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The Hooghly Bank Limited. v. Mahendra Nath Mukhopadhyaya & Ors. .
Factual and Procedural Background
This is an appeal against an appellate decree of the District Judge of Hooghly affirming the decree of the Subordinate Judge, 2nd Court of the same place. The appellant is a successor-in-interest of Prannath Choudhury, and the defendants are successors-in-interest of Rajkrishna Mukherjee. Prannath Choudhury had granted a putni lease of his share of Touzi No. 37 of the Hooghly Collectorate to Rajkrishna Mukherjee, with a covenant requiring the submission of jamawasil baki papers and lowazima papers year after year. The plaintiff, Hooghly Bank Ltd., purchased the putni interest and possession in 1942 and found an absence of the required papers. As assignees of the original parties, the plaintiff called upon the defendants to submit the missing papers. Both lower courts held that the covenant was a personal covenant and did not run with the land, dismissing the plaintiff’s claim. The appellant challenged this interpretation on appeal.
Legal Issues Presented
- Whether the covenant requiring submission of jamawasil baki and lowazima papers runs with the land and is binding on the assignees of the original contracting parties.
- If the covenant runs with the land, whether the defendants as assignees of the putni holder are liable to submit the collection papers to the plaintiff as assignees of the original landlord.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court analyzed the nature of the covenant to determine if it runs with the land. It reaffirmed the principle that for a covenant to run with the land, it must "touch and concern" the land by affecting its nature, quality, or value. While the covenant did not affect the nature or quality of the land, the court focused on whether it affected the land's value from the moment it was entered into. The court found that the covenant to submit collection papers materially affects the value of the land or interest therein, as such papers facilitate collection and provide critical information about dues and the state of the putni. This factor would influence a purchaser’s valuation of the property or interest. Therefore, the covenant was held to run with the land, binding the assignees of the original parties. Consequently, the defendants were liable to submit the collection papers to the plaintiff. The court noted that the issue of damages was not decided and must be addressed in the trial court upon remand.
Holding and Implications
The appeal is allowed, the decrees of the lower courts are set aside, and the case is remanded for further proceedings consistent with this judgment.
The direct effect is that the defendants, as assignees of the original putni holder, are held liable to submit the collection papers to the plaintiff, the assignees of the original landlord. The plaintiff is entitled to costs incurred so far, with further costs at the discretion of the trial court. No new precedent beyond this case’s context is established.
1. This is an appeal against an appellate decree of the District Judge of Hooghly affirming the decree of the Subordinate Judge, 2nd Court of the same place.
2. The facts are very simple.
3. The Appellant is a successor-in-interest of one Prannath Choudhury of Satkhira. The Defendants are the successors-in-interest of one Rajkrishna Mukherjee. Both parties are assignees. Prannath Choudhury gave a putni lease of his share of Touzi No. 37 of the Hooghly Collectorate to Raj Krishna Mukherjee, one of the terms of which was “You shall submit duly year after year in my office the jamawasil baki papers, etc., and the lowazima papers.” On the 1st of May, 1942, the Plaintiff, the Hooghly Bank Ltd., purchased also the putni interest and took delivery of possession on the 30th June, 1942. They found an utter absence of papers and as the assignees of the original creators of the putni they have now called upon the Defendants, the assignees of the putni holder, for the lowazima and collection papers not submitted prior to the purchase by the Plaintiff and within the period of limitation. Both Courts have held that the covenant is not one which runs with the land but is only a personal covenant. The learned District Judge's judgment is not very satisfactory, as it deals with questions as to restraint on alienation, etc., which really do not arise. The only question which has been urged is whether the covenant, we have mentioned before, is one which runs with the land and is, therefore, binding on the assignees of the original contracting parties. The case stood over for a long time as no decision actually covering the point could be shown, except on observation in a case by this Court in which the Divisional Bench assumed that such a covenant may run with the land. It did not decide the point. Some decisions were cited regarding covenants to pay chout or ¼th share of the purchase money on sale of occupancy tenancies. Those are clearly distinguishable as they are creating a new right which as tenants the occupancy tenants did not possess and so conditions on the exercise of the right could be imposed.
4. It is clear that in order to be a covenant running with the land the covenant must touch and concern the land, that is, it must affect the nature, quality or the value of it. If it runs with the land then the covenant will bind not merely the original contracting parties, but even assignees provided privity is proved. In the present case, there is no question that there was privity between the assignees of the landlord's interest and the assignees of the tenant's interest. Land also means interests in land.
5. It is also clear that the covenant in question does not affect the nature or quality of the land. The only question, therefore, is: Does it affect the value of it? It is again clear from the decided cases that the covenant, to run with the land, must affect the value from the very time when it is entered into. In other words, would a purchaser take the exixstence of such a covenant into consideration in deciding upon the money be would spend for the purchase of the lands or the interest in lands? It is clear that a purchaser at an astam sale, i.e, compulsory sale of putni under the Regulation or the landlord, if he becomes the successor of the putnidar by surrender of the putni, would be in great difficulties as to collection unless he got proper collection papers of the tenant putnidar. In the two instances we have mentioned, he would not be likely to get any such help from the previous putnidars. Therefore, whether a person is a purchaser of the putni interest or of the landlord's interest, both will know that a duplicate set of collection papers submitted by the putnidar and kept in the landlord's sherista will supply requisite materials and facilitate collection and show the real state of affairs of the putni and the dues, etc., from the tenants. This factor will weigh with a purchaser of the interest in estimating the money that may reasonably be paid in the purchase of such property or interest. Under the circumstances it cannot but be said that a covenant like this will affect the value of the land and that from the very moment it is entered into. As it does so, it is a covenant running with the land and, therefore, binds the assignees. The Defendants were, therefore, liable as assignees of the original putnidar to submit collection papers to the assignees of the original landlord. Both the Courts were, therefore, wrong in dismissing their claim. The case cannot be fully disposed of here as the question of damages will have to be fully gone into now in the trial Court.
6. The order, therefore is that the appeal succeeds and is allowed and the decrees of the Courts below are set aside and the case is remanded for further action by the Subordinate Judge in the light of this judgment. The Plaintiff-Appellant will have all the costs incurred by him so far,—further costs being at the discretion of the Subordinate Judge.
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