Dawson Miller, C.J:— This is an appeal by the defendants under the Letters Patent from a decision of Ross, J., dated the 19th July, 1921, setting aside a decree of the lower appellate Court.

The appellants, Messrs Ralli Brothers, are merchants carrying on business in Calcutta and other places. The respondent, Mr. A.H Forbes, is the proprietor of a large estate in the Purnea district of this province. The appellants are the lessees under the respondents of 4 bighas of land on the latter's estate under an instrument, dated the 22nd January, 1894.

On the 17th September, 1917, the respondent instituted this suit as plaintiff claiming to eject the appellants and recover possession of the land. His case is that the lease was a yearly lease and could be terminated by him on giving 6 months' notice which was duly given, but the appellants refused to give up possession. It is the appellants' case, first, that the lease was a permanent lease, or, secondly, if the instrument does not bear this interpretation, that they had been induced by the acts and representations of Mr. Forbes to believe that they had a permanent interest in the land, and that, acting thereon, and in good faith, they had erected permanent buildings on the land and established a business connection at that place at considerable expense, and that Mr. Forbes was estopped from denying the truth of the representation. They rely upon the provisions of Section 115 of the Evidence Act and the equitable doctrine of estoppel.

The Munsif before whom the case came for trial was of opinion that the lease was a permanent one and not a lease from year to year and, further, that Mr. Forbes had induced the appellants to build upon the land at considerable expense by representing that Messrs Ralli Brothers had a permanent interest, and was estopped from denying the truth of the representation.

On appeal the officiating District Judge affirmed the decree of the Munsif and dismissed the appeal.

A second appeal to this Court was argued before Ross, J., who was of opinion that the lease created a yearly tenancy only and not a permanent interest in the land. On the question of estoppel the learned Judge held that, as the written lease was plain and unambiguous in its terms, there was no room for mistake and, as the lease was not a permanent one, no statement about it by Mr. Forbes could make it so. He further considered that there was in fact no representation that the lease was a permanent lease and that no opinion expressed by Mr. Forbes could alter the nature of the estate taken under the deed, and that there was no estoppel.

From this decision Messrs Ralli Brothers have appealed under the Letters Patent to this Bench. It is contended on their behalf, first, that the lease in fact grants a permanent interest and, secondly, that upon the facts found by the lower appellate Court, which cannot be questioned in second appeal, the respondent is estopped from denying the truth of the representation made by him as found by the lower appellate Court, and that it was not competent for the learned Judge of this Court to arrive at a different conclusion of fact and base his decision thereon.

It is necessary therefore to consider in some detail the facts alleged by the parties and the conclusions arrived at by the officiating District Judge in first appeal. The lease in question is dated the 22nd June, 1894, and was registered three days later. The lease itself has been put in evidence and the kabulyat executed by Mr. Acatos, the Agent of Messrs Ralli Brothers, has also been proved and admittedly contains the terms of the lease. It provides as follows:

That whereas land is required by me, Mr. Acatos, Agent of Messrs Ralli Brothers' Sahebgunge Agency, for the purpose of erecting buildings, putting up presses, etc., for trading, I, the aforesaid Agent, agree to lease from Mr. A.H Forbes, executor to the estate of the late A.J Forbes, 4 bighas of land for the above purpose measured with the local rod of 4½ cubits of 18 inches situate in mauza Pokhar, Pargana Sultanpur, thana Matiari in the district of Purnea and adjacent to the Forbesgunge Railway station, on the following terms, viz., from year to year at an annual rental of Rs. 45 per bigha or total rental of Rs. 180 and to pay zamindari dak cess as well as all legal cesses payable at present and which may hereafter be enforced by Government beginning from the agricultural year 1302 M.S”

The second clause provides for payment of the rental by quarterly installments. The third clause restricts the tenant from cutting down or selling any trees on the land without the sanction of the lessor under penalty of paying Rs. 10 per tree or more according to the value thereof. The fourth clause provides that if at any future date the area of the land under the lease should be found by measurement to be in excess of the area leased the tenant should pay rent for the excess according to the highest rate then prevailing. The fifth clause provides that the nominal lessee, Mr. Acatos, shall have no right to transfer except to the name of Messrs Ralli Brothers or to sell any portion of the land without the written authority of the lessor. The sixth and last clause contains the boundaries and dimensions of the land settled.

By section 106 of the Transfer of Property Act, in the absence of a contract or local law or usage to the contrary, the lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year terminable by 6 months' notice by either party. But where a lease has been granted for building purposes and no term is specified in the instrument, if the buildings contemplated or in fact erected are of a permanent nature, the Courts in this country have generally presumed that the interest granted was intended to be a permanent one. The present lease purports to be a building lease, and buildings have in fact been erected of a permanent nature but the terms are stated to be from year to year at an annual rental of Rs. 45 per bigha, and some years later, towards the end of 1903, Messrs Ralli Brothers, although they considered, as was found by the learned District Judge, that they had a permanent interest in the land and might safely erect permanent buildings thereon, nevertheless, owing to a certain vagueness in the terms of the lease, approached the lessor before doing so. Accordingly, on the 31st December, 1903, an interview took place between Mr. Forbes and his agent, Mr. Duff, on the one hand and Mr. Carras, representing Messrs Ralli Brothers, on the other. The purport of what took place at that interview was given in evidence by Mr. Carras and was accepted by the learned Judge. At the request of Mr. Carras the result of what took place at that interview was reduced to writing and is contained in a letter written to Mr. Carras by Mr. Duff the same day. The letter is in these terms:

Sultanpur,

The 31st December 1903.

Dear Mr. Carras,

Referring to your conversation of this morning with Mr. Forbes and myself I write at your request to say that the lease executed by Mr. C. Acatos dated the 22nd June, 1894, is a permanent lease and gives you the right to erect buildings but it does not entitle you to hold at a fixed rate and the rent is liable to enhancement after proper legal notice. If your firm desires to have a permanent lease at a fixed rate of rent I will be glad to see the proposed draft of lease and to show it to Mr. Forbes. In the meantime you can commence the house if you like to do so.

Yours sincerely,

PATRICK DUFF,

Manager, Sultanpur Estate.

The evidence of Mr. Carras, which was accepted by the learned District Judge, was to the effect that he wanted to construct a permanent building for his residence on a portion of the leasehold land and, on referring the matter to his principals at Calcutta, was instructed that the point should be made quite clear as to whether the lease was a permanent one or not. He accordingly interviewed Mr. Forbes and his manager, Mr. Duff when a conversation took place between them the substance of which was embodied in the letter of the 31st December. Mr. Duff was not called as a witness. Mr. Forbes however was called and apparently denied all recollection of the matter. It was found as a fact that the letter accurately represented the substance of the conversation between Mr. Forbes and his agent and Mr. Carras and that the letter was written under the directions of Mr. Forbes. It appears that at, this time Messrs Ralli Brothers wished to have a permanent lease at a fixed rent, and it is clear from that letter that the question whether the rent was fixed or liable to enhancement was discussed at the interview, and the agreement come to was that the lease was permanent but did not entitle the tenant to hold at a fixed rate of rent. It appears further from the Munsif's judgment that a nazarana was paid by the lessees in respect of the building which was commenced sometime in January 1904, and completed in May and, from a letter written by Mr. Duff to Messrs Ralli Brothers' solicitors on the 23rd January, it appears that, before building, the lessees had called for the lessor's title deeds. This letter refuses to produce the title deed stating that matters of greater importance than the lease of a few bighas of land were constantly transacted in the lessor's estate without the production of such papers and that there were no special title deeds for the plot of land which Messrs Ralli Brothers had held for the last nine years. It then says:

“Mr. Forbes therefore declines to produce such valuable papers as he holds and considers that the existing lease with the addition of the sanction recently given to erect the building is sufficient for all requirements.”

It is found as a fact that the defendants would never have undertaken the construction of a masonry building at such a heavy cost if they had not been led to do so by the representation of the plaintiff and his manager referred to above. It is also found in terms that Mr. Forbes gave Messrs Ralli Brothers fully to understand that the lease of 1894 was a permanent lease and that they could construct buildings without any fear but had no right to hold the land at a fixed rate. From 1904 till 1916 the appellants remained in occupation paying the rent reserved under the lease. In the latter year the lessor's kacheri or estate house was unfortunately destroyed by fire. He thereupon attempted to levy a toll upon each of his tenants at the rate of As. 1-6 per rupee of their rental for the purpose of re-building the kacheri. Whether the other tenants of Mr. Forbes submitted without protest to this procedure does not appear, but Messrs Ralli Brothers definitely refused to contribute their proportion and were undoubtedly within their rights in so doing. This appears to have given offence to Mr. Forbes who in August 1916 served the lessees with notice to quit and subsequently instituted the present suit.

I have referred in some detail to the findings of the Additional District Judge as it is upon these findings that the determination of the question of estoppel must depend. With regard to the appellants' first contention, viz., that the lease is in fact a permanent one, in my opinion the decision of Ross, J., now under appeal was right and that of the Additional District Judge cannot be supported. Admitting that a lease granted for the purpose of building permanent structures may be presumed to pass a permanent interest I do not think that, such a presumption can outweigh the actual terms of the lease itself. The lease purports to be from year to year at an annual rental of Rs. 45 per bigha and this in my opinion can only be construed as granting a lease from year to year even if the lessees have power to build. Certain cases were referred to by the appellants in support of their contention on the first point. The first is that of Juhooree Lal Sahoo v. Dear, but that decision goes no further than this, that where the land is given to a lessee for the purpose of building a house to live in, without any term being fixed for the tenancy, the tenure of the house and land cannot be taken away from the lessee's heir or his vendee as long as he continues to pay the rent. The decision goes no further than to raise a presumption of permanency in the case of building leases where no term is fixed, which does not appear to me to be the present case where the term is said to be from year to year. It was contended however that the words “year to year at an annual rental of Rs. 45 per bigha” meant no more than an undertaking to pay the rent year after year, and the case of Raja Promoda Nath Roy v. Sri Govindo Chowdhury was cited, where it was held that where a lease was given for building purposes the Court may well presume that it was intended to be a perpetual lease. The words used in that instance were “You will pay the rent, etc., at the above rate kist by kist year after year”, and the following passage in the judgment of Ghose and Bodilly, JJ., was relied upon to show that even a lease stated to be from year to year might be of a permanent nature: “As already noticed the lease in this case does not specify any period during which it is to subsist. The land was to be held by the lessee from year to year at a certain yearly rent and in the event of a masonry building being erected on it the lessee would be liable to pay the prevailing rate of rent. And it seems to us looking at the document as a whole, that the absence of the words mourasi, mukararri and so forth which are usually found in grants in perpetuity does not indicate that it was not the intention of the lessor to grant a permanent lease.” If by this the learned Judges meant that the lease was in fact one from year to year the decision eventually arrived at seems hardly consistent with that finding nor were the words from year to year in that part of the judgment a correct reproduction of the words actually used in the lease. I do not think that a chance expression such as that relied upon and which may well have been made per incuriam can have any binding force as an authority upon the construction of such leases.

In Sarada Kripa Lala v. Akhil Chandra Biswas the lease which was called a taluka patta recited that the tenant had executed a kabulyat in favour of the grantor and that the taluka patta was granted on rent of Re. 1 from year to year. Then followed a covenant in these terms: “You shall erect houses upon the land and live there. If I have a personal necessity you shall relinquish the land and you Will not be entitled to make any objection.” It was held that if there be nothing either in the surrounding circumstances or in the instrument which creates the interest to show that it was intended to be otherwise the inference is that a lease described as a taluka patta was intended to be permanent. The words in that case “on rent of Re. 1 from year to year” were clearly taken as indicating merely a yearly rent of one rupee and having no reference to the term demised, and no point appears to have been taken that they could bear any other interpretation. In the present case however the words are different and appear to me to indicate both a lease from year to year and an annual rental of Rs. 45. I hold therefore that the lease must be construed as a yearly lease. At the same time the cases to which reference has been made may well have raised a doubt in the minds of the parties in this case as to what their exact rights were under the instrument in question and this is not without importance in considering the question of estoppel.

In support of their plea of estoppel the appellants rely upon the case of Ramsden v. Dyson and Thornton and contended that on the facts found by the officiating District Judge the respondent is estopped from denying the permanent nature of their interest. The doctrine is thus expressed by Lord Cranworth, L.C, in that case:

“If a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a Court of equity will not allow me afterwards to assert my title to the land on which he had Expended money on the supposition that the land was his own. It considers' that, when I saw the mistake into which he had fallen, it was my duty to be active and to state my adverse title; and that it would be dishonest in me to remain wilfully passive on such occasion, in order, afterwards to profit by the mistake which 1 might have prevented.

But it will be observed that to raise such an equity two things are required, first, that the person expending the money supposes himself to be building on his own land: and, secondly, that the real owner at the time of the expenditure knows that the land belongs to him and not to the person expending the money in the belief that he is the owner. For if a stranger builds on my land knowing it to be mine, there is no principle of equity which would prevent my claiming the land with the benefit of all the expenditure made on it. There would be nothing in my conduct, active or passive, making it inequitable in me to assert my legal rights.”

The respondent on the other hand contends that on the facts found the case is not governed by the principle there enunciated. The Lord Chancellor in thus stating the principle deals only with the case where the owner of the land takes no active part in inducing the tenant to build or encouraging him in the mistaken idea that he has a right to do so but merely remains passive whilst he perceives the mistake. The reason why Courts of equity refuse to allow the owner of land to profit by such a mistake rests upon the ground that it would be conniving at dishonesty to permit him to do so. But in the case supposed, where the owner merely stands by and does nothing and afterwards seeks to eject the tenant, there can be no question of fraud or dishonesty unless the owner was aware when the building was erected that he had power to prevent it. In such a case there could be no obligation or duty upon him to disclose that of which he was not himself aware, for it is the attempt to take advantage of this breach of duty or obligation which constitutes the dishonesty. Similarly, if the tenant is aware that he has no right to build, there is no obligation upon the owner to inform him of that which he already knows, nor would it make any difference, in such a case, that the owner was well aware of his own rights. The knowledge of the owner as to his power to interfere is therefore essential where his conduct is merely passive and he takes no active steps to create or induce a mistaken belief in the mind of the tenant as to the latter's rights or as to his own acquiescence in or consent to the trespass. Lord Cranworth, L.C, did not in terms formulate any principle indicating, the factors which would be necessary for the application of the doctrine where the owner by his own words; or acts intentionally caused the tenant to believe that he was entitled to build or induced him to do so. But I apprehend that where the owner, being either ignorant of his rights or uncertain of their extent, by his own act or representation creates or induces in the mind of his tenant a mistaken belief that he has a permanent interest in the land and may safely build thereon, and the tenant, relying upon the act or representation so made, treats his interest as permanent and incurs expense in building, which he would not otherwise have done, the owner cannot afterwards be heard to deny the truth of that which he represented. To allow him to do so would, in my opinion, be opposed to the fundamental principles of the doctrine of estoppel. For just as, in the former case, the rightful owner must be deemed guilty of a dishonest act if, knowing an innocent mistake has been committed, he omits to correct it and afterwards seeks to take advantage of it, so, in the latter case, if he actively assists in creating the mistaken belief in the mind of his tenant which the tenant acts upon in good faith, it would be contrary to honest dealing for the landlord afterwards to go back upon his word, however innocent his conduct may have been in the first instance.

The facts found by the majority of their Lordships in Ramsden v. Dyson, did not bring the case within the doctrine but Lord Kingsdown who took a different view of the facts enunciated the rule thus:

“The rule of law applicable to the case appears to me to be this: If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation. This was the principle of the decision in Gregory v. Mighell and, as I conceive, is open to no doubt.”

Although Lord Kingsdown differed from the majority of their Lordships in his appreciation of the evidence his decision as to the principle to be applied has not so far as I am aware ever been questioned. It was referred to by Sir Lawrence Jenkins, C.J, in The Municipal Corporation of Bombay v. The Secretary of State for India as a correct exposition of the doctrine and was applied in that case. Moreover the application of the doctrine of estoppel in this country, in so far as it creates a rule of evidence, is governed by statute and finds expression in Section 115 of the Evidence Act. Whether there be, as stated by Sir Lawrence Jenkins, C.J, in that case, essential differences between the law embodied in the section and the equitable doctrine referred to, I do not propose to discuss, for full effect must be given in this country to the rule enacted by the section, which appears to me to do no more than embody in a compendious form the result of the principles laid down in the decided cases. It is unnecessary therefore to refer in detail to all the English authorities which were referred to in argument. Section 115 of the Evidence Act provides as follows:

“When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.”

It will be observed from the wording of this section that it combines the principles underlying the doctrine of estoppel as enunciated both by Lord Cranworth, L.C and Lord Kingsdown in Ramsden v. Dyson. The estoppel may arise by reason of either a declaration, an act or an omission, but in either case there must be an intention on the part of the person against whom the estoppel operates to cause or permit a belief in the mind of another. In the case of a mere omission no such intention can well be imputed unless the true facts are known to the person whose omission is in question, but where there is a deliberate declaration or act causing or permitting such belief and inducing another to act upon it, it must be presumed that such declaration or act was intended to have its ordinary and natural effect upon the mind and actions of the other party. In considering the effect of this section I cannot do better than refer to the case of Sarat Chandra Dey v. Gopal Chandra Laha, where Lord Shaw in delivering the judgment of their Lordships of the Judicial Committee, dealing with the case of a declaration or act, observed:

“In regard to the first of these points, the section of the Evidence Act by which the question must be determined does not make it a condition of estoppel resulting that the person who by his declaration or act has induced the belief on which another has acted was either committing or seeking to commit a fraud, or that he was acting with a full knowledge of the circumstances, and under no mistake or misapprehension. The Court is not warranted or entitled to add any such qualifying conditions to the language of the Act; but even if they had the power of thus virtually interpolating words in the statute which are not to be found there, their Lordships are clearly of opinion that there is neither principle nor authority for any such legal doctrine as would warrant this. The learned Counsel who argued the present case on either side were agreed that the terms of the Indian Evidence Act did not enact as law in India anything different from the law of England on the subject of estoppel and their Lordships entirely adopt that view. The law of this country gives no countenance to the doctrine that in order to create estoppel the person whose acts or declaration induced another to act in a particular way must have been under no mistake himself, or must have acted with an intention to mislead or deceive. What the law and the. Indian statute mainly regard is the position of the person who was induced to act and the principle on which the law and the statute rest is, that it would be most inequitable and unjust to him that if another, by a representation made, or by conduct amounting to a representation, has induced him to act as he would not otherwise have done, the person who made the representation should be allowed to deny or repudiate the effect of his former statement, to the loss and injury of the person who acted on it. If the person who made the statement did so without full knowledge, or under error, sibi imputet, it may, in the result, be unfortunate for him, but it would be unjust, even though he acted under error, to throw the consequences on the person who believed his statement and acted on it as it was intended he should do.”

The judgment from which I have just quoted contains a forcible and lucid exposition of the law of estoppel as administered in India and based upon the statute. Upon the facts found by the lower appellate Court the present case appears to me to come directly within the four corners of the principle as enunciated by Lord Shaw.

It is contended on behalf of the respondent however that the terms of the lease are so clear that there can be no room for mistake, and that Messrs Ralli Brothers could never have been deceived as to their actual rights by any representation made by Mr. Forbes. It is further argued that the representation was at most a mere expression of opinion upon which Messrs Ralli Brothers might act or not at their own risk. This appears to have been the view taken by Ross, J., in the decision now under appeal. The learned Judge also appears to have considered that there was no representation at all of any existing fact, and, as I read his judgment, he arrived at this conclusion by finding that the representation, such as it was, was a mere expression of opinion, or, at most, of the landlord's present intention. In face of the express findings I must respectfully decline to speculate as to whether a person of reasonable intelligence could honestly believe the instrument created more than a yearly interest. It is found as a fact that Messrs Ralli Brothers thought that they had a permanent interest but that the terms of the lease were vague and indefinite, and they therefore had a doubt, and wanted it cleared up before committing themselves to building. I think that is a fair inference to be drawn from the findings whole. In these circumstances they approached the lessor who definitely declared that the lease was a permanent one and gave the lessees the right to erect buildings. By so acting the lessor dissipated any doubt that remained in the mind of his lessees and induced them to spend money, in building which, it is found, they never would have done but for the representation made. The suggestion that the representation was a mere expression of opinion was argued before the officiating District Judge but was rejected by him and in my opinion rightly. The finding of the officiating District Judge who had the evidence before him is conclusive on this question of fact and it could not be reopened in second appeal.

The case of Jordon v. Money was also referred to in argument and relied on by the respondent. From the facts found in that case it would appear that the representations relied upon were taken to amount merely to an expression of present intention by Mrs. Jordon which created no estoppel fettering her future conduct or preventing that lady from changing her mind. It was found that she never agreed to give-up her legal rights but merely intimated that she had no present intention of enforcing them, and any one who speculated upon the slender chances of a lady remaining of the same mind could not afterwards complain if his venture turned out unprofitable. The representation may well have been true as to the state of affairs existing at the time it was made, and it was none the less true because subsequently Mrs. Jordon's intention altered. The representation in the present case cannot be regarded as the mere expression of an intention. It is in the nature of a declaration of the tenants' rights and a direct invitation to them to act upon it which in consequence they did.

It was further contended by the learned Counsel for the respondent that the proper course, if our judgment should be against him on the point of estoppel, was to grant him a decree of ejectment giving the appellants compensation for the sums expended by, them on the buildings. In my opinion no reason has been shown why this course should be adopted and it is manifest that the mere cost of building would not adequately compensate the appellants for the loss of the land in connection with which after erecting permanent structures at considerable expenses they have established a large business connection. In my opinion the proper course to follow is to dismiss the plaintiff's claim. I would allow this appeal and dismiss the suit with costs here and in the Courts below.

Mullick, J.:— I agree.

Appeal allowed.