P.GOVINDA NAIR, P.NARAYANA PILLAI, P.SUBRAMONIAN POTI
body1976
DigiLaw.ai
Judgment :- 1. The validity of a clause in an agreement between a tenant and a landlord by which the tenant undertook to remove the building occupied by him after a period of 3 years from the commencement of tenancy is the matter of controversy in this Second Appeal. Whether such a clause is opposed to public policy in view of the protection given to a tenant under the Kerala Buildings (Lease and Rent Control) Act, 1965 (in short the Act) was considered by the Division Bench to be of sufficient importance to merit consideration of the case by the Full Bench. The case has thus come up before us. 2. The dispute concerns a thatched shop building consisting of 3 rooms situate in a property of 43 cents in Peroorkada which is within the city of Trivandrum. One Sri Pandit was the owner of the property described as A schedule in the plaint, 43 cents in extent. That was purchased from him by the first plaintiff under a sale deed Ext. P1 of the date 3 81961 At that time the Property was outstanding on lease with one Parameswaran Pillai, the deceased father of the first defendant and the brother-in-law of the second defendant. While holding under the lease the said Parameswaran Pillai constructed a shop building therein and occupied it for his business. The said building is the B schedule in the plaint. The right of Parameswaran Pillai devolved on the defendants and the mother of the first defendant. They executed a deed of surrender to the first plaintiff on 30-8-1961 surrendering the lease. Ext. P2 is the copy thereof Defendants 1 and 2 then took the said shop building with the three rooms numbered as T.C. 217,219 and 220 under a rental arrangement This was from the first plaintiff and was on the very date of Ext. P2 surrender of the earlier lease of the property. This building is described as B schedule in the plaint standing in the portion of the A Schedule.43 cents. Under Ext P3 the rent deed, the defendants agreed to pay the first plaintiff rent of Rs. 18/- per annum The term was fixed as 3 years. It was further provided in that agreement" Ext.
This building is described as B schedule in the plaint standing in the portion of the A Schedule.43 cents. Under Ext P3 the rent deed, the defendants agreed to pay the first plaintiff rent of Rs. 18/- per annum The term was fixed as 3 years. It was further provided in that agreement" Ext. P3, that to enable the landlord to construct a new shop building on the site of the rented premises the defendants would remove the building in existence on the expiry of the period of 3 years, that this will be done at their expense, and that on surrendering vacant possession of the site to the first plaintiff one of the rooms in the new building to be constructed by him will be let out to the defendants in the suit. If by reason of the failure of the defendants to demolish the building on the expiry of 3 years hindrance is caused to the construction of the building by the first plaintiff it was agreed that the first plaintiff was free to remove the building after giving two weeks' notice. The term of 3 years fixed under Ext P3 expired. The first plaintiff called upon the defendants to remove the shop building occupied by them. The defendants did not comply Thereupon the suit from which this second appeal has arisen was filed by the plaintiffs second plaintiff being the power of attorney holder of the first plaintiff The plain tiffs aver that by the failure of the defendants to remove the building on the expiry of the period of 3 years and that in spite of demand the plaintiffs hare become entitled to seek removal through court and seek vacant possession of the plot. It is also prayed that the building may be declared as belonging to the plaintiff. The suit was resisted by the defendants. The defence was that there was no voluntary consent by the defendants to the surrender of the earlier lease held by Parameswaran Pillai under Ext. P2 and that Ext P3 rent deed which followed was also without the voluntary consent of the executants It was also pleaded that the provisions of Act 1 of 1964 conferred the benefit of permanency of tenure on the defendants and therefore the plaintiff was not entitled to get any of the reliefs prayed for in the plaint. 3. The suit had a chequered career.
3. The suit had a chequered career. It was originally decreed by the Second Additional Munsiff, Trivandrum by judgment dated 17-2-1967. The right of the first plaintiff to the decree schedule property was declared and the defendants were directed to remove the building within 3 months. The appeal filed by the second defendant against that decree was allowed. The appellate Court, in reversing the decree passed by the learned Munsiff, accepted the contention of the second defendant urged in appeal that there was no valid notice to quit prior to the institution of the suit and also accepted the case that the agreement, Ext. P3, should not be given effect to as the agreement was void for the reason that it purported to waive the right of the tenant under the Act. The plaintiffs took the matter to this court in S. A. 610 of 1968. This court set aside the judgment of the District Court, Trivandrum in appeal since it was noticed that the plea which succeeded before the District Court had not been set up in the pleadings of the defendants. The matter was directed to be considered afresh and the defendants were given an opportunity to amend their written statement. After the suit stood remitted to the District Court such amendment of the pleadings was sought by the second defendant. It was contended by way of amendment of the written statement that the plaintiffs can seek relief in regard to the building in the suit only in accordance with S.11 of the Act and that any provision in the rent deed which infringes the right to the benefit under the said Act ought not to be considered as valid and therefore the plaintiffs would not be entitled to relief. It was also contended that notice under S.106 of the Transfer of Property Act bad not been issued. The District Court allowed the appeal. The appellant before the Court below succeeded in his plea that the provisions of the Buildings (Lease and Rent Control) Act being applicable the provision contained in Ext. P3 to the effect that defendants will have to vacate the building by demolishing the same after the expiry of 3 years from the date of execution of Ext. P3 was a provision which will set at naught the safeguards given to the tenants under S.11 of the Act and such benefit could not be waived.
P3 to the effect that defendants will have to vacate the building by demolishing the same after the expiry of 3 years from the date of execution of Ext. P3 was a provision which will set at naught the safeguards given to the tenants under S.11 of the Act and such benefit could not be waived. The second appeal to this Court was against this judgment. In view of the importance of the question arising for decision in the Second Appeal, our learned brother Balagangadharan Nair J. before whom the case came up referred the case to a Division Bench. V. P. Gopalan Nambiyar J. and T. Chandrasekhara Menon J. before whom the appeal came up have referred this case to the Full Bench. 4. The plea set up in the written statement by the defendants that the surrender of the lease of the land by them under Ext. P2 and the execution of the rent deed, Ext. P3, were not with their free consent was not accepted by the learned Munsiff even in the first instance and that contention is not pursued. If the defendants chose to surrender the leasehold right of the A schedule property voluntarily such surrender would be operative and so would be any fresh arrangement with regard to B schedule that the parties entered into. In this appeal we reed consider only whether the clause in the rent deed, Ext. P3, which obliges the defendants.to demolish the building on the expiry of the term of 3 years and remove the materials of the building at their expense is capable of enforcement in the suit. It is the defendant's case that in effect the term would be one agreeing to surrender the building let out to a tenant, for, according to the defendants the obligation to demolish the building and remove the materials and further to surrender vacant possession of the site would, in essence, be to vacate the tenanted premises. The provisions of the Act are intended to confer immunity from eviction to a tenant except on the specified grounds. That the tenanted premises are those to which the provisions of the Act would apply is not disputed. According to the defendants it is not open to the tenants to waive their statutory right not to be evicted except upon the specified grounds and if Ext.
That the tenanted premises are those to which the provisions of the Act would apply is not disputed. According to the defendants it is not open to the tenants to waive their statutory right not to be evicted except upon the specified grounds and if Ext. P3 is construed as one agreeing to waive such right according to them it is to be so construed the clause would be unenforceable as opposed to public policy. Though not in specific terras the decision of the District Court under appeal seems to have accepted this plea. The suit has been dismissed. 5. The point urged before us by Sri. S. Narayanan Poti, learned counsel for the appellant by way of answer to the case of the defendants may be summarised thus: Ext. P3 evidences a contract of tenancy specifying the period of tenancy as three years. It embodies another contract which provides that on the expiry of the term of 3 years the parties are to be governed by a different relationship. By virtue of such contract the tenant automatically becomes entitled to the building on the expiry of the term of three years with the right to demolish the building and appropriate the materials thereof and by operation of this provision the tenancy comes to an end on the expiry of the term so much so there is no question of the tenant waiving the benefit of the Rent Control legislation. It is agreed by learned counsel that the contract so envisaged in Ext. P3 is liable to be examined by the court to ascertain whether it is bad for any reason such as it being opposed to public policy. The term in Ext. P3 that the tenant was entitled to appropriate the materials of the building after the expiry of the term of three years and the provision enabling the tenant to claim tenancy over one of the rooms of the building to be constructed on the site are, it is said, advantageous to the tenant and hence there is no reason why he should not have honestly agreed to such terms. 6.
6. S.11(1) of the Act reads thus: "Eviction of tenants: (1) Notwithstanding anything to the contrary contained in any other law or contract a tenant shall not be evicted, whether in execution of a decree or otherwise, except in accordance with the provisions of this Act: Provided that nothing contained in this section shall apply to a tenant whose landlord is the State Government or the Central Government or other public authority notified under this Act: Provided further that where the tenant denies the title of the landlord or claims right of permanent tenancy, the Rent Control Court shall decide whether the denial or claim is bonafide and if it records a finding to that effect, the landlord shall be entitled to sue for eviction of the tenant in a Civil Court and such Court may pass a decree for eviction on any of the grounds mentioned in the section, notwithstanding that the Court finds that such denial does not involve forfeiture of the lease or that the claim is unfounded." Sub-section (3) of the Section enables a landlord to apply for an order of eviction on the ground that he bona fide needs the building for bis own occupation or for the occupation by any member of his family dependent on him. Sub-section (4) enumerates 5 other grounds which can be the basis of a claim for eviction of a tenant. There is no case that any of the grounds recognised under S.11 of the Act for eviction of a tenant is available in this case. It is only on the basis of the term in the contract which entitles the tenant to remove the building after the term that the plaintiffs seek relief in the suit. According to Sri. Poti it is open to a contractual tenant to surrender the holding notwithstanding the provisions of the Act. A contractual tenant continuing as tenant after the term specified in the contract would be entitled to protection as a statutory tenant. But a tenant can validly enter into a contract to hold the leasehold property under a. different relationship in the expiry of the term of the lease.
A contractual tenant continuing as tenant after the term specified in the contract would be entitled to protection as a statutory tenant. But a tenant can validly enter into a contract to hold the leasehold property under a. different relationship in the expiry of the term of the lease. If the relationship of the parties was agreed to be governed by a fresh arrangement it is open to the court to recognise and enforce such arrangement unless the court has reason to find that the arrangement has been reached only as a device to get over the provisions of the Act. That a tenant can surrender the premises leased out to him admits of no doubt. It is also open to him to enter into a fresh arrangement. It also seems to be beyond controversy that a court is entitled to examine an arrangement under which a surrender and a fresh contract is pleaded to ascertain whether it is only a make belief and really the parties continue to be governed by the same relationship. After a term of 3 years the defendants here could have very well surrendered the building. They could then have agreed to the removal of the building and could have also agreed to the condition that when the new building was put up by the landlord one of the rooms would be let out to them. The actual surrender by the tenant would be unobjectionable if in fact the understanding was one really of surrender and a fresh arrangement. 7. In the leading, case on the topic Foster v. Robinson 1951 (1) L.R. (KB) 149 a cottage was taken on rent from the plaintiff by a workman in the farm, who when he became unfit for further work in the farm by reason of bis age and infirmity was told by the plaintiff that the building may be occupied by him free or rent for his lifetime and the existing tenancy would cease. This offer was accepted by the tenant. He lived in the cottage till his death along with his daughter. On his death the daughter claimed to remain in the cottage as a tenant. In the proceedings by the plaintiff to recover possession the question that arose was whether the earlier tenancy had terminated and the further question was whether the Rent Restrictions Act applied.
He lived in the cottage till his death along with his daughter. On his death the daughter claimed to remain in the cottage as a tenant. In the proceedings by the plaintiff to recover possession the question that arose was whether the earlier tenancy had terminated and the further question was whether the Rent Restrictions Act applied. The case for the defendant was that the transaction relied upon by the landlord was aimed at contracting out of the Rent Acts by doing an act meant to circumvent the provisions of the said Acts. The court noticed that in the case of a rent controlled house there must be either actual yielding up of possession, or its equivalent, by the tenant, or an order against the tenant which the court has power to make. Those are the only two ways in which the protection of the Acts can be lost. If the tenant had actually surrendered possession either expressly or impliedly and agreed to continue as licensee that would enable the plaintiffs to succeed. Evershed M. R., dealing with this question, said: "If there is a new arrangement which the tenant is asserting by his conduct, then he is estopped from denying that the landlord was capable of entering into that new arrangement; and, if the new arrangement could not be entered into while the old agreement subsisted, it follows that the tenant is equally prevented from denying that the old agreement has gone. There was some argument in regard to the proper conclusion, as a matter of law, to be drawn from the transaction. It is divided into more than one section. First of all it was said that in May, 1946, the existing tenancy ceased. Then comes the second question: what took its place? The answer is: the arrangement that the. landlord would charge him no more rent and that he would live in the cottage for the rest of his days rent free. My own conclusion from that statement of the facts is that the old tenancy was extinguished by the creation in us place of a licence for the tenant to occupy the cottage without any payment of rent for the rest of his days." The same rule applies to the case of a statutory tenant (vide Collins v. Claughton,1959 (1) WLR.145. The decision in Turner v. Watts (1928) 44 TLR.
The decision in Turner v. Watts (1928) 44 TLR. 337 was one where in an agreement by the tenant to purchase the premises occupied by him an implied surrender was found on the facts. 8. The rule in Foster v. Robinson 1951 (1) L.R. (K. B.) 149 may have no application as such to the case before us since the case is not that there was a surrender of the lease implied by the terms of Ext. P3 but that on the expiry of the term the tenancy terminated and the parties were no longer governed by the relationship of landlord and tenant. Normally by efflux of the period of the lease such lease would terminate. If simultaneous with such termination a fresh relationship arises between the parties they would be governed by the obligations arising out of such relationship thereafter. The landlord was not entitled to claim rent for the building after the term of 3 years nor was the tenant liable to pay such rent since, on the terms of Ext. P3, the building no longer belonged to the landlord. The lease having come to an end on the expiry of three years and the landlord having ceased to be the owner of the building simultaneously, the obligation of the parties thereafter arose not under any tenancy, contractual or statutory but under the specific terms provided for in Ext. P3. Surrender of the right under the lease does not arise in such circumstances. If there is no impediment in law in the parties agreeing to an arrangement such as that in Ext. P3 there is no scope for contending that the tenancy subsisted after the term of 3 years. Just as it is open to a tenant to surrender the leasehold impliedly and continue in occupation as a licencee as in Foster's case, a lessee could be governed by a different relationship after the term of the lease. That has happened in this case. We sea good reason to accept the appellant's plea that on the terms of Ext. P3 the tenancy came to an end by the end of the term and in view of the new relationship voluntarily agreed to between the parties in Ext P3 there is no scope for holding that there was any tenancy' contractual or statutory, thereafter.
We sea good reason to accept the appellant's plea that on the terms of Ext. P3 the tenancy came to an end by the end of the term and in view of the new relationship voluntarily agreed to between the parties in Ext P3 there is no scope for holding that there was any tenancy' contractual or statutory, thereafter. If so the provisions of the Buildings (Lease and Rent Control) Act, 1965 does not arise for application. The suit is one seeking reliefs on the basis of the terms in Ext. P3 to demolish and remove the building in the property. 9. The next question we are called upon to examine concerns the validity of the clause in Ext. P3. We have already adverted to S.11 of the Act. Under S.23 of the Indian Contract Act an agreement is void if the objector consideration is unlawful. It would be unlawful if it is opposed to public policy. This necessarily calls for an enquiry as to what is public policy in this context. In view of the very exhaustive discussion of this question by the Supreme Court in the recent decision in Murlidhar Aggarwal v. State of U. P. 1974 (2) S.C.C. 472 it is sufficient to advert to this decision for the purpose of this case. S.3(1) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947 restricted the right to sue for eviction from any accommodation without the permission of the District Magistrate from any accommodation except on one or more of the specified grounds. The lease deed entered into between the landlord and the tenant provided that the parties agreed and declared that no party will ever claim the benefit of the Rent Control and Eviction Act and the provisions of the said Act have been agreed by mutual consent to be - inapplicable to the deed. It is in this context that S.3 (1) of the U. P. (Temporary) Control of Rent and Eviction Act, 1947 had to be considered. The learned judge observed "The object of legislature in enacting the law was to protect tenants from greedy and grasping landlords, and from their resorting to court for eviction of tenants without reasonable grounds." Relying open the decision in Lachoo Mal v. Radhey Shyam (1971) 3 SCR.
The learned judge observed "The object of legislature in enacting the law was to protect tenants from greedy and grasping landlords, and from their resorting to court for eviction of tenants without reasonable grounds." Relying open the decision in Lachoo Mal v. Radhey Shyam (1971) 3 SCR. 693 it was contended by the appellants in that case that it was open to the respondent to waive the benefit of the provision of S.3 as it was enacted for the benefit of tenants and that no question of public policy is involved. The learned judge said "In that case this Court was considering the question whether it was open to a landlord to waive the benefit of a provision enacted for the benefit of landlords under the Rent Control Act. This Court said that if a provision is enacted for the benefit of a person or class of persons, there was nothing which precludes him or them from contracting to waive the benefit, provided that no question of public policy was involved." Mathew J. proceeded to state thus: "There can be no doubt about the policy of the law, namely, the protection of a weaker class in the community from harassment of frivolous suits. But the question is, is there a public policy behind it which precludes a tenant from waiving it?." What is public policy was discussed by the learned judge in the following paragraphs of the judgment: "30. "Public Policy" has been defined by Winfield as "a principle of judicial legislation or interpretation founded on the current needs of the community." Now, this would show that the interest of the whole public must be taken into account; but it leads in practice to the paradox that in many cases what seems to be in contemplation is the interest of one section only of the public, and a small section at that. The explanation of the paradox is that the courts must certainly weigh the interests of the community as well as the interests of a considerable section of it, such as tenants, for instance, as a class as in this case. If the decision is in their favour, it means no more than that there is nothing in their conduct which is prejudicial, to the nation as a whole. Nor is the benefit of the whole community always a mere tacit consideration.
If the decision is in their favour, it means no more than that there is nothing in their conduct which is prejudicial, to the nation as a whole. Nor is the benefit of the whole community always a mere tacit consideration. The courts may have to strike a balance in express terms between community interests and sectional interest. So, here we are concerned with the general freedom of contract which everyone possesses as against the principle that this freedom shall not be used to subject a class, to the harassment of suits without valid or reasonable grounds. Though there is considerable support in judicial dicta for the view that courts cannot create no (sic) new heads of public policy, there is also no lack of judicial authority for the view that the categories of heads of public policy are not closed and that there remains a broad field within which courts can apply a variable notion of policy as a principle of judicial legislation or interpretation founded on the current needs of the community. 31. Public policy does not remain static in any given community. It may vary from generation to generation and even in the same generation. Public policy would be almost useless if it were to remain in fixed moulds for all time. 32. If it is variable, if it depends on the welfare of the community at any given time, how are the courts to ascertain it? The Judges are more to be trusted as interpreters of the law than as expounders of public policy. However, there is no alternative under our system but to vest this power with Judges. The difficulty of discovering what public policy is at any given moment certainly does not absolve the judges from the duty of doing so. In conducting an enquiry, as already stated, judges are not hide-bound by precedent. The Judges must look beyond the narrow field of past precedents, though this still leaves open the question, in which direction they must cast their gaze. The judges are to base their decision on the opinions of men of the world, as distinguished from opinions based on legal learning.
The Judges must look beyond the narrow field of past precedents, though this still leaves open the question, in which direction they must cast their gaze. The judges are to base their decision on the opinions of men of the world, as distinguished from opinions based on legal learning. In other words, the judges will have to look beyond the jurisprudence and that in so doing, they must consult not their own personal standards or predilections but those of the dominant opinion at a given moment, or what has been termed customary morality. The Judges must consider the social consequences of the rule propounded, especially in the light of the factual evidence available as to its probable results. Of course, it is not to be expected that men of the world are to-be subpoenaed as expert witnesses in the trial of every action raising a question of public policy. It is not open to the judges to make a sort of referendum or hear evidence or conduct an inquiry as to the prevailing moral concept. Such an extended extra judicial enquiry is wholly outside the tradition of courts where the tendency is to 'trust the judge to be a typical representative of his day and generation'. Our law relies, on the implied insight of the judge on such matters. It is the judges themselves, assisted by the bar, who here represent the highest common factor of public sentiment and intelligence. No doubt, there is no assurance that judges will interpret the mores of their day more wisely and truly than other men. But this is beside the point. The point is rather that this power must be lodged somewhere and under our constitution and laws, it has been lodged in the judges and if they have to fulfil their function as judges, it could hardly be lodged elsewhere." In the light of this discussion the court concluded that S.3 of the Act was based on public policy. It was intended to protect the weaker section of the community with a view to ultimately protecting the interest of the community in general by creating equality of bargaining power. The court found that the respondent could not have waived the benefit of the provision. 10.
It was intended to protect the weaker section of the community with a view to ultimately protecting the interest of the community in general by creating equality of bargaining power. The court found that the respondent could not have waived the benefit of the provision. 10. The question of the validity of compromises in litigations between landlords and tenants have very often arisen for consideration by courts in the context of pleas by the tenants that by the compromise the tenant has purported to waive his right to the benefit of the Rent Control Legislation and that would be opposed to public policy. Even where the landlord could succeed ultimately on the merits of his petition or suit for eviction it is likely that a compromise is entered into to avoid the risk of protracted litigation. It cannot be said that in such a case the eviction of a tenant was possible only by reason of the agreement. The scope of examination by a court of a compromise is considered by the Supreme Court in this background in Roshan Lal v. Madan Lal 1975 SC. 2130. Untwalia J., speaking for the court said thus: 'In order to get a decree or order for eviction against a tenant whose tenancy is governed by any Rent Restriction or Eviction Control Act the suitor must make out a case for eviction in accordance with the provisions of the Act. When the suit is contested the issue goes to trial. The court passes a decree for eviction only if it is satisfied on evidence that a ground for passing such a decree in accordance with the requirement of the, Statute has been established. Even when the trial proceeds ex parte, this is so. If, however parties choose to enter into a compromise due to any reason such as to avoid the risk of protracted litigating expenses, it is open to them to do so. The Court can pass a decree on the basis of the compromise. In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law. In other words, parties cannot be permitted to have a tenant's eviction merely by agreement without anything more.
The Court can pass a decree on the basis of the compromise. In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law. In other words, parties cannot be permitted to have a tenant's eviction merely by agreement without anything more. The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord, in the circumstances, is entitled to have such a decree under the law. xx xx xx xx If the agreement or compromise for the eviction of the tenant is found, on the facts of a particular case, to be in violation of a particular Rent Restriction or Control Act, the Court would refuse to record the compromise as it will not be a lawful agreement. If on the other hand, the Court is satisfied on consideration of the terms of the compromise and, if necessary, by considering them in the context of the pleadings and other materials in the case, that the agreement is lawful, as in any other suit, so in an eviction suit the Court is bound to record the compromise and pass a decree in accordance therewith. Passing a decree for eviction on adjudication of the requisite facts or on their admission in a compromise, either express or implied, is not different." 11. It may be useful in this context to advert to the decision of the Supreme Court in Cherulal Parakh v. Mahadeodas AIR. 1959 SC. 781. Subba Rao J., speaking for the Bench, has very exhaustively considered the decisions of English Courts dealing with the rules of public policy. At para 22 of the judgment, the learned judge observes "The observations of the aforesaid law Lords define the concept of public policy and lay down the limits of its application in the modern times. In short, they state that the rules of public policy are well settled and the function of the Courts is only to expound them and apply them to varying situations. While Lord Atkin does not accept Lord Halsbury's dictum that the categories of public policy are closed, he gives a warning that the doctrine should be invoked only in clear eases in which the harm to the public is substantially incontestable.
While Lord Atkin does not accept Lord Halsbury's dictum that the categories of public policy are closed, he gives a warning that the doctrine should be invoked only in clear eases in which the harm to the public is substantially incontestable. Lord Thankerton and Lord Wright seem to suggest that the categories of public policy are well settled and what the Courts at best can do is only to apply the same to new set of circumstances. Neither of them excludes the possibility of evolving a new head of public policy in a changing world, but they could not conceive that under the existing circumstances any such head could be discovered". Summarising the doctrine of public policy the learned judge, in Para.23 of the judgment, observes "Public policy or the policy of the law is an illusive concept; it has been described as "untrustworthy guide", "variable quality", "uncertain one", "unruly horse", etc; the primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contracts which form the basis of society, but in certain cases, the Court may relieve them of their duty on a rule founded on what is called the public policy; for want of better words Lord Atkin describes that something done contrary to public policy is a harmful thing, but the doctrine is extended not only to harmful cases but also to harmful tendencies; this doctrine of public policy is only a branch of common law, and, just like any other branch of common law, it is governed by precedents; the principles have been crystallized under different heads and though it is permissible for Courts to expound and apply them to different situations, it should only be invoked in clear and incontestable cases of harm to the public; though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads in these days." Reference may also be made to the observations of Asquith L. J., in Monkland v. Jack Barclay Ltd., 1951 (I) All.
E.R. 714 which passage has been quoted in Para.23 of the Supreme Court Judgment: "The courts have again and again said, that where a contract does not fit into one or other of these pigeon-holes but lies outside this charmed circle, the courts should use extreme reserve in holding a contract to be void as against public policy, and should only do so when the contract is incontestably and on any view inimical to the public interest." 12. There is no reason to start with an assumption that a contract offends public policy and therefore ought not to be enforced. Prima facie a contract is good and ought to be enforced. The doctrine of public policy should be invoked only in clear and uncontestable cases of harm to public interest. If a contract could be read as not necessarily against public policy it need not be invalidated. The rule of public policy is not really intended to fetter the freedom of contract. It may be open to a landlord to ask the tenant which of the two options he desires to make. He could be told that he could continue as a tenant on payment of particular rent or that he could be a tenant for 3 years whereafter he will have the benefit of removing the materials of the building occupied by him and further the benefit of tenancy of a room in the new building to be constructed by the landlord. It is open to the tenant to say that he would rather prefer the latter as it is more advantageous to him. In that event it would not be a case where he enters into an agreement to waive the benefit of the provisions of the Act. May be in course of time he may desire to go back upon his earlier agreement. But that will not be determinative of the issue. There may be genuine contract entered into by parties without any intention or purpose to defeat or avoid the provisions of the Act or waiving the provisions of the Act just as there may be contracts really for avoiding the provisions of the Act. What is the real position in a given case must ultimately depend upon the appreciation of the facts and circumstances. If so this is a fact to be pleaded and proved.
What is the real position in a given case must ultimately depend upon the appreciation of the facts and circumstances. If so this is a fact to be pleaded and proved. Though the second defendant was given an opportunity to amend the pleadings by the judgment of this Court and the matter was remitted to the District Court and though the defendant actually amended his written statement the plea raised by the amendment is only that the condition in Ext. P3 would be inoperative in the face of the provisions in the Act. There is no specific plea much less proof that the term in Ext. P3 to demolish the buildings and to remove the materials was intended to defeat the provisions of the Act. On the materials before us and in the nature of the provisions contained. in Ext. P3 assessed in the light of the pleadings and the evidence in this case we are unable to find the term in Ext. P3 which, as we have stated, is not one to surrender the lease, is in any way opposed to public policy. The suit cannot be defeated on that plea. In this view the plaintiffs are entitled to succeed. The decision of the court below is vacated and the decision of the trial court is confirmed. The Second Appeal is allowed. Parties are directed to suffer costs here and in the courts below. Allowed.