Shavakshaw Dinshah Davar v. Motor Union Insurance Co.

Shah, A.C.J:— Undoubtedly according to the evidence there was a lease for three years by the owners in favour of Dr. Nicholson and he had sub-let the premises to the defendant. The first document is not on the record but the sub-lease in favour of the defendant is Ext. 2 in the case. It appears from the evidence of the defendant that there was a document passed by him in favour of the Central Bank of India, Limited, but that was not registered. Therefore in law he was a lessee of these premises from Dr. Nicholson from the date of the document Ext. 2, that is, from March 13, 1919. Thus at the date of the agreement in question between the parties he was undoubtedly a sub-lessee of the premises. It may be that he in his turn may have sub-let the premises to the Central Bank of India; but the rent bills were all prepared in his name at least from March 1, 1921; and so far as the present record is concerned, it is clear that the defendant's position then was that of a sub-lessee from Dr. Nicholson of the premises. Assuming, however, that the defendant was throughout ready and willing to perform his part of the contract and that there was a breach on the part of the plaintiffs, it seems to me that his present agreement is open to the objection based on the provisions of Section 8 of the Bombay Bent (War Restrictions) Act (II of 1918). That section provides—“It shall not be lawful for any person, in consideration of the grant, renewal or continuance of a tenancy of any premises to require the payment of any fine, premium or any other like sum in addition to the rent.” In the present case it is clear that the rent to be paid for the premises was Rs. 225. The further sum to be paid to him is stated to be in consideration of the defendant's obligation as indicated in the first three paragraphs of the letter of April 8. That Sum was Rs. 2,73,000. It is clear that if this payment is over and above the rent in consideration of the grant, renewal or continuance of a tenancy the agreement would be unlawful. It is urged on behalf of the defendant that S. 8 has no application to this case because the defendant has nothing to do with the premises, that he was a third party who undertook to take certain trouble for the plaintiffs in the way of securing a tenancy of certain premises, and that therefore the agreement is outside the scope of S. 8. In other words it is urged that the payment agreed upon was not in consideration of the grant, renewal or continuance of a tenancy of the premises. I am, however, unable to accept this contention. It is clear that he was a sub-lessee of the premises as I have already indicated at the date of the agreement. The documents in the case and the evidence of the defendant leave no doubt that he was a sub-lessee for a period of three years commencing from March 1919, and to the extent to which he agreed to assign his interest as lessee to the plaintiffs he agreed to grant a tenancy of the premises in question. Further, in agreeing to secure to the plaintiffs possession of the premises on payment of the rental of Rs. 225 per month, he agreed to continue or to secure the continuance of the tenancy which was to be granted to the plaintiffs by him. S. 8 does not in terms refer to a landlord. Any person who enters into an agreement in considerations of the grant, renewal or continuance of a tenancy of any premises to require the payment of any premium or any other like sum in addition to the rent is within the scope of S. 8. Without expressing any opinion as to whether a person who is in no sense connected with the premises would be within the scope of the section or not, I am satisfied that a person in the position of the defendant with reference to the Nawab Building is undoubtedly one to whom the prohibition contained in S. 8 would apply. By whatever means or words the parties may attempt to disguise the fact, it is clear to my mind that this was only a device to get a tent of Rs. 2,275 per month for the premises, of which the defendant was at that time a sub-lessee, and of which he expected to get a lease for a further period so as to make up a total period of ten years in addition to the standard rent. I am, therefore, of opinion that the learned trial Judge is right in his view that the agreement, so far as it related to the monthly payment of Rs. 2,275 extending over a period of ten years, was unlawful.

2. In this view of the matter the last point which has been argued need not be further dealt with.

3. I should find it extremely difficult to allow specific performance of an agreement under which the defendant was to get a sum of Rs. 2,73,000 for securing a tenancy for ten years of the premises the monthly rental of which was Rs. 225. It may be that during that year there was a great difficulty about securing premises; and the sum may not have appeared exorbitant to the party who was to receive it or the party who was in need of the premises may not have been able to resist the demand. But it seems to me to be really an exorbitant amount to be paid for the trouble which no doubt the defendants would have to take to secure the premises. I should find it difficult to allow specific performance of an agreement of this nature. But it is unnecessary to pursue this point further as with regard to the breach of the contract and the unlawful nature of the agreement. I am of opinion that the judgment of the trial Court is right.

[His Lordship then in conclusion dismissed the appeal with costs.]

Crump, J.:— I agree.

4. Appeal dismissed.