Ismail Dada Bhamani v. Bai Zulukhabai Wife Of Mia Ahmed Darvesh

Stone, C.J:—

This is an appeal from the judgment of Mr. Justice Blagden, dated August 1, 1943.

The appellant is the tenant of certain property at the Victoria Road, Byculla, being certain plots of land in the Mustafa Timber Market. The premises are comprised in two leases executed by the former owner and by the Central Bank who were the mortgagees. Both leases are dated October 11, 1933, and, except for the description of the plots, are in identical terms. In each case the term of the lease commenced on September 1, 1932, and ended on August 31, 1935, after which date the appellant held over. By s. 116 of the Transfer of Property Act, 1882, a monthly tenancy is thereby constituted.

It appears that the appellant was a tenant of all the plots subject to the two leases prior to September 1, 1932, by some former tenancy, and in the case of the plots subject to one of the leases the appellant's sub-tenants were already in possession, and that in the case of the plots subject to the other of the leases a sub-tenancy was created six or seven years ago.

On December 28, 1942, the reversion expectant on the two tenancies was assigned by the mortgagees to the respondent, and the mortgagees intimated the fact of the assignment to the appellant, who, on the same date, received notices to quit in identical terms from the respondent as his new landlord. It is common ground that at all material dates the premises comprised in both the leases have been used for the storage of timber by way of business.

The principal question, which arises, is whether the premises comprised in these two leases are protected by s. 11 of the Bombay Rent Restriction Act, 1939, which is as follows:

“(1) No order for the recovery of possession of any premises shall be made so long as the tenant pays or is ready and willing to pay rent to the full extent allowable by this Act and performs the other conditions of the tenancy.”

The terms “premises” is defined by s. 4(2) as follows:

“(a) Any building or part of a building let separately for any purpose whatever, including any land let therewith, or

“(b) any land let separately for the purpose of being used principally for business or trade.”

From the conjoint effect of these two sub-sections it appears that the scheme and intention of the legislature was to exclude from the benefit of the Act only land not separately let for the purpose of business or trade. With this exception the protection the Act affords is universal. The questions which arise, are: Whether the premises being land is let separately for the purpose of being used principally for business or trade. If so, whether the appellant qualifies for the benefit of s. 11 as having paid or being ready and willing to pay rent and as having performed the other conditions of the tenancy. But if not, then a question arises as to the validity of the notice to quit. No breach of any condition of the lease is suggested except the covenant against underletting.

Accordingly it is necessary to look at the clauses in the leases as to user and as to underletting. These are clauses 5, 6 and 7 of the lessees' covenants, which are as follows:—

“5. Not to use or permit to be used the said demised premises or any part thereof for the purpose of storing charcoal, grass, kerosene oil, petrol or any other inflammable materials of a like nature or as a stable for bullocks, cows, buffaloes or horses or other animals.

“6. Not to underlet or assign the demised premises without the consent in writing of the mortgagees or in case of the sale of the said premises of any purchaser thereof such consent not to be unreasonably withheld.

“7. Not to use the said demised premises for any purpose other than as timber shops or sheds for the storing of timber or for making furniture and as saw mills and for the purposes incidental thereto provided nevertheless that nothing herein contained shall be deemed to prevent the lessee from occupying a part of the said demised premises as a dwelling house for himself and his family only.”

To determine whether the subject-matter of a demise is: “let separately for the purpose of being used principally for business or trade”, the lease itself must be the governing factor; but, in my opinion, the lease can be considered and construed in conjunction with the relevant surrounding circumstances, which must be the physical nature of the premises and how they were in fact used at the date of the lease. There is no doubt about this. At the date of the lease the plots of land were used for the storage of timber for profit or gain and not as an adjunct to some private activity. There was in fact at the date of the lease a business being carried on there. It is true, as pointed out to us by Mr. Desai that the lease does not in terms state the purposes of the letting and does not lay down in mandatory form that any particular trade or business is to be carried on there. But, as is usual with conditions as to user the covenants are couched in negative form, and the question really resolves itself into this: In order to come within the expression: “let for the purpose of business or trade” have you got to find an affirmative assertion of the purposes of user, or can the qualification operate when looking at the covenants in the lease as a whole and with knowledge of the condition of the premises it the date of the lease and its user, it is manifest that the premises demised are business premises and let on terms which insure a continuation of that user?

In my judgment, this is the correct method of approach to the lease. Clause 5 of the lessee's covenant is merely a restrictive covenant against user of the premises in certain dangerous and other ways. It is cl. 7 which is important. In form this is a negative covenant; but, as pointed out by Mr. Setalvad, it is a form of a double negative: “not to use the demised premises for any purpose other than as timber shops….” It follows that the only permitted purposes are timber shops and the other purposes to which I will revert later. The learned Judge in the Court below dealt with this part of the case as follows (p. 247 ante):

“The covenant not to use the demised premises for any purpose is put first. Then there is an exception made in favour of a particular form of activity, which may be briefly described as dealing with timber, and a proviso which allows the tenant to use part of the premises as a dwelling house. Now, no doubt both parties contemplated it as probable that some form of trade or business Would be carried on there. Can I say from that alone that the purpose of the letting was that the premises should be used principally for business? I do not think I can.”

With, great respect to the learned Judge, I think this is putting too narrow a construction on the words of the section. Some assistance is also to be gained by a description of the plots of land in the blue prints annexed to the two leases in which the area in which the plots are situated is described as “the Timber Market”. But a further point has been taken, namely, that the other uses to which alone the land may be put, namely: “sheds for the storing of timber or for making furniture and as saw mills and for the purposes incidental thereto”, materially affect the question. In my judgment, when cl. (7) is looked at as a whole, starting as it does with “timber shops”, the motive of the letting was business purposes. Nor does the provision about the dwelling house affect the matter; this is subsidiary to the main or principal purpose, and in this respect it is to be noted that the user of the house is limited to the lessee and his family. That being so, in my judgment, the section applies to these premises, and the next question, which arises, is whether the appellant is entitled to the benefit of it. No question arises as to any non-payment of rent. But it is said that he has not performed the other conditions of the tenancy by reason of the breach of the covenant against underletting.

Section 11 of the Act is couched in the present tense, and there is authority of this High Court under the Act of 1918, s. 9(1), which is, except for one word, identical with s. 11 of the Act of 1939, that the relavant point of time to consider is the time when the suit was filed. The case is Mathuradas v. Nathubhai and Mr. Justice Pratt after considering two English cases under the equivalent English statute says as follows (p. 348):—

“I think that is the proper construction of s. 9(1) of the Bombay Rent Act. The present tense is used not to describe anything that the tenant does or may do at the time when the Court's order is made, but to describe the conduct of the tenant which entitles him to plead the Rent Act, i.e, the conduct of the tenant up to or at the time when the suit was filed.”

A little further on the same page the learned Judge says:

“I think that in both the English and the Indian section the words ‘continues to pay’ and the word ‘pays’ respectively refer to the time anterior to the filing of the suit.”

On the next page the learned Judge observes:

“Section 9(1) is in the present tense because that section merely describes the sort of tenant who is entitled to claim protection under the Act.”

In the present case the breach of the covenant against underletting has subsisted in the case of the premises demised by one of the leases since the inception of the lease, and in the other for at least six years. There is no evidence as to whether the breach was ever brought to the attention of the bank who by its receiver has been collecting the rents. I do not propose to lay down what the position would be if waiver of the forfeiture caused by the breach had been proved. That has not occurred in this case, and, in my judgment, the breach itself was still continuing, and was in existence on the date when the suit was filed. Therefore, if the covenant against under-letting is a covenant which comes within the words “and performs the other conditions of the tenancy”, the breach of it would be, in my opinion, a fatal bar to the appellant relying on s. 11.

The way the matter is put by Mr. Setalvad is this. He says that the whole of cl. 6 is a negative covenant, and that you cannot “perform” a negative, and that “performs the other conditions of the tenancy” is complementary to the payment of rent and means doing some act and not abstaining from doing something. We have been referred to Harman v. Ainslie, in which the Court of Appeal in England held that the proviso for re-entry applied to a breach of the covenant not to assign or under-let without consent. The Master of the Rolls, Sir Richard Collins, says as follows (p. 704):—

“The difficulty in these cases appears to me to have arisen from a confusion of the obligation accepted with the mode of performing it. When one speaks of ‘performing’ a covenant, it is in the sense of fulfilling the duty created by it, whether to do or to abstain from doing a thing. The word ‘perform’ is, no doubt, inapplicable to not doing a thing, but the obligation to abstain from doing something may, I think, be said to be ‘performed' by not doing it.”

Lord Justice Romer put the matter thus (p. 710):—

“All I need say is that the result of them (the authorities) appears to me to be that we are not bound to hold, and that it would not be right to hold, as a general rule of construction that in clauses of re-entry, the word ‘perform’ must be construed as excluding all covenants by the lessee which may be called negative covenants. It may well be that, in the construction of particular clauses of re-entry, there may be some terms in the clause or its context, such as to prevent the application of the word ‘perform’ to some negative covenants; but, after all, the question, whether in a clause of re-entry in a lease the word ‘perform’ applies to a negative covenant, must depend on the true construction of the lease taken as a whole. Here I think the words ‘to be performed’ do include the previous covenants in the lease, which have been called negative covenants.”

In my judgment the words: “and performs the other conditions of the tenancy,” in s. 11, of the act mean, fulfils all the other duties imposed by the lease on the lessee. In my opinion, there is no room for the application of the ejusdem generis doctrine. In the result, although the section applies to these premises, the appellant is not entitled in this suit to take advantage of it.

That leaves the question as to whether the notice to quit is a valid notice. The validity of this notice depends on two letters, or rather three letters, the two of which are in identical terms. They are all dated December 28, 1942. By the first of them the receiver to the mortgagees gave notice to the appellant that he had on that day sold the property, and he says as follows:

“It has been arranged that the said purchaser should be entitled to recover the rents accruing due as from January 1, 1943. I have therefore to request” you to attorn tenant to the said purchaser and to pay to her the rents accruing due as from January 1, 1943. The rents for December 1942 will be recovered by me. I have this day handed over possession of the property to the said purchaser.”

The second and third of the letters, which are in identical terms, are the actual notice to quit given by the purchaser. Mr. Setalvad says that he has continued to be the tenant of the bank up to January 1, 1943, and accordingly the notice, is bad. In my opinion, this is not so. I think that the expression in the first of the letters: “I have this day handed over possession of the property to the said purchaser” makes it clear that the purchaser became the landlord on December 28, 1942, and was the proper person to give the notices to quit.

The other point is with regard to the form of the notice itself. Both the notices contain this sentence:

“We are instructed by our client to call upon you to quit, vacate and deliver to our client peaceful possession of the portion of the said premises in your occupation on or before January 31, 1943, failing which, our client will adopt ejectment proceedings against you without further intimation.”

In Ahearn v. Bellman: Sedgwick v. Ahearn the words were (p. 103):—

“I hereby give you notice to quit and deliver up possession of the shops, premises, and show-rooms now held by you as tenant from me on or before the first day of May next, 1878.”

In that case, which was a decision of the Court of Appeal, the notice was held to be a good notice. There is some dictum to the contrary in Queen's Club Gardens Estates, Ld. v. Bignell, but no decision in that case turned upon the words “on or before” and what was said there was dicta. The learned Judge in the Court below has dealt with this part of the case as follows:—

“However that may be, ‘on or before’ a date, being the date on which the tenancy expires, is in my opinion a good notice to quit in a landlord's notice.”

In my judgment, the conclusion arrived at by the learned Judge was right, and for these reasons the appeal must be dismissed with costs.

The appellant to vacate by December 31, 1943.

Kania, J.:—This is a suit for ejectment. The defence is twofold: (1) By reason of the Bombay Rent Restriction Act, 1939, an order of possession should not be made; and (2) that the notice to quit is invalid.

Under the first ground it was contended that the plots of land covered by the two leases in suit were let separately for the purpose of being used principally for business or trade, and, therefore, the first requirement of s. 11 was fulfilled. It was next contended that the tenant had performed the conditions of the tenancy on the date the matter came to Court, and, therefore, he was entitled to the benefit of the Act. The question for consideration, therefore, is whether these two contentions are sound. Unless the tenant satisfies the Court that he is right on both the points, he is not entitled to get the benefit of s. 11.

On the first point it was argued on behalf of the respondent that in law it is not necessary for a lease to specify any particular use to which the property should be put. It was contended that considerations of the use of the premises till the date of the lease, what was being done in the locality and what in fact was done in the property after the lease, are all immaterial and irrelevant considerations. The only question to be considered is whether by the lease, which is the only contract in writing between the parties, the requisite condition is fulfilled. In my opinion so far the arguments are correct.

The opening words of the covenants of the lease are: “And the lessee doth hereby covenant with the lessors and the mortgagees as follows:” Clause 7, the material covenant, is worded in a double negative form. Making it into a positive sentence it would mean that the lessee covenanted with the lessor to use the said premises only for timber shops or sheds for the storing of timber or for making furniture and as saw mills and for purposes incidental thereto. But that did not prevent the lessee from occupying a part of the said premises as a dwelling house for himself and his family only. Those words clearly indioate that the plots of land were to be used for the purpose of timber shops, etc. I read the first part of that clause as indicating the principal purpose for which the land let was to be used. The latter part of that clause permitted not the erection but the occupation of a portion of the demised premises as a dwelling house. I do not find in this lease anything to allow a tenant to put up a structure of a permanent nature. The clause, therefore, defines the purpose for which the plot has to be used, and I do not think it is unreasonable to read that clause as meaning that the property has to be used principally for business or trade. It was contended on behalf of the respondent that under this clause the tenant was not obliged to do business. In my opinion, that is not a relevant consideration. The purpose of use is mentioned; and, although it may not be open to the landlord to compel the tenant to carry on trade, it is equally clear that the letting was in order that the land should be used for the purposes mentioned in the clause. In my opinion therefore the first requirement of s. 11, namely, that the land was let for the purpose of being used principally for business or trade, is fulfilled.

The next question is whether the tenant is one who has “performed the other conditions of the tenancy.” Two questions arise for consideration on those words in the section: Whether the words “perform the conditions” cover only the positive covenants under which the tenant has to do an act, or whether they cover the negative covenants also. It was strenuously urged on behalf of the appellant that the word “perform” is inappropriate in respect of a negative covenant, and the proper word would be “observe”. In support of that contention reference was made to the words used in the lease itself. Relying on West v. Dobb, where it was doubted if the words “perform and observe” may not cover a negative covenant, and the observations in Hyde v. Warden, where it was contended that a negative covenant must at least have the word “observe” connected with it, it was urged that the word “perform” would not cover the observance of a negative covenant. In my opinion, this controversy has been set at rest by Collins M.R in Harman v. Ainslie. He observed as follows (p. 705):—

“If a man promises not to do a thing he fulfils his obligation, or, in other words, ‘performs’ his contract, if he abstains from doing it. It seems to me that it is in this sense that the word ‘perform’ was used in several of the provisos for re-entry which have been discussed, and also in the present case. I think ‘perform’ means in this context ‘carry out the obligation undertaken’, whether negative or affirmative.”

Later on summarising the discussion he observed as follows (p. 710):—

“… the result of the authorities appears to me to be that we are left with the right to exercise our own judgment on the construction of the proviso for re-entry in this case, and that the last and most authoritative pronouncement by two judges of this Court is in favour of the view contended for by the plaintiff.”

That view was that the word “perform” covered a negative covenant also. I respectfully agree with that line of reasoning, and, in my opinion, the contention of the appellant that the word “perform” in s. 11 does not cover a negative covenant is unsound.

The next question of importance is at what point of time this test has to be applied? In other words, when has the tenant to be in a position to state that he “performs the other conditions of the tenancy?” In this connection the judgment of our Court in Mathurandas v. Nathubhai is in point. It is the decision of a single Judge, but it is not pointed out that any Judge has dissented from the rule laid down there. It is also based on two decisions of the English Court. That decision was on the construction of s. 9 of the Bombay Rent Restriction Act of 1918, which was enacted towards the end of the last war. The words used in that section were “perform the conditions of the tenancy.” In considering the meaning of those words the learned Judge observed (p. 348):

“The present tense is used not to describe anything that the tenant does or may do at the time when the Court's order is made, but to describe the conduct of the tenant which entitles him to plead the Rent Act, i.e, the conduct of the tenant up to or at the time when the suit was filed.”

It was also pointed out that the jurisdiction of the Court to grant relief under this statute, which limited the right of a landlord under the ordinary law, did not arise, unless the terms on which the statute gave the jurisdiction were strictly complied with. The result, therefore, is that the words in the present Act must mean that the tenant must fulfil that character when the suit was filed; in other words, in the present case, the appellant has to show that on the date when the suit was filed he fell within the category of a tenant who “performs the other conditions of the tenancy.”

The dispute between the parties arises out of the act of sub-letting of all the plots which was done by the tenant several years ago and which continues up to date. It was contended on behalf of the appellant that the sub-letting having taken place several years ago, a breach of the covenant occurred at that time, and that there was no continuous breach. It was argued that whatever the result the same took place when the sub-letting occurred. It was argued that in the present case the original lease came to an end in the year 1935 and thereafter the tenant held over. The result was that under s. 116 of the Transfer of Property Act, the tenancy was considered renewed from month to month. The effect of such renewal was a new periodical tenancy which sprang from the old lease; it had no definite term, but was liable to come to an end on a proper notice being given by either side as required by law. It was contended that this tenancy was a continuous tenancy, and, therefore, the breach of the covenant which took place years ago could not be relied upon as a continuing breach on the date the suit was filed. It was further argued that as the alleged breach took place long before the plaintiff became the owner, she was not entitled to take advantage of the same. In this connection it was pointed out that under the English common law, on a transfer of property, the benefit arising out of breaches of covenant did not pass to the transferee. This was remedied by a statute in England. No such statute has been passed in India, and, if the English common law were to apply, the present plaintiff cannot take advantage of the breach committed during the term of the previous owner. It was pointed out that although in Vishveshwar v. Mahableshwar it was considered that when a forfeiture had taken place during the term of the previous owner the subsequent purchaser was entitled to take advantage and determine the lease on that footing, the decision is stated in the commentary in Sir Dinshah Mulla's Transfer of Property Act as not good law. I do not think that decision is based on the English law. Reading it carefully it appears to me to be based on the wording of s. 109 of the Transfer of Property Act.

In the present case the breach of covenant, although it took place years ago, was not known to the landlord. In the written statement it was alleged that the sub-letting was with the consent, at quiescence and connivance of the mortgagees. Under the lease the consent to be valid has to be in writing. It is not contended that there was any such consent. The only other evidence in respect of the alleged waiver is of a sub-tenant who was called to give evidence and of the defendant. Their evidence only comes to this. The ‘mortgagees,’ that is to say, the bank's clerk went to the premises to receive rent, and he received cheques which were signed by a party who was not the tenant. The other evidence clearly shows that, although it is alleged that there were several sub-tenants, only one sub-tenant paid the rent of all, that the rent bills were always made out in the name of the defendant, and although the name of Cassum Abdulla & Co. appeared on the signboard, there was nothing to show that Cassum Abdulla & Co. was different from the defendant. On looking at that board no one had reason necessarily to believe that the defendant was not doing business in that name. The fact that the party actually handing over the money or cheque for rent was different from the defendant does not also help the appellant, because actual payment of the rent due may be made by a clerk of the employee. That does not suggest the existence of a sub-tenant. The learned Judge has carefully considered the evidence, and, in my opinion, has rightly come to the conclusion that there was no waiver of the breach of this covenant on the part of the landlord. It is not disputed that the sub-tenants, as such, are still in occupation of the premises.

An interesting argument on the question whether a breach of the covenant against under-letting was a continuous breach or not was addressed to us. Such covenant and the effect of its breach were contrasted with the covenants to keep the premises repaired and insured. In my opinion discussion on this line is not helpful. The tenant, when sued, has to show that he is one who “performs the conditions of the tenancy” within the meaning of s. 11 of the Rent Restriction Act, 1939. If a covenant of any kind has been broken by him, he can show that it was agreed to be waived, in which case the Court will consider that there was no breach. He may in the alternative show that it was repaired, by proving that before the suit was filed the sub-tenant had been made to go, or that the property was already repaired or insured. In either case when the suit is filed there exists no breach and the tenant will be of the requisite class. I am not concerned with a case where a tenant has sub-let premises and is unable to remove the sub-tenants because of Act XVI of 1939. In this case the appellant has taken no steps to remove them. It was contended that the plaintiff was not entitled to rely on this breach which occurred before she became the owner. In my opinion that is not the point at all. As owner, the plaintiff is entitled under the ordinary law to file the suit. The defendant resists the claim because of s. 11 of the Rent Restriction Act of 1939. If so, he has to show that he fulfils the necessary conditions. As already pointed out, because the words in s. 11 are in the present tense, as held in Mathuradas v. Nathubhai (supra), it is obligatory on the tenant when brought to Court to show that he occupied the status of a “tenant” fulfilling the conditions of that section, and if he fails to do so, it is no answer that the breach was in the predecessor's time. The result, therefore, is that, although the premises are such as to invite the application of s. 11, the tenant does not belong to the class to which the section applies.

That leaves the parties governed under the ordinary law. The question of the validity of notice has therefore to be considered next. Two points were urged in this connection. It was contended that the plaintiff was not entitled to give the notice on December 28, 1942. This is based on the assumption that the plaintiff was not the owner of the property on that day. In my opinion the assumption is unjustified. The only ground for this contention is that in the notice given on behalf of the mortgagees it was stated, that the property was sold to the present plaintiff, that the defendant was asked to attorn tenant to her, and that the rent should be paid to her as from. January 1, because under the arrangement made between the present plaintiff and the vendor rent up to the end of December was payable to the vendor. The existence of such an arrangement does not in any way prevent the passing of the property, and is permissible under s. 109 last clause, of the Transfer of Property Act. The letter clearly conveys that the plaintiff had become the owner and as such acquired the right to deal with the property. If so, in my opinion, she was the person fully entitled to give the notice to quit.

The next contention was that because the notice was to vacate “on or before” the date named therein, it was vague and did not give intimation to the defendant about the time when he should vacate. This argument was, it seems, based on the observations of Lush J. in Queen's Club Gardens Estates, Ld. v. Bignell. The observations, however, clearly show that the learned Judge himself was not quite sure of his ground and declined to base his decision on that view. The point, however, is clearly decided in Ahearn v. Bellman: Sedgwick v. Ahearn where the terms of the notice were exactly similar. Bramwell L.J, in dealing with the matter, observed as follows (p. 203):

“Nobody can doubt that if the notice had stopped there, it was effectual to determine the tenancy, and was a good notice to quit.”

A reading of that case shows that the point was considered inarguable, and no one ventured to suggest that the notice worded as terminating the tenancy “on or before” a named date was bad.

The result is that the appeal fails and is dismissed with costs. The appellant to vacate by December 31, 1943.

Attorneys for appellant: Messrs Mulla & Mulla.

Attorneys for respondent: Messrs Dorab & Co.

Appeal dismissed.

A.J.P