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Full Bench Opinion — Summary

Factual and Procedural Background

The Defendants held land under a lease from the Plaintiffs. Under that lease the Defendants agreed to pay a specified total rent, and by express stipulation a large portion of that sum was to be paid by the tenant directly to third parties (the landlords of the Plaintiffs' landlord). The Defendants failed to make those payments to the third parties. The Plaintiffs sued. An objection was taken in the lower Division Court that the claim was a suit for damages amounting to less than 500 rupees and that, therefore, a second appeal to this Court was barred by section 586 of the Code of Civil Procedure. The Defendants claimed that the action was a suit for arrears of rent and that a second appeal therefore lay. The Divisional Court referred the matter to a Full Bench because of an apparent conflict between the cases Rutnessur Biswas v. Hurish Chunder Bose and Mohebut Ali v. Mahomed Faizullah, asking whether "the money for which this suit has been brought is rent or not."

Legal Issues Presented

  1. Whether the money for which the suit was brought is rent (i.e., arrears of rent) or not.
  2. Consequentially, whether a second appeal to this Court lies (specifically whether the suit is barred from a second appeal by section 586 of the Code of Civil Procedure because it was pleaded as damages under Rs. 500).

Arguments of the Parties

Plaintiffs' (Appellants') Arguments

  • The Plaintiffs described the suit in the heading of the plaint as a "suit for damages" and quantified damages as Rs. 185-8 annas.
  • On that footing, they relied on the proposition that a second appeal is barred by section 586 of the Code of Civil Procedure when the claim is a suit for damages of less than Rs. 500.

Defendants' (Respondents') Arguments

  • The Defendants contended that the claim was for arrears of rent (i.e., the sums were rent due under the lease) and that, if so, a second appeal lies despite the monetary amount.
  • They relied on the terms of the lease and the character of the sums claimed to support treating the claim as for rent rather than mere damages.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rutnessur Biswas v. Hurish Chunder Bose Whether sums payable under arrangements involving third parties are recoverable as rent or only as damages; used as a controlling authority by the lower Court and discussed as potentially in conflict with Mohebut Ali. The Full Bench examined and debated whether Rutnessur is distinguishable on its facts. Prinsep, J. considered Rutnessur distinguishable (because in that case the defendant was not the tenant of the plaintiff and the sums were payable under an assignment accepted by a third party); Macpherson, Ghose and others ultimately treated Rutnessur as not distinguishable in principle from the present case, but the majority concluded that on the facts before them the sums in the present lease were rent recoverable as such.
Mohebut Ali v. Mahomed Faizullah Similar factual situation to the present case; used to show that courts had previously treated analogous cases as involving arrears of rent. The opinion notes that Mohebut Ali was "on all fours with the present case" and that in that case Ghose and Stevens, JJ., had distinguished Rutnessur. Ghose, on further consideration in the present matter, stated that in principle Mohebut Ali is not distinguishable from Rutnessur; nevertheless, the Court held the present claim to be for rent.

Court's Reasoning and Analysis

The Full Bench considered the single question referred by the Divisional Court — whether the money sued for is rent — because the right to a second appeal depends on that characterization under section 586, Code of Civil Procedure. The Court's analysis proceeded through individual opinions by the Judges:

  1. Prinsep, J.
    • Distinguished the present case from Rutnessur Biswas on the ground that in Rutnessur the plaintiff was not the landlord of the defendant (the defendant was tenant of the plaintiff's tenant) and the sums sued upon were payable to the plaintiff only under an assignment accepted by a third party; here the dispute is between landlord and tenant and the sums to third parties were nevertheless regarded by the lease as rent due to the landlord.
    • Relied on the explicit terms of the lease: the tenant agreed to pay a total, with a specified portion to be paid to third parties, and the lease declared that default in paying the specified amount would be "dealt with according to law." The lease also conditioned the grant of the yearly dakhila (receipt) on the tenant producing proof of payment to the third parties.
    • Concluded that the sums payable to third parties did not cease to be rent merely because the tenant agreed to pay them directly to those third parties; upon default the Plaintiffs were entitled to sue for the moneys due as rent and a second appeal therefore lies.
  2. Macpherson, J.
    • Disagreed with Prinsep, J.'s distinction of Rutnessur, finding nothing in the report to show that the assignment in Rutnessur had been accepted by the assignee any more than in the present case.
    • Held that in the present case the sums were a part of the entire rent which the Defendant undertook to pay to the Plaintiff; the arrangement as to mode of payment (direct to third parties) and the absence of any acceptance by a third-party assignee did not convert the sums into non-rent.
    • Emphasized that the Plaintiff did not lose the right to recover the sums as rent because there was to be no discharge for rent unless the tenant produced the requisite receipts; therefore the claim is for rent and a second appeal lies.
  3. Ghose, J.
    • On further consideration thought that Mohebut Ali and Rutnessur are not distinguishable in principle, though the cases may have distinguishing features.
    • Concurred with the view that the claim in the present case is for rent and that a second appeal lies.
  4. Hill, J.
    • Considered that the precise question referred (whether there was an assignment of rent) did not arise because nothing indicated that there was an assignment of rent in the present case.
    • Placed substantial weight on the procedural posture and pleadings: the Plaintiffs had framed the suit as one for damages in the heading of the plaint and the Munsif and the parties had treated the suit as one for damages in earlier stages; the Munsif had held the amount recoverable as damages on the authority of Rutnessur.
    • Would have been inclined to hold, on these grounds, that a second appeal did not lie (because the suit had been prosecuted as damages of less than Rs. 500), but deferred to the majority view and therefore concurred with their ultimate answer.
  5. Stevens, J.
    • Concurring with Macpherson, J., Stevens, J. agreed that the money was rent and recoverable as such and that a second appeal lay.

The Court also noted that plaintiffs could, if required, claim damages for any expense or loss occasioned by the tenant's default in making the agreed payments, but that such a claim for damages would not alter the character of the rent claim itself. The Court confined its opinion to the effect on the present suit, observing it was unnecessary to express any broader view beyond the present case.

Holding and Implications

Holding: The Court held that, in the circumstances of this case, the amount claimed is rent (a claim for arrears of rent) and that a second appeal to this Court lies.

Implications and immediate orders:

  • The Full Bench remanded the suit to the lower Appellate Court for trial, particularly with reference to the objection that a portion or the whole of the claim may be barred by reason of section 43 of the Code of Civil Procedure (the Bench stated it had no materials on which to decide that issue).
  • The lower Appellate Court was directed to consider any points properly raised before it on this appeal, having regard to the character of the suit as a suit for arrears of rent.
  • The costs were ordered to abide the result (i.e., costs to be decided later based on the outcome on remand).

The Court indicated that its opinion was addressed to the present case alone: "It is, I think, unnecessary to express any opinion on the point referred to us except so far as it relates to this suit." No broad new precedent was asserted beyond the Court's conclusions as applied to these facts.

S.C.S
Case remanded.

    Basanta Kumari Debya v. Ashutosh Chuckerbutty

    Prinsep, J.:— In the lease under which the Defendants held certain lands from Plaintiffs, they agreed to pay a certain amount of their rent to third persons. They have failed to do so. Hence the suit now before us on a reference from the Division Court before which the second appeal came on for hearing. Objection was taken before that Division Court that this is a suit for damages for a sum less than 500 rupees and that consequently a second appeal is barred by sec. 586 of the Code of Civil Procedure. On the other hand, the Defendants claimed the right of second appeal on the ground that this was a suit for arrears of rent. The Divisional Court has referred this case to a Full Bench in consequence of the cases of Rutnessur Biswas v. Hurish Chunder Base and Mohebut Ali, which, in the opinion of the learned Judges, were in conflict on this point and we are asked to find “whether the money for which this suit has been brought is rent or not.”

    I was one of the Judges who decided the case of Rutnessur Biswas, and I think that case is distinguishable both from this case and the case of Mohebut Ali, with which it is stated to be in conflict. The report of the case of Rutnessur Biswas shews that the Plaintiff and Defendant were not landlord and tenant. The Defendant was the tenant of the Plaintiff's tenant and in the agreement with his landlord, he accepted the conditions under which his landlord undertook to make payments of the rent to third parties and this was accepted by the superior landlord, the assignee. The present case is between landlord and tenant and the matter in dispute is the non-payment of the rent due by the latter to a third party. This was money due to the Plaintiff as rent. In Rutnessur's case the money was payable to the Defendant's landlord and was payable under an assignment to a third party who accepted the assignment and sued on it. Herein in my opinion lies the difference in the two cases. The money claimed in Rutnessur's case was never payable as rent by the Defendants to Rutnessur as his tenant but it was due under an assignment by the Defendant's landlord which was accepted by Ryasona, the predecessor of Rutnessur, the document on which the suit was brought being the kabulyat executed by the Defendant not in favour of Plaintiff or his predecessor Ryasona but in favour of Ryasona's tenant. That this was so appears both from the report of the case which is not carefully expressed and from the judgment itself. The report by the reporter states that the dar-ijara lease granted to Defendant by Ryasona's tenant was “confirmed” by Ryasona. That was a confirmation of the assignment made in the kabulyat granted by Ryasona's tenant to Defendant. The suit was brought on this kabulyat. My memory of this case in which I was a party is confirmed by the plaint to which I have referred which shows that over and above the moneys payable to Ryasona thus assigned, there was also money payable by the Defendant to his own landlord. The judgment moreover shows that the Defendant was not regarded as the tenant of the Plaintiff. The fact that a portion of this money was under the assignment payable to Ryasona's landlord is immaterial, for none of it was payable to Ryasona except under the assignment and the Defendant was never Ryasona's tenant. I observe that in Mohebut Ali v. Mahomed Faizullah, a case admittedly on all fours with the present case, Ghose and Stevens, JJ., distinguished that case from the case of Rutnessur.

    The determination of the matter before us depends on the terms of the lease which are set out in the reference. Under that lease the tenant agreed to pay Rs. 521-1 anna 6 coras 3 krantis to the Plaintiffs. But it was stipulated and agreed that out of this sum the tenant should pay Rs. 493-10 annas 1 cora 1 kranti to third parties who were the landlords of his landlord, and it was further provided that “after paying these amounts of sudder rent you (the tenant) shall pay us (the landlords) Rs. 27-7 annas 4 coras 5 krautis (?) in cash according to instalments. Upon your making over to us at the end of the year the dakhilas showing payments of sudder rents to the landlords for which an assignment is made to you we shall only grant to you a dakhila for the whole amount.” The lease further declared that “should you make default in paying the specified amount of rent yon shall be dealt with according to law.” According, therefore, to the terms of the lease, the sums payable to third parties were regarded as rent due to the landlord but under the agreement between the parties, a portion of the entire rent payable was to be paid to third parties. Those third parties did not accept this arrangement and would consequently look to the Plaintiffs for payment and it seems to me that having regard to this as well as to the terms of the lease, the portion of the rent which the tenants Defendants, agreed to pay to third parties did not cease to be rent by reason of that agreement. As soon as they failed to make such payments to the third parties the Plaintiffs were entitled to sue for the moneys so due and they could not be restrained until they had been compelled by the third parties to pay themselves. No doubt it might happen by the default of the tenants Defendants that the Plaintiffs might be put to the expense of defending a suit. In that case they would be entitled to claim as damages any money for which they might have become liable on this account or for any other cause. But that would not affect the amount of rent for payment of which the lease had been granted or make the money which the Defendants had failed to pay to the third parties other than rent. It is significant that by the terms of the lease, a dakhila for the rent of each year was not to be granted until the Defendants had given proof of the payment to the third parties. I am accordingly of opinion that this suit is a suit for arrears of rent and that consequently a second appeal lies. It is, I think, unnecessary to express any opinion on the point referred to us except so far as it relates to this suit.

    Macpherson, J.:— I cannot distinguish the case of Rutnessur Biswas v. Hurish Chunder Bose from the present case on the ground stated by Mr. Justice Prinsep, for I see nothing in the report of that case to indicate that the assignment of the rent under the arrangement between the landlord and the tenant had been accepted by the assignee who was a third party, the zemindar, any more than it was accepted in the present case. In Rutnessur's case Kyasona Dasi gave an ijara to Gobind Chunder Sircar and one of the conditions was that Gobind Chunder should pay a specified portion of the rent to the zemindar who was Ryasona's landlord. Gobind Chunder gave dur-ijara to Harish Chunder Bose subject to the conditions under which he himself held and then resigned the ijara. Eyasona confirmed the dur-ijara to Harish Chunder, who thereupon became her tenant, and afterwards transferred her entire right in the land as well as the right to receive the dur-ijara rent to Rutnessur Biswas. Harish Chunder thus became the tenant of Rutnessur who sued him for rent which became due after the transfer and included in his claim that portion of the rent which Haris Chunder ought to have paid to the zemindar. It was this portion of the rent which the Court treated as having been assigned to a third party, that is to say, the person who was in the first instance the landlord of Ryasona and afterwards of Harish Chunder, and therefore recoverable not as rent but as damages. The fact that there had been a transfer of the landlords' as well as of the tenants' right made, it seems to me no difference as regards the question which was decided. In the present case as in Rutnessur's case, the Plaintiff seeks to recover from the Defendant his tenant a portion of the rent which the tenant undertook to pay, but did not pay, to certain persons who were the landlords of the Plaintiff his lessor, and the question is whether this money is recoverable as rent or as damages. If it is rent a second appeal will lie, if it is not rent there is no right of second appeal.

    In my opinion the money is rent and recoverable as such, and it did not cease to be rent by reason of the so-called assignment, an assignment to which the assignee was not a party and which was not accepted by him. The money was undoubtedly a part of the entire sum which the Defendant undertook to pay to the Plaintiff his landlord as rent for the use of the land. According to the term of his lease he was to pay this money on the Plaintiffs account to certain persons who were the Plaintiff's landlords; he was to take from them receipts in the Plaintiff's name for the money so paid and at the end of the year he was to produce those receipts and take from the Plaintiff a receipt for the entire amount of the rent inclusive of the balance which he was to pay to the Plaintiff direct. This I think clearly shows that in the contemplation of the parties the money did not cease to be a part of the rent or recoverable as such. If the Defendant defaulted to pay the money in the way agreed on between himself and his landlord, the assignee had no cause of action against him and the Plaintiff never in any way lost or waived his right to recover the money which was not so paid as a part of the rent. In fact there was to be no discharge for the rent unless and until the Defendant produced the receipts for the payments which he undertook to make. But, assuming that as a general rule rent as such cannot be assigned in the present case, there was, I consider, no such assignment of the money sought to be recovered as to deprive it of its character as rent, and the Plaintiff did not by the arrangement made with his tenant as to the mode of payment lose his right to recover it from him as a part of the rent. If the money is rent and recoverable as such the Plaintiff cannot, I conceive, by seeking to recover it as damages and calling his suit a suit for damages alter the real character of the suit and deprive the Defendant of the right of appeal to which he would otherwise be entitled. It is possible of course that he would be entitled to add to his claim for the rent a claim for damages, if he had suffered any damage by the Defendant's failure to adhere to the arrangement, but this does not, I think, affect the question now raised.

    I would therefore say that the amount claimed is rent and recoverable as such and that a second appeal lies.

    Ghose, J.:— I agree with Mr. Justice Macpherson in the view that he has expressed with reference to the observation which Mr. Justice Prinsop has made as to what I and Stevens, J., held in the case of Mohebut Ali. I desire to say that though at the time I thought that the case of Rutnessur was distinguishable yet on further consideration of the facts of that case, as are to be gathered from the report, and the judgment in the case I think that, in principle they are not distinguishable, though no doubt there are some distinguishing features.

    I hold that the claim in this case is for rent and that a second appeal lies to this Court.

    Hill, J.:— The precise question referred to us does not, I think, arise on this appeal since there is, so far as I can perceive, nothing in the case to indicate that there was an assignment of rent. It is however remarked in the order of reference “The question for determination then that arises at the outset is whether the money for which this suit is brought is rent or not?. If it is rent, a second appeal will lie. If it is not rent, a second appeal is barred by sec. 586 of the Code of Civil Procedure.” And it was to this question that the argument before us was directed. It was, I think, open to the Plaintiffs to frame their suit either as a suit for the recovery of rent or as a suit for damages for breach of the agreement to pay a portion of the rent to the Plaintiff's landlord and in answering the question stated above, I should feel disposed to lay greater stress on those considerations which bear more immediately upon the pleadings in the suit and on the understanding of the parties and of the Courts below with respect to it than upon those which concern the question whether the sums which the Defendants failed to pay to the Plaintiffs landlord retained the character of rent. They may have done so but assuming that they did, that in itself would not, it appears to me, be conclusive of the question before us, which, as I understand it, is not whether a suit for damages for breach of the agreement would lie but whether the suit, as framed, is to be regarded as a suit for rent or a suit for damages as distinguished from rent and it is upon the answer to the latter question that the right of appeal depends.

    The Plaintiffs have undoubtedly described the suit in the heading of the plaint as a “suit for damages” which damages they lay at Rs. 185-8 annas, and I find nothing in the body of the plaint inconsistent with such a claim. The Defendants in the 3rd paragraph of their written statement took exception to the form of the suit, and the question thus raised formed the subject-matter of the 2nd issue in the Court of 1st instance and was determined by the Munsif on the authority of the case of Rutnessur Biswas v. Hurish Chunder Bose in favour of the Plaintiffs. What the Munsif says on the subject is this:—“I am of opinion that the amount claimed can be recovered not as rent but as damages. The suit in its present form does therefore lie.” It is, I think, clear that, in its earlier stages, the parties themselves treated the suit as one for damages and they moreover went to trial upon the issue whether being a suit of that nature, it would lie. I should not myself under these circumstances feel disposed to allow the Defendants at the present stage to change their ground and to treat the suit now as one for rent so as to secure for themselves a right of appeal which they would otherwise not possess. It is, I think, to be borne in mind that we are not now dealing with a merely abstract question, but the whole case being under the rules of Court before us for decision, considerations applicable to it in particular ought to be allowed due weight. On the grounds then that the suit was launched by the Plaintiffs as one for damages, and that it was so treated and understood in the Courts below, I should feel inclined to answer the question whether a second appeal lies in the negative. But as the rest of the Court are of the contrary opinion, I ought, I think, in the view I take of the scope of the question now before us to defer to them and I accordingly concur in the answer which they propose to give to the reference.

    Stevens, J.:— I concur in the judgment which has been delivered by Macpherson, J.

    I agree with Ghose, J., in thinking on further consideration that in principle the case of Mohebut Ali is not to be distinguished from that of Rutnessur Biswas.

    The Court (all concurring):— The suit will therefore be remanded to the lower Appellate Court for trial, more specially with reference to the objection taken that a portion if not the whole of the claim is barred by reason of sec. 43, Code of Civil Procedure; we have no materials upon which wo can decide this issue. The lower Appellate Court will also consider any points which may have been properly raised before it on this appeal, having regard to the character of the suit as a suit for arrears of rent. The costs will abide the result.

    S.C.S
    Case remanded.

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    Basanta Kumari Debya v. Ashutosh Chuckerbutty
    (Aug 7, 1899)