1. In this appeal the only question raised is how far a covenant by a lessee in a registered document of lease to pay zare chaharam to the lessor in case of any sale or transfer by him of that leasehold interest is binding on and enforceable against his assigns and transferees. The facts giving rise to this case are now practically admitted and they are as follows. There was one Kanhaiya Prasad Sahu, who, on the records of this case, is represented after his demise by his son, the plaintiff respondent first party. He was the sixteen annas proprietor and landlord of village Mohammadpur Kazi in the town of Muzaffarpur bearing tauzi No. 11093. Therein he owned and possessed certain zirat and bakasht lands. Out of them, about 9 kathas of zirat and bakasht lands were settled by him with one Basanto Kumar Chatterji, the father of the defendants respondents second party, under two sets of registered pattas and kabuliats dated 28-6-26 and 1-7-27.
2. The patta and kabuliat corresponding to 28-6-26 have been marked on the record as exhibits 1 and 1.a while those corresponding to 1-7-27 have been marked as exhibits A and A/1 respectively. Under the former the area given in lease was 7 kathas and that was for a recompense of Rs. 24/8/- as rental and Rs. 1,400/- as nazarana while in the latter area covered was 2 kathas and it was for a consideration of Rs. 800/- as nazarana and Rs. 8/- as rent.
3. The common term with which we are concerned in this case under these documents is that in case of sale or transfer by the lessee of the leasehold interest to a person other than the lessor, the lessor was to get from the transferee a sum of Rs. 350/- under the first lease and a sum of Rs. 200/- under the second lease; and as these amounts work out exactly to one-fourth of the aforementioned nazarana amounts, they are described in the plaint as zare chauth.
4. Further, it appears that, though the lands given under the aforesaid demises were zirat and bakasht, the purpose for which they had been let out was not agricultural but non-agricultural, namely, the construction of residential quarters on them; and it is not denied that the lessee on his entry thereon did construct a house there and lived therein so long as he had not parted with his lease interest. Thereafter in 1946 the lessee assigned his interest in those lands to the defendant appellant along with the structures erected thereon who is now in possession of it.
5. On these facts, the two courts below have concurrently found — and I think rightly — that the lease having been given for a purpose non-agricultural is governed by the Transfer of Property Act and not by the Bihar Tenancy Act; and, as this part of the case is not any more in controversy, I need not go into it any further. Here the only grievance made on behalf of the transferee is that he being not a party to the original contracts of lease dated 28-6-26 and 1-7-27 is not liable for any covenant made thereunder for the payment of zare chaharam and therefore the finding given by the courts below contrary to it is wrong in law. In other words, his contention is that
“the stipulation on which the plaintiff based his claim was a personal covenant and not one running with the land and consequendy the assignee from the lessee would not be bound by it.”
6. As against this, the opposite view advanced by Mr. Chatterjee appearing for the landlord plaintiff is that, though a covenant like the one under consideration is not covered by any of the two clauses in section 40 of the Transfer of Property Act (as held in Sri Thakurji Maharaj v. Lachmi Narain, 19 Ind Cas 67 (All) (A)), nevertheless it being one between landlord and tenant is as much binding on the third party transferee as on the original lessee himself.
7. Now it cannot be denied that the general principle is that a personal covenant, even though it may have reference to property, is binding only as between the parties thereto and their privies. In other words, as a rule it is not enforceable against third parties into whose hands the property may have passed and that is quite understandable as there is no privity of contract with them: Ali Hussain v. Hakim Ullah, ILR 38 All 230 : (AIR 1916 All 200) (B). But experience has shown that in many cases for the full and effective enjoyment of lands given in transfer these covenants are not only essential but inseparable from those lands. So, as and when necessities arose, varying doctrines came in to fill up this lacuna in law.
8. At common law the one that got recognition was that of a covenant running with the land; while in equity its place was taken by the doctrine of restrictive covenant as laid down in Tulk v. Moxhay, (1848) 18 L.J Ch. 83 (C) and Haywood v. Brunswick Building Society, (1881) 45 L.T 699 (D) whereon section 40 of the Transfer of Property Act is founded. But as the former was the creature of common law and the latter that of equity, the considerations that weighed for the operation of each were naturally different.
9. For example, in the case of the former it was necessary in order that it should be binding on the assignee that the assignment should have been made with notice of the covenant to the assignee though in the case of latter no such consideration for notice arose. But in the present case, as already stated, the claim of the plaintiff is based exclusively on the doctrine of common law; therefore, here attention has to be confined to that alone.
10. Now, at common law a covenant is said to run with the land where the benefit or burden of it passes to the successors-in-title of the covenantee or the covenantor, as the case may be; yet, as a rule, what has been recognised in common law to run with the land is only the benefit of a covenant and not its burden. For example, if A was the covenantee and B, the covenantor, and the covenant related to the land of A, the benefit of the covenant ran with the land of A in the sense that A's assigns could enforce it against B provided that:—
1. the covenant was one ‘touching and concerning’ the land of A and
2. the covenant was intended by the parties to be annexed to the land of A.
11. And in Rogers v. Hosegood, (1900) 2 Ch. 388 (E) a covenant was said to ‘touch and concern’ the land when it was one which affected the nature or value of the land, or benefited the land, or affected the rent issuing out of the land. If, therefore, the covenant did not relate to land of A at all (Renals v. Cowlishaw, (1878) 9 Ch. D. 125 (F)) or if A had no land to the advantage of which the covenant might be said to have been entered into (Torbay Hotel Ltd. v. Jenkins, (1927) 2 Ch. 225 (G)) the benefit of the covenant could not be said to run with the land of A.
12. That means, so long as the benefit of a covenant affected the nature or value of the land or benefited the land or affected the rent issuing out of the land and was intended by the parties to be annexed to the land, it as a rule ran with it. But as to the burden of a covenant, the general rule was that it did not run with the land. ‘Thus if A was the covenantee and B the covenantor and the covenant affected the land of B, then the burden of the covenant did not run with the land of B and was not enforceable against the assigns and successors-in-title of B: Austerberry v. Corporation of Oldham, (1885) 29 Ch. D. 750 (H)’
13. That, however, was subject to one exception and that was in the case of lease, where not only the benefit of the covenant but also its burden ran with the land (Dennett v. Atherton, (1872) 7 Q.B 316 (I)). “Thus, a covenant by B the lessee in favour of A, the lessor, touching and concerning the thing demised ran with the land and was enforceable not only against B but also against his assigns provided the covenant had reference to things in esse, i.e, in existence on the land, or, if the covenant referred to things not in existence, the covenantor covenanted ‘for himself and his assigns’ (Doughty v. Bowman, (1848) 11 Q.B 444 (J).)
14. The exceptions were laid down in what was known as Spencer's case, (1583) 5 Coke Rep. 16-a (K), the basis of the exception being that, in case of landlord and tenant, an assignment by a tenant of his interest created a privity of estate between the landlord and the assignee who is consequently bound by the covenants in the lease (Stevenson v. Lambard, (1802) 102 E.R 490 (L) and Webb v. Russell, (1789) 100 E.R 639 (M)).”
15. Therefore, on the analogy of these principles, here also which is admittedly a case of lease, it has to be held that the covenant, as stated above, will run with the land though it is one of burdens provided, however, it is established that the aforesaid principles of common law are applicable to the cases of transfers made under the Transfer of Property Act and that the covenant in this case which has given rise to the dispute qualifies the two aforesaid conditions. Now on the facts of this case this much, I think, is obvious that the covenant as to the payment of zare chaharam is one which necessarily affects the value of the land.
16. Further, the term and the tenor of the covenant unmistakably show that at the time the covenant was entered into it must have been intended by the parties to be annexed to the land of the lessor. Therefore, in ultimate analysis, the liability of the defendant in this case hinges on the answer as to whether the doctrine of common law as stated above does or does not apply to the transfers made under the Transfer of Property Act.
17. In terms it has to be admitted that it does not apply for under that Act (here is no provision made anywhere at one place as to the doctrine of a covenant running with the land barring, no doubt, the few special instances of it that are provided here and there in some of its sections like 52(2), 65 and 108(c). But because of the established view that the Transfer of Property Act is not exhaustive on the subject it deals with, the courts in India acting on the rule of justice, equity and good conscience have uniformly imported this principle of common law even in those cases which are directly covered by the provisions of the Transfer of Property Act with I the result that the English common law general rule that the burden of a covenant affecting land does not run with the land applies in dais country also; so also the rule that in the case of landlord and tenant the burden of a covenant runs with the land.
18. That this is so is evident from the decisions in Deyal Singh v. Promatha Nath, AIR 1936 Pat 493 (N), Kumar Chandra v. Narendra Nath, AIR 1930 Cal 357 (O), Hooghly Bank Ltd., Calcutta v. Mahendra Nath, AIR 1950 Cal 195 (P), Saradakripa Lala v. Bepin Chandra Pal, 37 Cal L.J 538 : (AIR 1923 Cal 679) (Q), Central Bank and Building Society Ltd. v. Sailender Kumar Roy Chowdhury, AIR 1955 NUC (Cal) 2080 (R) and Nabjan Sardar v. Neburali Molla, AIR 1933 Cal 506 (S) some of which relate directly to the question of zare chaharam.
19. It is, however, necessary to note that there is one case brought to my notice on behalf of the appellant wherein the view taken in Prabhu Narain Singh v. Ramzan, ILR 41 All 417 : (AIR 1919 All 235) (T) has been strongly objected to. That is the decision in Haji Abdul Shakur v. Nandlal, ILR 53 All 742 : (AIR 1931 All 552) (U). In that case while referring to the decision in ILR 41 All 417 : (AIR 1919 All 235) (T), Young and Pullan, JJ., have inter alia observed:
“We notice that Piggot, J., decided that case on the nature of the plea set up by the defendant Ramzan in the trial Court. Walsh, J., alone decided the actual point before us in favour of the Zamindars. With great respect to the learned Judge, we are of opinion that case was wrongly decided. The learned Judge appears to have based his judgment upon the view that haq chaharam was a restrictive covenant of the kind dealt with in the English authority of (1848) 18 L.J Ch. 83 (C). We are of opinion that haq chaharam cannot be considered to be such a restrictive covenant. Restrictive covenants are covenants restraining the use to be made of the land. A contract to pay a certain sum of money on the happening of a certain event cannot possibly, in our opinion, be held to be a restrictive covenant. It appears to us that the whole of the judgment of the learned Judge is based upon this misapprehension. In any event, it was held in (1881) 45 L.T 699 (D) that the rule in (1848) 18 L.J Ch. 83 (C) that:
‘anyone coming into possession of land with notice, actual or constructive, of a covenant entered into by some one through or under whom he claims, restricting the use of that land, will be prohibited from doing anything in breach of the covenant’ applies only to a negative and not an affirmative covenant. Equity would not allow the assignee to use the land in contravention of the restriction. (1848) 18 L.J Ch. 83 (C) cannot be used to place the pecuniary liability of an assignor upon his assignee. In any event it has long been held in English law that no action of covenant will lie against the assignee, except for breaches of covenant happening while he is assignee. In our opinion it is clear that the whole of the argument of the learned Judge based upon restrictive covenants, and (1848) 18 L.J Ch. 83 (C) is misconceived.”
20. And finally they have held that the view taken by Walsh, J., in ILR 41 All 417 : (AIR 1919 All 235) (T) on the doctrine of restrictive covenant as laid down in (1848) 18 L.J Ch. 83 (C) and (1881) 45 L.T 699 (D) as also on section 40 of the Transfer of Property Act in reference to that case is not correct. According to them, none of those principles applied to the facts of that case, and to that extent, I think, if I may say so with all respect to the learned Judges, their decision is not only supported by authorities but is also well founded on principle.
21. But the difficulty arises where that decision is stretched to mean that in that case not only the doctrine of restrictive covenant as laid down in (1848) 18 L.J Ch. 83 (C) and (1881) 45 L.T 699 (D) or the provisions of law as laid down in section 40 of the Transfer of Property Act was held inapplicable but also the doctrine of common law as to the covenant running with the land.
22. I think the construction, if any, to that extreme extent is neither justified nor consistent with the facts or tenor of that decision, for, after all the scope of the controversy raised therein was confined to the question as to how far the view taken by Walsh, J., in ILR 41 All 417 : (AIR 1919 All 235) (T) on the facts of that case was correct or incorrect. And as the decision in ILR 41 All 417 : (AIR 1919 All 235) (T) rested exclusively on the equitable doctrine of restrictive covenant and on the provisions of section 40 of the Transfer of Property Act, there was no occasion for the learned Judges who decided the case of ILR 53 All 742 : AIR 1931 All 552 (U) to give any decision on the common law doctrine as to the running of the covenant with the land nor was their attention drawn to it.
23. If that is so, then I think the decision in ILR 53 All 742 : AIR 1931 All 552 (U) howsoever sound in taking a view contrary to what is laid down in ILR 41 All 417 : (AIR 1919 All 235) (T) on the equitable question of restrictive covenant is not an authority on the point as to how far the doctrine of common law can in such circumstances be relied upon. Therefore, the decision in ILR 53 All 742 : AIR 1931 All 552 (U) is of no avail to the appellant in challenging the view I have taken in support of the judgment under appeal though it has to be, at the same time, conceded that the extent to which the lower appellate court has laid reliance in support of its decision on the case of ILR 41 All 417 : (AIR 1919 All 235) (T) cannot be supported in law.
24. Then there are two other small questions which have also been raised in the course of the discussion here. The first is as to the effect of estoppel on the claim advanced in this appeal and the second relates to the maintainability of the present appeal. Mr. Untwalia, as he then was, has argued that subsequent to the transfer made by the original lessee the landlord had accepted certain payment made by the assignee in satisfaction of the decree which he had obtained for the rent of this land, as is evident from the chalan (Ext. B) dated 4-6-49; and, therefore, the landlord is now estopped from challenging the tenancy of the appellant.
25. In my opinion, this so called estoppel, even if taken as established, cannot stand in the way of the relief sought for here. The claim here advanced on behalf of the landlord is one as to the liability of the assignee for the payment of the zare chauth as stated above and not that he is not the tenant of the holding. Therefore, on that ground alone, the question of estoppel fails. Further this point was not argued in the courts below, and as such it cannot now be allowed to be opened for the first time in second appeal.
26. The other point as already stated relates to the maintainability of this appeal. Mr. Chatterjee appearing for the landlord has in this connection laid stress on the fact that defendant no. 3 died in June, 1953, leaving two daughters and that so far they have not been substituted in his place. Therefore, according to his contention, the appeal has abated.
27. In my opinion, this point also is without substance; for, it appears that on 28-7-53 this Court at the instance of the appellant noted in the order sheet that the persons who on the death of defendant No. 3 represented his estate were respondents nos. 2, 4 and 5 and not anybody else; and, as this order was passed in the presence of all the parties, it is now too late to be contended that the persons who were noted in the order sheet as the heirs of the deceased were in fact not his heirs or that the true heirs of the deceased were his two daughters who have nob so far been substituted. Therefore, that by itself is sufficient to dispose of the controversy, if any, as to the maintamabirity of this appeal. Therefore, in the result I hold that the appeal is one without substance and it is accordingly dismissed with costs.
D.H.Z
28. Appeal dismissed.