JUDGMENT : R.N. Misra, J. - Legal Representatives of the original Plaintiff have carried this appeal against the judgment and decree of the learned subordinate Judge at Berhampur dismissing the suit for declaration of title, recovery of possession or in the alternative for specific performance of contract of renewal of lease with regard to the suit pans existing on the disputed property. Plaintiff had also prayed for mesne profits, damages and recovery of possession of a pump house. The suit was filed on 15-12-1970. 2. Plaintiff alleged that 24.75 acres of land in dispute formed part of 85-61 acres of land as described in Schedule-A out of which 43.28 acres of land was his ancestral property and the remainder had been acquired under three registered sale deeds being Exts. 1, 2 and 3 dated 29-7-1925, 4-1-1926 and 16-2-1920 respectively. In a family partition of 1938 (Ext. 25), there were certain adjustments made and Plaintiff became owner of the property for which he filed the suit. Plaintiff alleged that he, and before him his ancestors, had been manufacturing salt on the property upto 1926 under the monopoly system. In that year, a new scheme was introduced which came to be known as the "Modified Excise System". Under this scheme, Plaintiff had to execute a lease for manufacture of salt and that lease was for a period of 17 years from 1-1-1926 (Ext. 4). While the lease under Ext. 4 was In force, there was a partition in the family and Plaintiff was allotted the disputed property. The factum of partition and allotment of the disputed property to the Plaintiff was communicated to the authorities and was accepted by them. In due course, a separate lease was granted in favour of the Plaintiffs for the remaining period of the original lease. The earlier lease was for the entire property having an extent of 85-61 acres but in 1939, the Plaintiff's lease, however, was confined to the area of 24.75, acres. After the lapse of that lease (Ext. 4) as modified by Exts. 26 and 27(a), a fresh lease was granted under Ext. 5 for a period of 25 years in favour of the Plaintiff expiring on 31-12-1967. In the lease deed (Ext. 7), there was a stipulation for renewal for a further period of 25 years. Ext. 8 which is the licence granted to the Plaintiff also made provision for renewal. Ext.
26 and 27(a), a fresh lease was granted under Ext. 5 for a period of 25 years in favour of the Plaintiff expiring on 31-12-1967. In the lease deed (Ext. 7), there was a stipulation for renewal for a further period of 25 years. Ext. 8 which is the licence granted to the Plaintiff also made provision for renewal. Ext. 7 was to expire on 31-12-1967 and Plaintiff applied for renewal on 9-1-1967 (Ext. 10(a)), long before the four months period stipulated in Ext. 44, ran out. As the renewal was not granted, Plaintiff preferred an appeal and a revision before the departmental superiors and ultimately filed the suit on 15-12-1970 impleading Defendants 1 to 6 being the Union at India and Its Officers and Defendant No. 7 being the new lessee. 3. Defendants 1 to 6 took a common stand in two separate written statements. They denied Plaintiff's title to the property and pleaded that by accepting a lease' from the. Government, Plaintiff was estopped from asserting title in himself. They further contended that Plaintiff was not entitled to ask for renewal as of right. Plaintiff had inducted a third person into the leasehold (his son being Defendant No. 8) without authority and in contravention of the terms of the lease and it amounted to breach of Clause 11 of the Lease Deed. Defendant No. 7, the new lessee, maintained that it was a Co-operative Society and in terms of the Government of India's declared policy that salt pans should be worked out through Cooperative Societies, it maintained that the lease in its favour was a valid one and specific performance should not be granted as the Society was a bona fide lessee without notice of any right of renewal In favour of the Plaintiff. Defendant No. 8, one of the sons of the Plaintiff, did not dispute the claim in the suit. 4. During the pendency of the suit, the Plaintiff died and the legal representatives were substituted. At the trial, two witnesses were examined for the Plaintiffs and one for Defendants 1 to 6 and another was examined for Defendant No. 7. Several documents were exhibited on either side. The trial Court dismissed the suit finding that the Plaintiffs had failed to establish title and the renewal clause in the lease deed (Ext. 7) was not enforceable in Court. 5.
Several documents were exhibited on either side. The trial Court dismissed the suit finding that the Plaintiffs had failed to establish title and the renewal clause in the lease deed (Ext. 7) was not enforceable in Court. 5. Two questions arise for consideration in the appeal: (i) Whether Plaintiffs have title to the property? and (ii) whether Plaintiffs are entitled to enforce the terms of renewal? 6. Plaintiffs have led no clear evidence regarding origin of their title Admittedly Ext. 4 was lease deed executed by the original Plaintiff, in the year 1926. The terms of this document ran counter to the Plaintiffs' claim of proprietary right in the property In clause of the Lease Deed, Gouranga, the original Plaintiff, undertook: On the expiry of the lease or its sooner determination as provided in Clause (1) supra or Clause (23) infra, the lease shall leave the demised premises in such order as is consistent with the due performance of this lease with all works erected or made thereon as they are, provided that any machinery in his possession may be removed but shall not be entitled to any compensation for any expenditure that he may have incurred in respect of salt works or to any damage if the pans are resumed and the lessee deprived of the right to manufacture salt in the demised premises under any circumstances whatsoever. In Clause 3, It was further stipulated: (a) The lessee shall utilise the land hereby demised exclusively for the manufacture, storage and sale of salt and for the words connected therewith and shall not erect any dwelling houses thereon or remove any brine in its unmanufactured state therefrom. (b) The lessee shall pay compensation to the old holders of the demised land for proprietary rights, if any, claimed and established by them. Clause 5 of the Lease Deed read as follows: The lessor reserves to himself the right to any quarries mines, veins and beds of coal, lead, stone, flagor other minerals in or on the leased land with liberty to himself and his employees to enter and search for such minerals and to dig and carry them away doing as little damage to the lessee's works and' interfering as little with his liberty as possible. These and several other terms in the lease deed go a long way to establish that Gouranga had no proprietary right in the property. Ext.
These and several other terms in the lease deed go a long way to establish that Gouranga had no proprietary right in the property. Ext. 5 is the next lease deed of 1943. The terms thereof are similar to Ext. 4 in Ext. 7, which is the latest lease of 1160, it had been provided: 11. Except with the written consent of the lessor first obtained the lease shall not assign, underlet or part with the possession of the leased land or any portion thereof and shall not transfer by way of sale, gift or otherwise the demised premises, provided that nothing herein contained shall prevent the lessee at any time from taking any partner or partners into the business carried on by him under the present lease, after obtaining the previous approval of the Salt Commissioner or of the Authorised Officer. In the absence of any positive evidence regarding Plaintiffs' title, the learned Subordinate Judge was justified, in relying on these documents to show that the original Plaintiff had accepted the title of the Government of India in the property and, therefore, the claim by the legal representatives in respect of title to the property was not sustainable. Nothing has been shown to us at the time of hearing of the appeal which would justify a contrary conclusion. In fact, Mr. Mohanty, for the Appellants at one stage conceded that there was no positive material for establishing claim of title to the property and, was not in a position to persuade us to differ from the learned Subordinate Judge on this issue. We, therefore, affirm the finding of the learned Subordinate Judge that the Plaintiffs have no title to the property and are not entitled to claim recovery of possession on the basis of title. 7. The other relief claimed in the suit is for specific performance of the renewal clause In the lease deed. We proceed to examine that claim. The renewal clause in Ext.
7. The other relief claimed in the suit is for specific performance of the renewal clause In the lease deed. We proceed to examine that claim. The renewal clause in Ext. 7 provided: The lease shall be for a period of 9 years 3 months commencing from 1-10-1958 to 31-12-1967 and renewable for a further period of twentyfive years on such terms and condition as the Government of India may prescribe from time to time, provided always that the Salt Commissioner on behalf of the lessor of the lessee shall be at liberty to determine the lease on giving to either of them notice in writing at the close of the salt manufacturing season. According to the Plaintiffs the renewal clause conferred a right on them to exercise option of renewal and once it was exercised the Defendant were obliged to grant renewal of it. On the other hand, Defendants have taken the stand that no right of renewal was conferred by the clause and all that was stipulated was that the lease was capable of being renewed. In Ext. 24, which is an application dated 6-1-1968 by the original Plaintiff to the Salt Commissioner, it was categorically stated: While the discretion for renewal of the lease is with you. I am sure you would be kind enough to consider my hardship and take the facts stated above into consideration and allow renewal. The renewal clause did not provide a clear option for the Plaintiffs to exercise. The stand taken by Gouranga in Ext. 24 supports the defence contention that even the original Plaintiff knew that there was no right of renewal as such and grant of renewal was in the discretion of the lessor. The Defendants had contended before the trial Court that the renewal clause was uncertain and vague and, therefore, Plaintiffs could not claim renewal in Court by asking for enforcement of the term. The trial Court accepted that objection. Mr. Mohanty for the Plaintiff-Appellants contends relying on a decision of the Calcutta High Court in the case of Secretary of State v. Digambar Nanda and Ors. AIR 1919 Cal 620, that the terms of renewal in the instant case was not uncertain and vague and was specifically enforceable.
The trial Court accepted that objection. Mr. Mohanty for the Plaintiff-Appellants contends relying on a decision of the Calcutta High Court in the case of Secretary of State v. Digambar Nanda and Ors. AIR 1919 Cal 620, that the terms of renewal in the instant case was not uncertain and vague and was specifically enforceable. In the Calcutta case, the lease contained the following covenant: If you agree to pay the enhanced rent which will be fixed at the time of resettlement in future, the Government will have the right to settle with you, and if you decline, with some other person. The Court observed: There can be no room for reasonable doubt that the clause in the lease set out above embodied in essence a covenant for renewal. In the absence of such a clause the grantor would have been at liberty on the expiry of the term of the lease, to settle the land on any terms with any person he might choose; hence, if the constructions were accepted that the clause was intended merely to reserve liberty to the Government to make a resettlement with the lessee at enhanced rent, it would be obviously superfluous. It is not necessary for our present purpose to determine whether, notwithstanding this clause in the lease, the Government might not, on the expiry of the term, decide not to settle the lands with anybody. This much is plaint that if the Government did decide to re-settle the lands, the first offer would have to be made to the settlement-holder whose term had expired and a settlement would have to be made with him if be should agree to pay the enhanced rent; in other words, he had the option of refusal.... Reliance has also been placed on certain other decisions including an unreported Bench decision of the Andhra Pradesh High Court in Writ Appeal No. 514 of 1969 disposed, of on 20th of October, 1971. In the Writ Appeal, the very renewal clause contained, in Ext. 7 was the subject-matter of interpretation. One of the questions that arose for consideration was whether the lessee was entitled to renewal of the lease in terms of the clause.
In the Writ Appeal, the very renewal clause contained, in Ext. 7 was the subject-matter of interpretation. One of the questions that arose for consideration was whether the lessee was entitled to renewal of the lease in terms of the clause. The only distinction found in the two clauses is while the clause in the present litigation specifies the further term of renewal to be of twentyfive, years, in the Andhra Pradesh case there was no mention of the period. The Court observed: ...On account of the omission to mention the number of years of renewal, it is contened on behalf of the Appellants herein that the Respondents are not entitled as a matter of right for renewal, but that contention was negatived by our learned brother, and, we are of the view that our learned brother is right in rejecting the contention of the Appellants herein. The Court then proceeded to say: We are now called upon to interpret the language employed in Clause (1) of the lease. That lease was for a period of 9 years 3 months. That was agreed to as per the recital portion contained in the lease deed. What was further agreed to is as regards the renewal too. That it should be renewed must be taken to have been agreed to, but the period of renewal was not specified and the space was left blank. And if no period was fixed, but if the renewal was agreed to, then the period of renewal shall have to be same as the period of lease wherein the Clause for renewal is contained but the power is retained with the Government of India to subject the grant of renewal to such terms and conditions as they may prescribe from time to time. But, that cannot be construed as clothing them with the power to deny to the lessees the right itself to have the lease renewed. It is not the case of the Government that they have prescribed any terms and conditions. The intention of the parties to have r the lease renewed, we have already stated, is discerbible hem Clause (1).... We are fortified in the correctness of our Interpretation by a decision rendered in Secretary of State v. Forbes 1912 17 I.C.F. 180.
It is not the case of the Government that they have prescribed any terms and conditions. The intention of the parties to have r the lease renewed, we have already stated, is discerbible hem Clause (1).... We are fortified in the correctness of our Interpretation by a decision rendered in Secretary of State v. Forbes 1912 17 I.C.F. 180. Sir Ashutosh Mookerjee speaking Bench, observed at page 183 of the Report, thus: In so far as the second question is concerned; it has been argued on behalf of the Crown that as the instrument does not specify the terms on which the lease was to be renewed, the lessee could not claim renewal on the same terms as before. This contention, in my opinion, is fallacious. In the first place a lease which creates a tenancy for a term of years, as in the present case, may yet confer on the lessee an option of renewal.... In the fourth place, if the option does not state the terms of renewal, the new lease will be for the same period and on the same terms as the original lease, in respect of all the essential conditions thereof, except as to the covenant for renewal itself.... In the absence of there being anything stated contra in the lease deed, the option shall have to be exercised by the lessee, but after the option is exercised the new lease shall have to be for the same period and on the same terms as the original lease in respect of the essential conditions thereof.... The learned Judges thereafter referred to some passages from Halsbury's Laws of England, distinguished the ratio of a Bench decision of the Madhya Pradesh High Court Hitkarini Sabha, Hitkarini Sabha Vs. Corporation of the City and Another and held that the lessee was entitled to renewal. The Andhra Pradesh decision thus squarely helps the Plaintiffs' stand. Defendants on the other hand placed reliance on Bench decision of the Calcutta High Court in the case of Rajani Kanta Mukherjee and Ors. v. Yusuf Ali and Ors. AIR 1917 Cal. 249, where the Kabuliyat stipulated that a fresh settlement on the expiry of the lease was to be "according to the terms on which the lessors wish to lease it out in future".
v. Yusuf Ali and Ors. AIR 1917 Cal. 249, where the Kabuliyat stipulated that a fresh settlement on the expiry of the lease was to be "according to the terms on which the lessors wish to lease it out in future". The Calcutta High Court took the view: ...The terms, being undefined and depending upon the will of the lessor, cannot be enforced.... In the case of Hitkarini Sabha, Jabalpur v. Corporation of the City of Jabalpur and Anr., the renewal clause ran thus: The lessee shall, on expiry of the period of this lease be entitled to have the same renewed on such terms and conditions as may be agreed to between the parties. ...There is a renewal clause which has been already quoted above. The lesee is entitled for renewal on such terms and conditions as may be agreed to between the parties'. It appears to us that the clause is uncertain and vague and does not, form a valid contract for renewal of the lease. Normally in a covenant for renewal there is an express agreement that the lease would be continued on the same terms and conditions subject to a reservation that the rent may be enhanced under certain circumstances. In the instant case, all the terms and conditions have been left to the agreement of parties which may not take place at all. Although a renewal is contemplated, no terms on which it can be granted have been fixed between the parties. u/s 29 of the Indian Contract Act such a contract cannot be enforced. If has been held in Ramasami v. Rajagopala I.LR Mad. 200 that a lease whereby a tenant agreed to pay whatever rent the landlord might fix was void for uncertainty. It is true that if the lease deed contains a covenant of renewal without anything more, the presumption is that the lease would be renewed on the same terms and conditions and for the same period as the original lease. See Secretary of State v. A.H. Forbes 16 C.L.J. 217 and Rasul Gazi v. Abdul Jalik Khan 33 Ind Cas 450 : AIR 1917 Cal 526. However, this is not the position in the instant case. By express recital the matter has been left to the agreement of the parties which makes the clause void for uncertainty.
See Secretary of State v. A.H. Forbes 16 C.L.J. 217 and Rasul Gazi v. Abdul Jalik Khan 33 Ind Cas 450 : AIR 1917 Cal 526. However, this is not the position in the instant case. By express recital the matter has been left to the agreement of the parties which makes the clause void for uncertainty. Reliance has also been placed on an unreported decision of the Madras High Court in Writ Petition No. 2571 of 1979 disposed of on 26th August, 1969 The learned Chief Justice speaking for the Court observed: ...The Petitioner does not contend that he is entitled to renewal as a matter of right but says that before it is refused it must appear that the licensing authority had applied its mind and should give reasons. But, so far as the renewal of the lease is concerned, as we said, it is a contract, and, there is no' right to renewal as a matter of statutory right. Such a right does not flow from Rule 102 read with the lease. It follows, therefore, that there is no obligation on the part of the Government to automatically renew. The Madras decision has no bearing on the point. Having examined the matter with some amount of care, we are inclined to agree with the counsel for the Appellants that there is a right of renewal in the agreement and the renewal clause is not bad for vagueness or uncertainty. Section 29 of the Contract Act does not operate as a bar for its enforcement. The observation of the Supreme Court in the case of Damodhar Tukaram Mangalmurti and Others Vs. The State of Bombay that the renewal clause running to the following effect: Subject to such fair and equitable enhancement the lessor shall determine. was not vague and bad, does support Mr. Mohanty's stand. 8. Three other contentions have been raised by the Respondents against the claim advanced by the Plaintiffs, namely: (i) There is no evidence that Plaintiffs ready and willing to perform their part of the contract and as such they should not be entitled to the relief of specific performance.
was not vague and bad, does support Mr. Mohanty's stand. 8. Three other contentions have been raised by the Respondents against the claim advanced by the Plaintiffs, namely: (i) There is no evidence that Plaintiffs ready and willing to perform their part of the contract and as such they should not be entitled to the relief of specific performance. (ii) The suit was filed belatedly and on account of the long delay relief to the Plaintiffs which is essentially equitable should not be granted; and (iii) Defendant No. 7 is a bonafide lessee without notice and, therefore, by grant of specific performance, the lease in favour of Defendant No. 7 should not be interfered with. 9. Plaintiffs in paragraph 12 of the plaint had categorically pleaded: ...The Plaintiff is always ready and willing to perform his part. There is no categorical denial in the written' statements. In the case of Ardeshir H. Mama v. Flora Bassoon AIR 1928 P.C. 208 , the Judicial Committee observed: In a suit for specific performance on the other hand, he treated and was required by the Court to treat the contract as still subsisting. He had in that suit to allege, and if the fact was traversed, he was required to prove a continuous readiness and willingness, from the date of the contract to the time of the hearing, to perform the contract on his part Failure to make good that averment brought with it the inevitable dismissal of his suit.... This has been clearly approved on several occasions by the Supreme Court. This being the position, in the absence of any traverse In the written statement of the plea taken in paragraph 12 of the plaint and added to it in view of the evidence of one of the Plaintiffs in Court, we do not think, there is merit in this objection. 10. The previous lease ended on 31-12-1967. Defendant No. 7 was put in possession persuant to a new lease on 1-1-1968 Plaintiff waited till 15-12-1970 to institute the suit. The suit has thus been filed about three years after the lease expired and Defendant No. 7 started operating the salt pans.
10. The previous lease ended on 31-12-1967. Defendant No. 7 was put in possession persuant to a new lease on 1-1-1968 Plaintiff waited till 15-12-1970 to institute the suit. The suit has thus been filed about three years after the lease expired and Defendant No. 7 started operating the salt pans. It may be that the original Plaintiff was asking for relief before the departmental authorities, but once the lease had been granted in favour of Defendant No. 7 and was being worked out, we do not think, there is justification for condonation of delay of about three years from the date the cause of action arose The delay is indeed a very speaking feature against the Plaintiffs. 11. There does not seem to be any acceptable evidence about Defendant No. 7 knowing about the existence of the renewal clause. The seventh Defendant is a Co-operative Society represented by one of its members and is a bonafide lessee not aware of any binding covenant for renewal of Plaintiffs' lease. In its own right, the Co-operative Society has taken over and has been working out the suit pans. In fact, by now the lease in favour of Defendant No. 7 is about eleven years' old. To grant specific performance at this stage would be wholly inequitable and would prejudice Defendant No. 7 beyond repair. We are, therefore, not inclined to decree specific performance of the contract of renewal. 12. The appeal must in the circumstances fail and is dismissed. In view of the fact that Plaintiffs had a right of renewal, but in the peculiar circumstances indicated above, we have not been able to grant any relief to the Plaintiffs, we think it appropriate to leave the parties to bear their own costs throughout. In the trial Court a similar direction had also been given. P.K. Mohanti, J. 13. I agree. Final Result : Dismissed