Citation Codes

Equivalent Citations

citation codes

Case Number

Privy Council Appeal No. 52 of 1937; Bengal Appeal No. 40 of 1936

Advocates

Sanderson Lee and Co.
Hy. S.L. Polak and Co.
H.S. Chatfield
Sir Thomas Strangman
A.M. Dunne
W. Wallach
D.N. Pritt

Judges

Sir George Rankin
Lord Porter
Justice Lord Macmillan

Acts

REGISTRATION ACT 1908
Sec. 35, Calcutta Port Act,

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Smart Summary

Concise Analytical Summary of the Opinion (Lord Porter)

Factual and Procedural Background

The respondents own plots of land at Grierson Road, Howrah. Prior to September 1932 Gobardhan Das Deora was tenant of the plots and certain structures had been erected thereon; a draft lease was sent to Deora but was not executed. Deora fell into arrears of rent. An arrangement was made by which the appellant would purchase the structures from Deora and, between respondents, Deora and the appellant, the appellant would become the tenant of the land (and certain further land) at an agreed rent. A certificate of possession signed on 12 September 1932 recorded that the appellant went into possession on that date under an agreement for a yearly lease beginning 1 October 1932, but a draft lease subsequently sent on 24 October 1932 was never returned.

By June 1933 a significant rent arrear remained. Letters exchanged between the parties on 27 and 28 June 1933 set out settlement terms: the appellant (through his agents) paid rent for five months (February–June 1933), agreed to give up vacant possession of part of the land on 1 July 1933, and to remain as an "ordinary" tenant from 1 July 1933 subject to termination on 15 days' notice expiring with the end of a calendar month (the letters are reproduced and constituted central evidence).

After the exchange and further payments the appellant gave up part of the land and paid rent up to end April 1934, after which he defaulted. On 12 January 1935 the Deputy Chairman of the Commissioners served notice terminating the tenancy effective 31 January 1935 and requiring possession on 1 February. Copies of the notice were (1) sent by registered post (apparently addressed to 2 Grierson Road), (2) handed to Deora for transmission to the appellant, and (3) affixed to the structures.

The appellant refused to surrender possession, contesting (a) that he was a monthly tenant subject to 15 days notice (arguing instead for a yearly tenancy or different notice regime), (b) that the notice had not been properly served on him personally (disputing Deora's agency and the adequacy of affixation), and (c) that Rs. 3,000 previously paid to the respondents should be deducted as rent in advance. Proceedings in the Indian courts found service to have been properly effected by delivery to the appellant; on appeal to the Board all points raised by the appellant were rejected and the appeal was dismissed with costs.

Legal Issues Presented

Whether the exchange of letters of 27 and 28 June 1933 constituted a contract making the appellant a monthly (terminable by 15 days' notice) tenant from 1 July 1933, contrary to any presumption under Section 106 of the Transfer of Property Act.
Whether the appellant could rely on the 12 September 1932 document to prove a yearly tenancy given the constraints of Section 17 of the Registration Act, 1908.
Whether the notice terminating tenancy (served 12 January 1935) was validly served in accordance with Section 106, T.P. Act (i.e., sent by post to the tenant's proper address, or tendered/delivered personally, or to a family/servant at residence, or, if such tender/delivery was not practicable, affixed to the property).
Whether the respondents were bound to allow deduction of Rs. 3,000 paid earlier by the appellant as rent in advance (i.e., whether that payment constituted rent in advance or security), and whether that issue could be raised in the action without a set-off/counter-claim and appropriate court-fee.
Whether, under Section 35 of the Calcutta Port Act, the respondents could only determine a lease "in meeting" (an argument noted but not pressed before the Board).

Arguments of the Parties

Appellant's Arguments

The document of 12 September 1932 prima facie showed a yearly tenancy; however, due to Section 17 of the Registration Act, 1908, that document could not be used as proof of its terms (though it could be used to prove the date of possession).
Absent proof that the lease was for other than agricultural or manufacturing purposes, Section 106, T.P. Act would apply to create a month-to-month tenancy only if there was no contract to the contrary; the appellant contended no valid contract to the contrary existed.
The appellant argued the respondents' letter of 27 June 1933 and the appellant's replying letter of 28 June 1933 did not form a contract: the 28th was a counter-offer because it used the term "ordinary" tenant rather than "monthly" and because it spoke only of the tenant's right to give 15 days' notice (omitting an express reciprocal right for the landlord).
The appellant disputed proper service of the termination notice: he denied personal service, denied that Deora was his agent to accept service, and denied that facts justified service by affixing the notice to the property.
The appellant claimed Rs. 3,000 previously paid to the respondents was rent in advance and should be deducted from amounts claimed by the respondents.

Respondents' (and their Agents') Arguments

The respondents relied on the letters exchanged in June 1933—read together they constituted a contract under which the appellant became an "ordinary" (i.e., monthly) tenant from 1 July 1933, terminable on 15 days' notice expiring with the end of a calendar month.
They asserted the arrears for February–June 1933 and associated costs were paid (a cheque was sent) and arrangements were agreed for surrender of a portion of the land on 1 July 1933.
Regarding service, the respondents relied on the evidence of their peon (Sadeque Khan) that the registered letter was addressed to and taken to 3 Chanmari Road (the appellant's known address), handed to the appellant personally there, and a signed receipt produced; alternatively, copies were also delivered by other methods and affixed.
On the Rs. 3,000 point, the respondents and the Indian courts treated that sum as security for payment of rent rather than rent in advance, and noted that no set-off or counter-claim was pleaded or court-fee paid to raise that point in the action.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Board's analysis proceeded stepwise and closely followed statutory text and the parties' documentary evidence.

Construction of the June 1933 letters:
- The Board read the respondents' letter (27 June) and the appellant's reply (28 June) together. On true construction the second letter was held to be an acceptance of the first, not a counter-offer.
- The panel explained that in Calcutta the term "ordinary tenant" ordinarily denotes a monthly tenant, even if the letter did not expressly refer to monthly payments. That meaning would carry the tenancy rule under s.106 T.P. Act for a tenancy "from month to month terminable ... by 15 days notice expiring with the end of a month."
- The omission in the tenant's letter to expressly give the landlord the reciprocal right to give 15 days' notice was held not to prevent the landlord from relying on the ordinary rule; a tenant might naturally stipulate his own right without expressly limiting the landlord's ordinary rights.
- The Board found no difficulty about commencement: both letters stipulated the 1st of a month (1 July 1933) as the commencement date of the agreed arrangement.
Service of notice under Section 106, T.P. Act:
- Section 106 requires written notice signed and sent either by post to the party's proper address, or tendered/delivered personally to the party or certain persons at his residence, or, if such tender/delivery is not practicable, affixed to a conspicuous part of the property.
- The Board accepted the factual findings of the Subordinate Judge and Appellate Court that the notice had been duly effected by delivery to the appellant himself. The key testimonial evidence was that of the respondents' peon, Sadeque Khan, who stated the letter was taken to 3 Chanmari Road (the appellant's admitted address), handed to the appellant, and that a receipt signed by the appellant was produced.
- Although there was an inconsistency in that the letter itself was addressed to 2 Grierson Road and the peon said he first came to know the appellant when delivering that letter, the Board found this did not materially weaken the peon's evidence. The Board accepted that the peon might forget the exact addressed number yet reliably remember delivering the letter and seeing the receipt signed.
- The Board also rejected the appellant's failure to attend the hearing or to give positive contradiction of the peon's evidence; the only contrary assertion (by Deora) that the signature was not the appellant's was treated as insufficient to rebut the peon's positive testimony.
Registration Act point and nature of tenancy proof:
- The appellant argued Section 17 of the Registration Act prevented his using the 12 September 1932 document to prove the terms of a yearly lease, though it might be used as an admission to prove the date of possession. The Board accepted that the Registration Act might limit the use of that document as primary proof of a yearly lease, but concluded the June 1933 letters themselves constituted a contract to the contrary, rendering Section 106's presumption inapplicable.
Section 35, Calcutta Port Act:
- A submission that under Section 35 the respondents could only create a lease "in meeting" and hence could only determine it "in meeting" was noted but not seriously argued before the Board and was described as plainly untenable; the Board did not rely on that contention.
Rs. 3,000 payment (rent in advance vs. security) and procedural bar:
- The Subordinate Judge and Appellate Court had found the Rs. 3,000 paid before 24 October 1932 was security for payment of rent rather than rent in advance; there was oral and written evidence to that effect.
- No claim to recover that sum by way of set-off or counter-claim had been made and no court-fee paid for that purpose; on that procedural basis the Subordinate Judge held the issue could not be raised in the action before him, and the Board saw no reason to differ.
Conclusion of analysis:
- All points taken by the appellant were rejected by the Board: the letters formed a contract creating a monthly tenancy terminable on 15 days' notice from 1 July 1933; the notice issued in January 1935 had been validly served; the Rs. 3,000 was not available as a set-off in the action; and the Section 35 argument was not tenable.

Holding and Implications

Holding: The Board advised that the appeal be dismissed with costs. Appeal dismissed.

Implications (direct effect on the parties):

The Board affirmed the findings that the exchange of letters created a tenancy from month to month (an "ordinary" or monthly tenancy) effective 1 July 1933 and terminable by 15 days' notice expiring with the end of a month.
The Board upheld the factual conclusion that the termination notice issued in January 1935 had been validly served on the appellant.
The Board accepted the courts below in holding that the Rs. 3,000 payment was security, and further held that the appellant could not raise that matter by way of set-off in the action where no counter-claim and court-fee had been filed.
Costs were awarded against the appellant as the appeal was dismissed with costs.

The opinion does not discuss broader legal implications beyond the direct consequences to the parties and does not purport to establish a novel legal precedent.

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Prahladrai Chooreewalla v. Commissioners For The Port Of Calcutta

Lord Porter:-

The respondents in this case are the owners of certain plots of land at Grierson Road, Howrah. Before September 1932, one Gobardhan Das Deora (hereinafter called Deora) was tenant of the plots on which certain structures had been erected. A draft lease had been sent to him but it was never executed. Deora failed to pay the rent for the land and a large amount became due from him to the respondents. It was accordingly arranged between Deora and the appellant that the appellant should purchase the structures, and between the respondents, Deora and the appellant, that the appellant should become tenant of the land and certain further land at an agreed rent. The terms of the arrangement will be found in a letter from the respondents to the appellant's solicitors dated 21st September 1932.

It was part of the terms agreed between Deora and the appellant that the appellant should take over and pay Deora for the structures on the land. This provision was duly carried out and from the sum so received Deora discharged the rent which was in arrear. The appellant then took possession of the land and a certificate of possession was signed by him and by a representative of the respondents on 12th September 1932, from which it appears that the appellant went into possession on that date under an agreement for a yearly lease beginning on 1st October 1932. The respondents however seem to have thought that the lease was to operate from 1st September 1932 and on 24th October 1932 a draft lease was sent to the appellant's solicitors. This lease was never returned. The appellant nevertheless remained in possession and for a time paid the stipulated rent, but by 13th June 1933 a considerable sum remained unpaid, and a suit for its recovery was pending. In these circumstances a discussion took place between the respondents and the appellant's agents and letters purporting to embody its result were exchanged between them. These letters must be set out in full as their legal effect is in dispute between the parties.

Messrs. Talbot and Co.,

Tower House, Chowringhee Square,

Calcutta.

DEAR SIRS,

With reference to your letter No. WSV/1963, dated 30th June 1933, and your Mr. Basil's conversation with the Assistant Secretary today, I beg to confirm the following arrangements in regard to the land at Grierson Road, Howrah, leased to Babu Pralhadroy Churiwalla :

1. That Babu Prohladroy Churiwalla will pay up before 1st July 1933 :

Rs. as. p. Rent for five months from February to June 1933 ... ... 5822 8 0 Cost of the suit instituted against him... ... ... ... 340 8 0 6162 8 0

2. That Babu Prohladroy Churiwalla will hand over vacant possession of a portion of the land on 1st July 1933.

3. That Babu Prohladroy Churiwalla will be treated as a monthly tenant after 1st July 1933 in respect of the land retained by him from that date. This tenancy will be terminable by either party on 15 days' notice expiring with the end of a calendar month.

Yours faithfully,

(Sd.) S. L. Das,

Offg. Secretary.

On 28th June 1933 Messrs. Talbot and Co. replied as follows:

The Offg. Secretary,

Calcutta Port Commissioners,

Calcutta.

DEAR SIRS,

Re : Land in Grierson Road, Howrah.

We thank you for your letter No. 39921 of yesterday's date and, as arranged with you over the telephone today, have pleasure in sending you herewith our cheque for Rs. 5822-8-0 being the amount of rent paid over to us by Babu Prohladroy Churiwalla for the months of February, March, April, May and June 1933.

As regards the cost of the suit Mr. Churiwalla has requested us to find out whether there is any possibility of saving the stamp-fee by withdrawing the case and in such event he is prepared to pay your out-of-pocket expenses not exceeding Rs. 340. On hearing from (you) we shall take up the matter with him.

The terms of the settlement are that Mr. Churiwalla will give up whatever vacant portion of the land he can and remain as ordinary tenant from 1st July 1933, and subject to the termination by giving you 15 days' notice in writing.

Kindly let us have your stamped receipt for the cheque sent herewith.

Encl. Yours faithfully,

SAB/J Talbot and Co.

After this exchange of letters and payment of the amount mentioned, the appellant gave up a portion of the land and continued to pay rent upon the portion retained by him up to the end of April 1934. Thereafter he failed to pay the rent due and on 12th January 1935 the Deputy Chairman of the Commissioners wrote giving him notice that his tenancy would terminate on 31st January 1935 and requiring him to give up possession on 1st February. Copies of this notice were : (1) sent by registered post apparently addressed to 2, Grierson Road, (2) handed to Deora for transmission to the appellant, (3) affixed upon the structures erected upon the land.

The appellant refused to give up possession on the ground that he was not a monthly tenant or subject to 15 days notice and that, even if he were, his tenancy began either on 12th September or 1st October and therefore a valid 15 days notice should end on the 12th or 1st of the month and not on the 31st. He further denied that the notice had ever been served on him personally, denied that Deora was his agent to receive the notice and alleged that no facts had been shown justifying service by affixing the notice on the land.

The appellant's case upon the question of tenancy was that the document of 12th September 1932 prima facie showed a yearly tenancy but that owing to the provisions of the Registration Act of 1908, Sec. 17, he could not use that document as proof of its terms, though he might use it as an admission by the respondents for the subsidiary purpose of proving the date at which he took possession. If, then he could not prove a yearly tenancy by agreement, the terms of his tenancy were, he maintained, to be ascertained by reference to Sec. 106, T. P. Act, by which it is enacted that:

In the absence of a contract or local law or usage to the contrary a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year terminable on the part of either lessor or lessee by six months notice expiring with the end of a year of the tenancy, and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month terminable on the part of either lessor or lessee by 15 days notice expiring with the end of a month of the tenancy.

It was not proved, said the appellant, that the lease was for other than agricultural or manufacturing purposes and therefore it was not proved that 15 days notice was sufficient. Their Lordships will assume without deciding that the onus was on the respondents to prove a use for other than agricultural or manufacturing purposes and that the evidence does not establish such a use. The Section however only applies in the absence of a contract to the contrary and in their Lordships' opinion the letters of 27th and 28th June 1933 do constitute a contract to the contrary. If the matter rested upon the terms of the letter written by the respondents, the appellant would plainly have agreed to become a monthly tenant as from 1st July 1933. But it is said that the appellant's letter is not an acceptance but a counter-offer differing from the first in two respects, viz. (1) in using the term "ordinary'' and not 'monthly' tenant, and (2) in permitting the tenant only and not the landlord also to give 15 days notice.

Reading the two letters together, their Lordships are of opinion that the second is upon its true construction an acceptance of the first. Unless there was some indication to the contrary, the term "ordinary tenant"would in Calcutta mean monthly tenant, even though there were no reference to payments of monthly rent; and such a tenancy would be terminable on 15 days notice expiring with the end of the month of the tenancy. That meaning, in their Lordships' view, is not altered because the letter of 28th June goes on to provide for 15 days notice by the lessee without mention of notice by the lessor. Such a provision might naturally be made by a tenant to safeguard his right to terminate the tenancy in 15 days leaving the landlords' right to be governed by the ordinary rule. The mere omission of such a provision in the landlords' favour does not even by implication prevent the landlord from relying upon his ordinary rights. Nor does any difficulty arise with regard to the commencement of the tenancy - each letter stipulates the 1st of the month. The appellant however maintains that even if a notice were given in good time and ending on the proper day yet it had not been proved that that notice was duly served on him. The provisions as to notice are contained in Sec. 106, T. P. Act, and are as follows :

Every notice under this Section must be in writing signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.

Their Lordships agree that in that Section sending by post must mean sending by post to the tenant's proper address, and they do not think it proved that the letter containing the notice was sent to the appellant's proper address. Nor do they think that Deora was the appellant's agent to receive the letter or that it has been proved that tender or delivery was not practicable so as to entitle the respondents to effect service by affixing the notice to the property. On the contrary, in their view both the Courts in India were right in deciding that service was not only practicable but had been duly effected by the delivery of the notice to the appellant himself.

The evidence is that of the peon Sadeque Khan, witness 1 for the respondents. He testified that he knew the appellant and that the letter was addressed to and taken by him to 3, Chanmari Road (which is admittedly the appellant's address), and there handed to the appellant. A receipt which he said he saw signed by the appellant and received from him was also produced. It is true that in fact the letter was addressed to 2, Grierson Road, and that the witness said in cross-examination that he came to know the appellant when the letter was delivered to and the receipt signed by him. But the witness might readily forget the exact address of the letter and yet remember delivering it and receiving the receipt, and though he may have first seen the appellant on that occasion, the evidence gives no reason to suppose nor any indication that his knowledge of the appellant ended as well as began on that occasion. The Subordinate Judge saw the witness and accepted his evidence and the Appellate Court came to the same conclusion as the Court below.

Their Lordships do not think that these findings of fact are materially weakened because the Subordinate Judge was under the mistaken impression that another witness on behalf of the respondents knew and recognized the appellant's signature or because the Appellate Court said the evidence was uncontradicted. In truth it was uncontradicted-the appellant himself did not attend the hearing or deny that he had received the notice and signed the receipt and the mere statement of Deora that the signature was not the appellant's-an opinion in which he may well have been mistaken-is not a contradiction of the positive evidence of the peon that he saw the appellant append his signature.

A suggestion that as by Sec. 35, Calcutta Port Act, the respondents could only create a lease "in meeting,"so they could only determine it "in meeting"was not seriously argued before the Board and is plainly untenable. But the appellant maintained that in calculating the amount due from him to the respondents for rent a sum of Rs. 3000 should be deducted. That sum he undoubtedly paid to the respondents before 24th October 1932. He asserted that the payment was rent in advance. The learned Subordinate Judge and the Appellate Court have held it was security for the payment of rent and there is oral and written evidence to that effect. No claim to this sum has been made by way of set-off or counter-claim nor any court-fee paid for that purpose. In these circumstances the Subordinate Judge held that that issue could not be raised in the action before him. Their Lordships see no reason to differ from this decision. As in the opinion of the Board all the points taken by the appellant fail, they will humbly advise His Majesty that the appeal be dismissed with costs.

Appeal dismissed.

Prahladrai Chooreewalla v. Commissioners For The Port Of Calcutta

Concise Analytical Summary of the Opinion (Lord Porter)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondents' (and their Agents') Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Prahladrai Chooreewalla v. Commissioners For The Port Of Calcutta

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