to the Plaintiff's claim for specific performance. The controversy, therefore, narrows down to this: whether in view of what has happened here the Defendant can assign his lease-hold interest to the Plaintiff without being guilty of a breach of covenant on his part and without running the risk of being made liable for damages on that score. 8. Under the terms of the lease the lessee covenanted not to assign the demised premises or any part thereof without first obtaining the consent of the lessor. Such consent, however, is not to be unreasonably withheld in the case of respectable or responsible persons. The legal incidents of a covenant expressed in similar or identical language in a lease have been considered in a large number of cases by the English Courts and reference may be made amongst others to the cases of Treloar v. Bigge (1874) L. R. 9 Ex. 151, Bates v. Donaldson (1896) 2 Q. B. 241, Lewis and Allenby v. Pegge (1914) 1 Ch. 782 and Houlder Bros. & Co., Ltd. v. Gibbs (1925) 1 Ch. 575. 9. In Treloar v. Bigge (1874) L. R. 9 Ex. 151 which is one of the leading authorities on this point, the lessee covenanted with the lessor not to assign the demised premises without the consent in writing of the landlord, such consent not being arbitrarily withheld. 782 and Houlder Bros. & Co., Ltd. v. Gibbs (1925) 1 Ch. 575. 9. In Treloar v. Bigge (1874) L. R. 9 Ex. 151 which is one of the leading authorities on this point, the lessee covenanted with the lessor not to assign the demised premises without the consent in writing of the landlord, such consent not being arbitrarily withheld. It was held that this did not amount to a separate or independent covenant by the lessor that he would not refuse consent except upon reasonable grounds but that the lessee's covenant which itself was in derogation of his common law rights was limited and qualified and its operation prevented in the case of arbitrary refusal on the part of the lessor. The result was that in case the lessor arbitrarily refused his consent, the covenant would cease to be operative and the lessee would be free to assign without the consent of the landlord. 10. In Bates v. Donaldson (1896) 2 Q. B. 241, the covenant in the lease was expressed almost in the same language as in the present case. The lessee covenanted not to assign without license of the lessor, such license not to be unreasonably withheld in the case of respectable and responsible persons who may be the proposed assignee. The lessor withheld license because he desired to obtain possession of the premises himself. It was held that the refusal was unreasonable and a suit for ejectment instituted by the landlord on the ground of breach of covenant was dismissed. It may be interesting to note that in this case the assignment by the lessee was actually made in pursuance of a judgment of the Chancery Court where the proposed assignee instituted a suit for specific performance of the contract for assignment. 11. In Houlder and Bros. v. Gibbs (4), where the covenant was identically the same as in the present case, the lessor refused consent as he would otherwise lose good tenants in the adjoining premises. It was held that the refusal was unreasonable and the lessee was free to assign. 12. The position of law, therefore, is that a covenant of this character would cease to be operative and the lessee would be free to assign his interest without the consent of the landlord if the latter refused consent unreasonably although the proposed assignee was a respectable and responsible person. 12. The position of law, therefore, is that a covenant of this character would cease to be operative and the lessee would be free to assign his interest without the consent of the landlord if the latter refused consent unreasonably although the proposed assignee was a respectable and responsible person. In the case before us the learned Advocate-General has candidly stated that he is not in a position to say that the Plaintiff is not a respectable or a responsible person. We agree with him that even then there may be reasons which would justify the lessor in withholding his consent. The question now is whether the refusal on the part of the landlord has been unreasonable in the present case. As has been stated already, after the ejectment suit brought by the Maharaja against the Defendant was compromised, the Defendant (4) (1925) 1 Ch. 575 wrote a letter to the Maharaja praying for the latter's consent to the proposed assignment. To this the Maharaja replied on the same day and in the reply he definitely refused consent without assigning any reason whatsoever. Mr. Justice Ormond seems to be of the opinion that as no reason was given by the Maharaja and as the lessee is not bound to wait indefinitely for a proper answer from the landlord, the withholding of the consent by the Maharaja must be deemed to be unreasonable. We could not entirely agree with the learned Judge's way of thinking. It is true that no reason was given by the Maharaja in his letter of the 6th of August, 1945, but even then it might be that he had some reasons which he did not think necessary to disclose at that time. In order to clear up the matter we gave the Plaintiff an opportunity to examine the Maharaja as a witness in this case so that all the 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 Maharaja was examined on commission and his deposition is now before us. The reasons given by him for refusing consent to the assignment of the lease are substantially of a two-fold character. The Maharaja was examined on commission and his deposition is now before us. The reasons given by him for refusing consent to the assignment of the lease are substantially of a two-fold character. The first is that the Plaintiff is a non-Bengalee and is governed by the Mitakshara School of Hindu Law which might introduce difficulties in the way of proper realisation of rents. The second is that the Plaintiff is by report a litigious man whose name frequently appears in High Court proceedings. 13. So far as the first objection is concerned we do not think that it has got much substance. That the Plaintiff is a wealthy man and a man of position is not disputed; it is true that he is governed by the Mitakshara laws, but that by itself is not sufficient to create difficulties as the lessor apprehends, It is nowhere suggested that all his properties are joint ancestral properties and that he has no separate properties of his own. Even if his properties arc joint, certainly his share in them can be attached and sold in execution of a rent decree which might be obtained by the Maharaja and the purchaser at such sale would have the right of enforcing partition in respect to the purchased share. Quite apart from that the lessor has the right of re-entry under the terms of the lease itself if the rent remains in arrears for a period of three months. It is also necessary to point out that the first and original lessee was a non-Bengalee and was governed by the Mitakshara law. 14. As regards the second objection, it rests entirely on what the Maharaja is supposed to have heard from a friend of his named Sarat Chandra Mitter who had some litigation with the Plaintiff. We have no materials before us to show that the Plaintiff is by habit a litigious person or indulges in unnecessary law suits. The mere fact that he figured as a Defendant in a suit brought by Sarat Chandra Mitter does not justify us in coming to the conclusion that he is in any way an undesirable person to be a tenant of the premises in question. The mere fact that he figured as a Defendant in a suit brought by Sarat Chandra Mitter does not justify us in coming to the conclusion that he is in any way an undesirable person to be a tenant of the premises in question. On the evidence before us we are inclined to hold that the withholding of the consent by the Maharaja has been unreasonable in the present case and consequently the Defendant is at liberty to alienate the lease-hold interest without the consent of the lessor. He would not be guilty of any breach of covenant by making the assignment and practically speaking, he incurs no risk in doing so. The Court can by a decree for specific performance compel the Defendant to do what in law he is competent to do. 15. The learned Advocate-General has finally asked us to hold that Mr. Justice Ormond was wrong in decreeing the Plaintiff's suit upon a case which was not made in the pleadings and for which there was really no cause of action at the date when the plaint was filed. It is quite true that at the date of the institution of the suit the Maharaja of Cossimbazar had already determined the lease of the Defendant and brought a suit for ejectment against him. There could be no question of unreasonable withholding of a consent by the Maharaja at that time and no such case was made in the plaint. It was after the suit was filed that the dispute between the Defendant and the Maharaja was settled and then there was a definite refusal by the Maharaja to consent to the assignment of the lease. As we have said already, it was very strange that when the Maharaja's letter of refusal was sought to be put into evidence on behalf of the Defendant, the Plaintiff's Counsel took serious objection to it although it was on the basis of this letter that he ultimately induced the Court to hold that there was unreasonable refusal on the part of the lessor. The learned Advocate -General says that the Plaintiff ought to have amended the plaint and made a specific case of unreasonable refusal by the lessor which would justify the lessee in making an assignment without the lessor's consent. The learned Advocate -General says that the Plaintiff ought to have amended the plaint and made a specific case of unreasonable refusal by the lessor which would justify the lessee in making an assignment without the lessor's consent. This undoubtedly could have been done but as there was strictly speaking no element of surprise in the present case and the Plaintiff eventually relied upon facts admitted and proved by the Defendant himself, we do not think that we should be justified in throwing out the Plaintiff's suit on this ground alone. It has been held in more cases than one that for the purpose of shortening litigation and doing complete justice to the parties the Court is not precluded from taking into consideration facts which happened after the suit was filed. We think, however, that the Plaintiff or rather his legal advisers did not take up a consistent attitude during the course of the trial and ultimately they rested their case upon a point which they were unwilling to rely on when the trial commenced. We think that in these circumstances the Defendant would have the entire costs of this litigation both of this Court as well as of the trial Judge from the Plaintiff. The result is that we dismiss the appeal and give the Plaintiff a decree for specific performance subject to this that no consent of the Defendant's lessor need be taken prior to the execution of the deed of conveyance in favour of the Plaintiff. The Plaintiff will pay to the Defendant the costs of this Court as well as of the trial Judge. Harries, C.J. I agree.