Gopala Kiamal v. Variath — 1956 DIGILAW 55 (KER)

Judgment :- 1. This second appeal is directed against the concurrent decisions of the two lower courts declaring that the renewal of a lease executed by defendant 5 as a mukthyar agent of defendant 2 in favour of defendant 1 is not valid or binding on the plaintiffs or the leasehold interest they claim in the property. The facts that led to the litigation are clearly and succinctly stated in Para.1 of the lower appellate court's judgment. That paragraph may with advantage be quoted here: "The first defendant is the appellant. The suit is for setting aside Ext. II, renewal deed executed by the 5th defendant as Mukthyar of the 2nd defendant in favour of the jenmi, the 1st defendant. The second defendant had a leasehold interest in the plaint property. He contracted with the 1st plaintiff on 2.12.1124 to sell the leasehold interest to the latter before the 15th of Chingom 1125 for a consideration of Rs. 1300. Ext. A and Ext. A(1) are the agreement and counter-part. Thereafter on 8.12.1124, the 2nd defendant executed Ext. I Mukthyar in favour of the 5th defendant authorising him to execute a lease deed in favour of the 1st defendant attorning to the latter. On 10.12.1124, the 5th defendant executed Ext. II lease deed in favour of the 1st defendant enhancing the dues from Rs. 2-4-5 to Rs. 9-9-9 and agreeing to surrender the property on demand. The 1st plaintiff came to know of this before he took the sale deed. Therefore, he demanded the cancellation of Ext. II. The 1st defendant refused to do it, while the 2nd defendant stated that Ext. II was the result of fraud played by defendants 1 and 5. Thereafter the 2nd defendant executed Exts. C and C(1) sale deeds in the name of the two plaintiffs on 7.1.1125. The 2nd plaintiff is the son of the 1st plaintiff and it is their case that even the document in the name of the 2nd plaintiff was taken benami for the 1st plaintiff and in pursuance to Ext. A. As on the date of Exts. C and C(1) Ext. II was in force, the plaintiffs brought this suit to set aside Ext. II and to declare that the rent due is only Rs. 2-4-5." 2. A. As on the date of Exts. C and C(1) Ext. II was in force, the plaintiffs brought this suit to set aside Ext. II and to declare that the rent due is only Rs. 2-4-5." 2. The trial court gave a decree to the plaintiffs in terms of his plaint on the ground that Ss.5 and 13 of the Cochin Verumpattomdars Act (VIII of 1118) forbade enhancement of the rent of a verumpattom holding. The lower appellate court besides concurring in that view also held that under Ext. I, the mukthyar executed by defendant 2 in favour of defendant 5 to execute a renewal, did not authorise defendant 5 to agree to an enhancement of rent. Besides the grounds on which the lower appellate court based its decision the plaintiffs had depended upon two other grounds also to obtain reliefs asked for in the suit. One was that the provision for enhanced rent was introduced into Ext. II fraudulently and without the knowledge of defendant 5. The trial court repelled the case of fraud and that case was not sought to be urged either before the lower appellate court or before us in second appeal. The other ground relied upon in the plaint was that on the date of Ext. II plaintiff 1 was in possession of the property pursuant to the agreement to sell [Ext. A and Ext. A(1)] and that therefore the renewal effected after the title passed to the vendee was not binding on him. The terms of Ext. A and Ext. A(1) as also the terms of Ext. C and Ext. C(1), the two sale deeds in favour of plaintiff 1 and plaintiff 2, belie the case that any possession passed to plaintiff 1 pursuant to the agreement to sell. We are, therefore, called upon to consider only whether the grounds on which the lower appellate court dismissed the present appellant's (defendant 1's) appeal before it are sound. 3. Mr. V. Sankara Menon, learned counsel for the appellant urged that the Cochin Verumpattomdars Act did not prevent the landlord and the tenant effecting a renewal of a lease with enhanced rent. 3. Mr. V. Sankara Menon, learned counsel for the appellant urged that the Cochin Verumpattomdars Act did not prevent the landlord and the tenant effecting a renewal of a lease with enhanced rent. While counsel conceded that an agreement to enhance the rent made during the currency of a lease may not be valid, S.10 of the Verumpattomdars Act permitted the tenant to surrender the holding and that renewal was one recognised form of surrender, namely, implied surrender. S.10 however makes it clear that the surrender countenanced by it is actual physical surrender of the property to the landlord and not any implied surrender. Be that as it may, for the purpose of this second appeal we consider it unnecessary to decide the question whether a renewal with onerous terms would be hit by the provisions of the Verumpattomdars Act. 4. To us it would appear that the lower appellate court's view that in Ext. II defendant 5 went beyond the terms of his authority is fully warranted. The trial court which repelled this ground of the plaintiffs' case found that there was no express authority conferred under the mukthyar, Ext. I, to effect the renewal enhancing the rent. To find implied authority the learned District Munsiff depends upon the oral evidence of defendant 2, but the admissions or concessions defendant 2 made from the witness-box cannot add to the terms of Ext. I. That document merely authorised defendant 5 to effect a renewal of the lease granted in 1074 as per Ext. V. The provisions of the Cochin Verumpattomdars Act being what they are it is idle to think that defendant 2 would have agreed for an enhancement of the rent. He was entitled to have fixity of tenure and the records of the prior litigation between him and defendant 1 in O.S. 400 of 1122 show that he was fully aware of his rights as a verumpattomdar - vide Ext. N, written statement in the case and Ext. L, the razi petition. Even defendant 1 had not asked for enhancement of rent or for eviction and defendant 2, zealous to maintain his verumpattam holding, paid into court much more than what defendant 1 claimed by way of arrears, immediately he got the suit summons. N, written statement in the case and Ext. L, the razi petition. Even defendant 1 had not asked for enhancement of rent or for eviction and defendant 2, zealous to maintain his verumpattam holding, paid into court much more than what defendant 1 claimed by way of arrears, immediately he got the suit summons. Evidently as the subsisting lease deed was of 1074 and even though defendant 2, the assignee of the leasehold attorned to the lessor, no fresh lease deed was executed between them. The plaintiff's case that when defendant 2 wanted a receipt in full acquittance of the rent defendant 2 insisted on a lease being executed directly in his favour is therefore very probable. Whatever that be, no implied authority can be assumed or read into the document (Ext. I) so as to make a renewal ignoring the law governing verumpattom tenures. The statement in Ext. I that whatever defendant 5 does pursuant to the authority will be as valid and binding as defendant 2 himself had done it cannot confer authority on the agent to act in excess of the law. The agreement to sell was on 2.12.1124, the mukthyar in favour of defendant 5 on 10.12.1124 and the renewal was effected on 10.12.1124. Under Exts. A and A(1) the sale deed to plaintiff 1 had to be executed before 15.1.1125 and it was actually executed on 7.1.1125.O.S. 400 of 1122 was compromised on 4.5.1123. Even though Ext. V entitled the landlord to claim enhanced rent after the property was improved that clause was not sought to be enforced in that suit nor at the time of the compromise. The quick succession in which the mukthyar and the renewal followed the agreement to sell, if anything, indicates that defendant 1 was out to steal a march over defendant 2 and even plaintiff 1. Evidently to that end defendant 5 was a convenient tool. Differing therefore from the learned District Munsiff and agreeing with the lower appellate court we hold that Ext. II was executed by defendant 5 in excess of the authority conferred on him by Ext. I and that it cannot therefore bind defendant 2 or his vendees, the plaintiffs. 5. Once the agreement to sell was entered into defendant 2 was in the position of a trustee for the vendee. II was executed by defendant 5 in excess of the authority conferred on him by Ext. I and that it cannot therefore bind defendant 2 or his vendees, the plaintiffs. 5. Once the agreement to sell was entered into defendant 2 was in the position of a trustee for the vendee. He can do only what a prudent owner could do and not impose onerous terms so as to bind the vendee - vide Mulla's Transfer of Property Act, III Edition, pp. 315 and 316, commentary to S.55(1)(e) - under the heading Care of Property. The contention that defendant 1 had no notice of the agreement to sell is of no avail to him to resist the plaintiffs' claim that the renewal did not bind them or the property inasmuch as defendant 1 has not paid any consideration for the renewal. Ext. II shows that the enhancement was effected pursuant to the terms of Ext. V which have been rendered nugatory by the provisions of the Cochin Verumpattamdars Act. The protection given to a bona fide transferee for value without notice is based upon the fact that the transferee has paid cash in all innocence for an apparently good title, but there is no logical reason why a similar protection should be given to a land-lord who takes a gratuitous renewal so as to defeat the provisions of the Verumpattamdars Act - vide the discussion in AIR 1942 Madras 67 at 69. In this view of the matter even if defendant 2 himself had executed a renewal in terms of Ext. II that would not have bound the plaintiffs or their interest over the leasehold. In the argument before us the appellant's counsel laid great emphasis on the fact that plaintiff 1 had admitted in his evidence that before Exts. C and C(1) were executed he knew of the renewal and that therefore having taken the sale deeds with knowledge, the plaintiffs cannot impugn the renewal. We are afraid that it is only a layman's approach to the question. The plaint admits that the plaintiffs had knowledge of the renewal and that they got defendant 2 to agree to Rs. 100/- out of the consideration money to be left in their hands for legal action against defendant 1 to have the renewal declared invalid and inoperative. We are afraid that it is only a layman's approach to the question. The plaint admits that the plaintiffs had knowledge of the renewal and that they got defendant 2 to agree to Rs. 100/- out of the consideration money to be left in their hands for legal action against defendant 1 to have the renewal declared invalid and inoperative. If defendant 2 could not after the agreement effect a gratuitous transfer, to wit a renewal, so as to affect the interest of the person in whose favour the agreement stood, or if defendant 5 exceeded his authority, we fail to see how the plaintiffs' knowledge of the renewal prior to the sale deeds would affect their legal rights. Plaintiff 1 had agreed to purchase the leasehold interest for Rs. 1300. Defendant 2 had agreed to sell and also accepted Rs. 75/- as advance. On the date of the agreement the rent was only Rs. 2-4-5, but under Ext. II it was raised to Rs. 9-9-9. An unauthorised act of defendant II or his mukthyar agent cannot impose onerous terms to the lease so as to affect plaintiff 1 (or plff. 2, his nominee). The lower courts were therefore right in decreeing the plaintiff' suit. The second appeal will therefore stand dismissal with costs.