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Swarna Kumar Ghosh v. Prahlad Chandra Sarkhel
Factual and Procedural Background
This appeal arises from a suit seeking a declaration that a certain kobala in favour of Defendant No. 7 (the contesting defendant), executed by Defendants Nos. 1 to 6 in 1323, was invalid and should be set aside. The first Court decreed the suit against Defendants Nos. 1 to 7; on appeal the decree was upheld. The plaint also sought specific performance of a contract for sale. Defendant No. 7 appealed to this Court.
Legal Issues Presented
- Whether the covenant (restricting transfer of the lease except in favour of the lessors or subject to lessors' permission, with an exception for co-sharers) offends the rule against perpetuity and is therefore void.
- If the covenant is valid, whether it is a covenant running with the land.
- Whether the covenant, if valid, could be enforced against the Appellant as an assignee of the lessee who entered into the covenant.
Arguments of the Parties
Appellant's Arguments (Defendant No. 7)
- The covenant described by the Subordinate Judge is bad because it offends the rule regarding perpetuity.
- Alternatively, the covenant is not a covenant running with the land.
- Alternatively, the covenant could not be enforced against the Appellant because he is an assignee of the lessee who entered into the covenant.
The opinion does not contain a detailed account of the Plaintiffs' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court considered the three grounds advanced by Defendant No. 7 but concluded it was unnecessary to address the second and third grounds because the appeal succeeded on the first ground. The Court held that the covenant in question offends the rule of perpetuity. The Court noted that certain cases from the Allahabad High Court on the law of preemption were suggested for consideration but observed that it was unclear whether those cases were relevant and that they stand on their own peculiar law. Based on the finding that the covenant violated the rule against perpetuities, the Court allowed the appeal.
Holding and Implications
Appeal decreed with costs.
As a direct consequence, the appeal succeeds on the ground that the covenant offends the rule of perpetuity and the original suit is dismissed with costs. Defendant No. 7 is entitled to his costs from the Plaintiffs in the first Court and in the lower Appellate Court, and to his costs in this Court as against the Plaintiffs-Respondents. The opinion does not discuss broader legal implications or establish a new precedent beyond its application to the parties.
The Judgment of the Court was as follows:—
This is an appeal arising out of a suit brought for a declaration that a certain kobala in favour of Defendant No. 7, who is the contesting Defendant, and executed by Defendants Nos. 1 to 6 in 1323 is invalid, and that the same should be set aside.
The first Court decreed the suit against Defendants Nos. 1 to 7 and on appeal it was held that the appeal failed. We should also mention that besides prayer for a declaration, the plaint also asked for specific performance of a contract for sale.
Before us in appeal by Defendant No. 7, three points have been urged. First of all, that the covenant is bad which is referred to in the judgment of the Subordinate Judge, namely, that if the lessee or any of his representatives intend to transfer the whole or any portion of the lease, the transfer would be made in favour of the lessors for proper price, that the lessee would not be able to transfer in favour of a third party without lessors' permission or wishes, that in the case of transfer to a co-sharer of the lessee, lessors' permission would not be necessary, that in case of any act against the aforesaid conditions, the said act would be invalid.
It was contended that this covenant was bad as offending against the rule regarding perpetuity. Secondly, if the covenant were a good one, it is not a covenant running with the land, and thirdly, in any event, it could not be enforced against the Appellant as he was an assignee of the lessee who entered into the covenant. It is unnecessary to consider the second and the third of these grounds, for, we think the appeal succeeds upon the first ground. We have been invited to consider in this connection certain cases which have been decided by the Allahabad High Court upon the law of preemption. It is not clear whether the cases are relevant but in any event it is observed that these cases of preemption stand on their own peculiar law. In the present case we think it is clear that the covenant offends against the rule of perpetuity, and the appeal succeeds and the suit is dismissed with costs.
The Defendant No. 7 will be entitled to his costs from the Plaintiffs in the first Court and in the lower Appellate Court and he is entitled to his costs in this Court as against the Plaintiffs-Respondents.
J.N.R
Appeal decreed with costs.
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