# Babasaheb v. West Patent Ca., Ltd., l.L.R. 1954 Born. 448

- **Citation:** [1962] 3 S.C.R. 876
- **Court:** Supreme Court of India
- **Decided:** 1960-12-23
- **Bench:** B. P. Sn:n.~. C. J, P. B. GAJENI>!tAGADKAH aml RAGIIL"BAR DAYAL
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/babasaheb-v-west-patent-ca-ltd-l-l-r-1954-born-448-2480
- **Pages:** 18

## Headnote

/,east-Oonstruction-Le81'1t:t: taki11y leaee of agricultural la1u:i
for uuildin9 purpase .. -'f'erm.,, if crealt a permanent tmancy.
'fhe material rcrrns of the lease in controversy provided
lhal for the first 20 years the lessee was to pay a fixecl rent of
Its. 350/- every year in advance and if he removed Ins faelory
within that period he would still ha,·e lo pay the said rent for
,•
the t\venty years retaining his right to possession; that thereafter he '"·ou!d be free to continue the lease as long as he
~
liked subject to the payment of the annual rent of Rs. 400;-
for the first IO years and thereafter of Rs. 500/- per year,
\vith the right to terminate the lease at any time and the
lessor would not have the right to call upon him to give up
posses~.ion at any time as long as he , .. •anted to keep the land
for his purposes observing the terms of the agreement; that
the lc.'5eC would be entitled to raise buildings, godowns, facto·
ries, b11nglo\\·s or any other structures as he desired; that the
lessor \\'ould pay the annual land assessment to the Govern ..
1nent and the lessee \\'ould pay any fines and taxes imposed by r,.
the Govern1nent for using agricultural JanU for building
purposes; that the lessee \\'Ould be free to sublet or re-let \Vith·
out affecting the terms an<l conditions of the lease and that
the heirs, executors> administrators, successors and assigns of
the lessee as much as those of the lessee would remain bound
by the lease.
'"\ftcr more than l\\'Cnty years had elapsed since the lease,
\vhich \'tas a registered one, had been executed bet,vecn the...,.
predecessors in-interest of the parties, the respondent \Vho •
succeeded to the original lessor's title, brought the suit, out of
, .. ·hich the present appeal arose, for ejcctment of the assignee
of the lessee's interest on the ground that the lease created a
tenancy at ,,·ill and stood determined on service of notice to
quit.
•
The trial court and tho court of first appeal found in
favour of the respondent and decreed the suit. The High Court
in second appeal confirmed the decree but relying on a decision><'""'
of the Bombay High Court in JJavasaheb \'. IVut Patent Co,
Ltd. I.L.R. [19541 !lorn
448, held that after the lapse of
the twenty years the lease \ .. ·as one for an indefinite period and
could cnure only during the lifetime of the lessee and ruch
..
'
3 s.c.R.
SUPREME COURT REPORTS
877
assignees as had. been accepted by the original lessor and since
the present assignee was not one of them he acquired no right
under the lease.
Held, that the lease, read as whole and properly construed,
created a permanent tenancy and not a tenancy at will or one
for an indefinite period valid only
during the life of the
lessee.
It was not correct to say that the stipulation granting the
lessee the right to surrender the lease at any time after the
first t\venty years gave to the lessor, in the absence of such a
provision in the lease itself, the right to call upon the lessee to
at quit any time or that the stipulation was inconsistent with
a permanent tenancy. The presumption attaching to a lease
for building purposes for no fixed period, therefore, was not
weakened in the instant case.
JanakiNathRayv.DinaNathKundu, (1931) 35C.W.N.
982 and Babaa Lekhraj Ray v. Kunhya Singh, (1877) L.R. 4
I.A. 233, referred to.
Babasaheb v. West Patent Ca., Ltd., l.L.R. 1954 Born. 448,
distinguished.
Nava/ram v. Javerilal, (1905) 7 Born. L.R. 401, l'rw,ad,,
Nath Ray v. Srigabind Chau·dhry, (1905) I.L.R. 32 Cal. 648,
Forbes v. Ilanuman Bhagat, (1923) I.L.R. 2 Pat. 452 and
Commissioner of I ncome.-tax v. Maharajadhiraj Kumar V isheshwar Singh, (1939) l.L.R. 18 Pat. 805, discussed.
Ileld, further, that it is always open to a lessee of any
discription to surrender his lease~hold interest to the lessor by
mutual consent. It is not necessary in law that there should be
such con~ent at the time when the surrender is made.
Since in the instant case, the surrender after the lapse of
twenty

## Text

1961
Sc;tunhtr 27.
•
876
SUPREME COURT REPORT~
(19112)
SIVAYOGESWARA COTTON PRESS
DEV ANG ERE AXD OTHERS
'
v .
..'IL l'ANCHAKSHARAPPA AND ANOTHEll
(B. P. Sn:n.~. C. J., P. B. GAJENI>!tAGADKAH aml
RAGIIL"BAR DAYAL, JJ.)
/,east-Oonstruction-Le81'1t:t: taki11y leaee of agricultural la1u:i
for uuildin9 purpase .. -'f'erm.,, if crealt a permanent tmancy.
'fhe material rcrrns of the lease in controversy provided
lhal for the first 20 years the lessee was to pay a fixecl rent of
Its. 350/- every year in advance and if he removed Ins faelory
within that period he would still ha,·e lo pay the said rent for
,•
the t\venty years retaining his right to possession; that thereafter he '"·ou!d be free to continue the lease as long as he
~
liked subject to the payment of the annual rent of Rs. 400;-
for the first IO years and thereafter of Rs. 500/- per year,
\vith the right to terminate the lease at any time and the
lessor would not have the right to call upon him to give up
posses~.ion at any time as long as he , .. •anted to keep the land
for his purposes observing the terms of the agreement; that
the lc.'5eC would be entitled to raise buildings, godowns, facto·
ries, b11nglo\\·s or any other structures as he desired; that the
lessor \\'ould pay the annual land assessment to the Govern ..
1nent and the lessee \\'ould pay any fines and taxes imposed by r,.
the Govern1nent for using agricultural JanU for building
purposes; that the lessee \\'Ould be free to sublet or re-let \Vith·
out affecting the terms an<l conditions of the lease and that
the heirs, executors> administrators, successors and assigns of
the lessee as much as those of the lessee would remain bound
by the lease.
'"\ftcr more than l\\'Cnty years had elapsed since the lease,
\vhich \'tas a registered one, had been executed bet,vecn the...,.
predecessors in-interest of the parties, the respondent \Vho •
succeeded to the original lessor's title, brought the suit, out of
, .. ·hich the present appeal arose, for ejcctment of the assignee
of the lessee's interest on the ground that the lease created a
tenancy at ,,·ill and stood determined on service of notice to
quit.
•
The trial court and tho court of first appeal found in
favour of the respondent and decreed the suit. The High Court
in second appeal confirmed the decree but relying on a decision><'""'
of the Bombay High Court in JJavasaheb \'. IVut Patent Co,
Ltd. I.L.R. [19541 !lorn
448, held that after the lapse of
the twenty years the lease \ .. ·as one for an indefinite period and
could cnure only during the lifetime of the lessee and ruch
..
'
3 s.c.R.
SUPREME COURT REPORTS
877
assignees as had. been accepted by the original lessor and since
the present assignee was not one of them he acquired no right
under the lease.
Held, that the lease, read as whole and properly construed,
created a permanent tenancy and not a tenancy at will or one
for an indefinite period valid only
during the life of the
lessee.
It was not correct to say that the stipulation granting the
lessee the right to surrender the lease at any time after the
first t\venty years gave to the lessor, in the absence of such a
provision in the lease itself, the right to call upon the lessee to
at quit any time or that the stipulation was inconsistent with
a permanent tenancy. The presumption attaching to a lease
for building purposes for no fixed period, therefore, was not
weakened in the instant case.
JanakiNathRayv.DinaNathKundu, (1931) 35C.W.N.
982 and Babaa Lekhraj Ray v. Kunhya Singh, (1877) L.R. 4
I.A. 233, referred to.
Babasaheb v. West Patent Ca., Ltd., l.L.R. 1954 Born. 448,
distinguished.
Nava/ram v. Javerilal, (1905) 7 Born. L.R. 401, l'rw,ad,,
Nath Ray v. Srigabind Chau·dhry, (1905) I.L.R. 32 Cal. 648,
Forbes v. Ilanuman Bhagat, (1923) I.L.R. 2 Pat. 452 and
Commissioner of I ncome.-tax v. Maharajadhiraj Kumar V isheshwar Singh, (1939) l.L.R. 18 Pat. 805, discussed.
Ileld, further, that it is always open to a lessee of any
discription to surrender his lease~hold interest to the lessor by
mutual consent. It is not necessary in law that there should be
such con~ent at the time when the surrender is made.
Since in the instant case, the surrender after the lapse of
twenty years had in terms been agreed to by the parties and
that stipulation was for the benefit of the lessee, it could not be
construed as in derogation of his right to a permanent
tenancy.
CIVIL APPJlLLA'rE Ju1usmm10N: Ci\·il Appeal No.
324 of 61.
Appeal by special leave from the judgment aud
decree elated December 23, 1960, of the MysoN
High Court in Second Appeal No. 61 of 1954.
C. K. Daphtary, Solicitor-General of India, J. B.
Darlachanji, Ravinder Narain and 0. C. Mathur, for
the appellants.
R. Ganapathy Iyer and G. Gopalakrishnan, for
the respondent No. 1.
1961
SivayfJ:eswara Cotton
Press, Devanzere
v.
M. Panchaksharapjla
11111
SiNJogeswora CottM
Pr1ss, Daanitre
v •
. IJ. Pa,.,hakshMap;a
Sinha C.J.
878
suPREME COuttT REPoRTS
(1962j
1961. September 27.
The Judgment of the
Court was dolivcred by
SJXIIA, C •• T.-This appeal by special le1we
granted by this Court on April 20, 1961, is directed
against tho concurrent decisions of the courts
below decreeing the plaintiff's suit for ('jectrnont
on the ~round that tho defendant is a tenant at ·will
and negativing the appelhnts' claim to a permanent
tenancy.
The
controversy betTI·een the partios
depends upon tho truo construction of the lease
dated October 26, 1914,
executed
between tho
prcdect·ssors·in-interest of the parties to the present
litigation.
The facts leading up to this appeal arc· as
follows:-
One N. J. Gamodia. of Bombay took on loaso
a piece of a.gricultural land moasuring a.bout 4 1 /2
acres belonging to one Gurupadappa. of Dovangcro
City for tho purpose of erecting a
Ginning and
Pressing Cotton Factory. The terms of the register·
ed lease deed dated October 26, 1914, in so far as they
arc material for the dcteimination of this appeal
are hotter stated in the relevant portions of the
deed itself:-
"l. For tho lat period of 20 (twenty)
yea.rs commencing from tho 1st October, 1914,
ond ending on tho 30th day of September,
l!J34, you shall pay to mo Hs. 350/- (throe
hundred and fifty) rupees being the annual
rent reserved every year in advance ond
obtain froper receipts of the payment from
me. I
before the expiration of the said
period of 20 (twenty) years you will remove
your factory from the said land hereby leMed
you are bound to pay mo annually the ront
of Ra. 350/. (three hundred and fifty rupees)
for the (torn) 20 (twenty) years but you a.re
entitled to retain in possession of and the
road till the 30th September, 1934.
•
•
•
a.s.c.:R.
SUPREME COURT REPORTS
S79
2.
After the expiration of the said period
of 20 (twenty) years mentioned in the 1st
clause hereby you shall be at liberty to continue the lease of the said land and the said
road and keep the said land and the said road
in your possession as long as you may desire
to do. In case of your thus continuing the
lease of the said land and the said road you
shall pay to me annually the sum of Rs. 400/-
(four hundred rupees) as rent of the said land
and tho said road for 1st ten years beginning
from the 1st October, 1934, and ending on the
30th September, 1944, and after the expiration of the period of ten years the annual rent
payable by you for the said !ant: and the said
road will be Rs.500/- (five hundred rupees) per
annum but you shall always be at full liberty
to give up the said land tl>e said road and
terminate this lease at any time you may
desire so to do after the 1st October, 1934,
and the rent payable in respect of the said
land and the said road shall cease to be paid
by you from the time you may give up the
said land and the said road after the lst
October, 1934. But I agree and bind myself
not to call upon you at any time to give up
the possession of the said land and the said
road as long as you may desire to keep the
same for your purposes observing the terms of
this agreement.
3. . ................................................ .
4.
o o o O 0 o o o o o o o I 0 0 o o 'o o o o o o o o o o o o 0 o o 0 0 0 0 o o o o o 0 o oOO o o o
5.
You are at full liberty to erect, as
many buildings, godowns, factories, bungalows
and other structures etc. as you may desire
on the land hereby leased and to pull down,
re-erect and make any alterations in the same
as you may desire. I shall not raise any
objection to your erecting any such structures
on the land or to your use, and enjoyment of
1961
Siuayogeswara Co!ton
Press, Devangere
v.
M. I'anchaksharappa
Sinha C. ].
1961
Siv'Y'lt111·c111 G•t
1 ~n
Puss, Deuar.:trt
v.
}.I. PcnchaAsh•r•;;a
s;..i,. c. J.
880
SUPREME COGRT REPORTS
[HJ62]
the lane~ in any way or fur auy purpoeo as you
may desire.
G.
. ................................................ .
7.
I hold my~elf Iiab!P to pay always tho
annual nBScsamcnt of the land hereby Joased
to Government you shall not be li:1blo for
such land 11ssessment.
Rut yon shall be
liable to pay all fint•s and othl·r taxes which
the Government will horcaftcr impose for
havini? com·orted the arable or cultivable
land into
Janel for factories and building
purposes.
8.
9. . ................................................ .
10.
You
sh>1ll be nlwaya entitled 1111cl
have full libertv to sublet or re-let thC' said
land together '~·ith the said roar! for any purpose to any other person or persons on any
conditions you like but without. affecting in
the least any of the conditions or t~rme of this
leai!e.
II.
12.
13.
. ............................................... .
. ........................ " ..................... .
. . . . . . . . . . . . . . . . . . . . . . . . . . ................... .
14. This lease is binding on me, my
heirs, executors, aclministrators, successors
and assigns as well as on your heirs, exccu·
tors, administrators, successors aml 1issigns.
I have hereby by this writing granted you
this lease by my own freo will and in my full
senses nncl I bind myself to abide by its
terms and cumlitions mentionccl above".
The said lessee, ?\. ,T. Gamodia cliccl in HJ lli
lcaYing a will appointing executors to look after
his affairs. The executors assigned the lease to the
second clefcndant, Gamodia Factories Limited by a
deed elated November 2i,
rn:~:l. The as>ignec like
the ori~inal tenant continued to pay the stipul1.1.ted
ront to the lessor Gurupadappa till his death which
-
i
3 S.C.R.
SUPREME COURT REPORTS
881
occurretl in May, U~39. The second defendant in
ifis turn assigned its leasehold interest to the first
defendant by a deed datetl May 30, 1944.
It is
common ground that the leasehold property contains factory, buildings and residential quarters.
Aftor the lessor's death his two widows continued
to receive rent from the lessees as usual.
The
plaintiff is the n,dopted son of the original lessor
and was a minor till some time in 1949.
The
plaintiff sought to terminate the tenancy by issuing
notices to the defendants on the ground ( 1) that
the lease had created a
tenancy at will in the
events that had happened; and (2) that the original lessee had in contravention of the terms of the
lease assigned the benefits under the lease in
favour of tho defendants. As the defendants did not
vacate the premises and deliver possession of them
to the plaintiff, in terms of the notice aforesaid, he
instituted the suit giving rise to the present appeal
for a declaration that the defendants were tenants at
will and that their possession after service of notice
was wrongful. The suit was resisted by the first
defendant principally on the ground that the lease
created not a tenancy at will as claimed by the
plaintiff but a permanent tenancy, hence there is no
question of the defendant being ejected on the
grounds alleged in the plaint.
The courts below have decreed the suit and
ordered the defendant-appellant to give up possession. In the trial court, a number of issues 'vere
struck between the parties. The most important
issue upon which the result of the litigation largely
depended was the one relating to the nature of the
lease crca.ted by the lease deed aforesaid. The trial
court held thn,t it was a lease for 20 years certain,
and on the effiux of that period on October 26, 1934,
the second defendant bec'lJ:llc n, tenant at will and
as such the tenancy could be terminated at the will
of either party, the second defendant and the first
defendant were liable to be ejected on service of the
1961
Sivayogeswara Colton
Press, Devan:.re
v.
M. Panchaksharappa
Sinha C. J.
1161
SivnyottJwara Collon
Presz, Dtoangt"
v.
M. Pancha!sha"ippa
Sinha C. ].
SUPROO COURT REPORTS
[HJG2j
necessary notice, which is found to have been properly served.
In the result, the plaintiff's suit was
decreed with cost8 and the drfendantll wcrc directed
to qnit the lanrl and the road ann<.'X<:tl to tho land.
and to n»tore poFSl
0Ssion of the premises to tho
plaintiff after removing the iron and steel rnachinory.
and other appurtenances of the factory, but leaving
intact the n·sidential quarters and th<> appurtenances
of those <Juarters. On appeal by the d!'fendants,
the lower appellate court affirmed the finding of
tho trial CfJurt and dismissed tho appeal with this
modification that the defendants were givt>n six
months' time to restore possession to the plaintiff
after removin!! their machinery etc. The lowor
appellate court made some other modifications also·
which aro n0t ma.teri1il to this appee.I.
On second .
appeal by the first defendant, the High Court dis.
missed the appeul with costs, but modified the
findings of the two courts below in so far as it helrl
that after the lapse of the first 2() years of the leaae,
the tenancy was not. a tenancy at will, but a tenancy
for an indefinite period which would be valid for
the lifetime of the lessee himself as also of the
transferees of the lessee namelv the second defen·
dant, which is the compa~y in&BIIluch aR tho
original lessor in his lifetime had accepted tho
assignment of the leaRc in favour of tho second
defendant. The High Court also held that as the
second defendant was admittedly no longer in
possession of the leasehold and as there has been
an assignment to the first defendant, the transfer
was not binding on tho plaintiff and therefore the
first defendant did not become the plaintiff's ten<1nt.
In that view of the matter, tho judgment and decree
of the courts below were confirmed with the modi·
fication that the appellants were given four month's
time to vacate and deliver possession of the
premises to the plaintiff.
The first defendant made an application to
the High Court for the necessary certificate
o~
fitness for coming up in appeal to this court, but
the High Court by its order dated March 29, 1961,
•
-.
3 S.C.R.
SUPREME COURT REPORTS
883
refused to grant the certificate.
As time was
running against the first defendant, he hurried up
to this court by a petition for special leave to
appeal dated April 10, 1961. On April 20, 1961,
this court granted special leave to appeal. That is
how the matter comes before us.
The controversy between the parties must be
determined on a reference to the terms of the lease
deed on a proper construction of which the rights
and obligations of the parties must be determined.
If it is held that after the lapse of the first
20 years of the lease, the defendants became
tenants at will, there is no answer to the claim for
possession of the premises. If it is held, as it had
been held by the High Court, that the second defendant's interest as an assignee of the original leirnee
created a lease for an indefinite period in favour of
the assignee which would enure for the life of the
assignee namely the company, then the further
question will arise whether or not the first defendant
appellant before us had acquired the same interest
by virtue of the transfer in his favour. That is one
of the alternative arguments raised on behalf of the
appellant by his learned counsel.
The learned
counsel for the appellant also mentioned the ground
founded on the provisions of the Mysore Rent Act ;
but as that defence has not been raised in the
pleadings of the defendant and as that point has
not been canvassed in the High Court, we ruled
that we shall not permit that contention to be raised
here. But the substantial ground on which this
appeal has been pressed upon us is that by virtue
of the lease deed of the year 1914, on a proper
construction of that grant, a permanent tenancy
was created. If that is so, it is ctimmon ground
that the suit must fail.
Naturally therefore,
the main argument at the bar on both sides has
been devoted to the question, whether or not the
le:ise deed evidences a perpetual grant to the lessee
on the terms aQd coQditions contained in the lease
Q.eed,
1961
Sivayogtswa·a Cotton
Aess, DevangeY'e
v.
~I. Panchaksharappa
Sinha C. J.
IHI
SiMJ'Ottsworii Collon
Prtss. Du·1u1:~rt
Vo
JJ. P•nchakslrm•PPa
Sinha C.J.
884
SUPREME COURT REPORTS
Addressing ourselves to that question, it is
clear on a construction of the document Ex-I that
it was a lease of the demised premises for a term
of 20 years certain, on payment of Rs. 350/- annual
rent in ad \"anco, even though tho lcssco may not
continue to occupy the demised land ; that the
lessee hatl been granted a right to continue the lease
of the demised premises as long aa tho lo!IBee desired
to <lo so ; that on his choosing to continue to enjoy
the leasehold, the lesseo was obliged to pay annually
tho enhanced ront of Hs. 400/- for the next ten
years after Octolier I, I!Ji!4, a.nd after tho expiration
of tho ten yea.rs aforesaid, the rent was further
enhancecl to the sum of HR. 500/- per annum ; that
the lessee was given the option to give up tho lease
at any tinw after October I, 19:H, without any
further liability for payment of tho stipulated rent ;
that (and this is a very important stipulation) the
lP.ssor bouncl himself not to call upon the lessee at
any time t.o give up possrssion of tho lease-hold as
Jon~ as tho lessee was prepared to observe the terms
of tho lease, that the lessee was fully authorised
"to erect, as many buildings, godowns, factories,
lmngalows and other structures etc.," 11s also to pnll
down am! re-erect structures or to make any altcrati011>, as clesirod by him ; that the lessor undertook
not to raise any' objection to the lessee making
thoRc structures or his using or enjoying the land
in rmy way or for any purposes according to his
rlesiro; that the lessor undertook to pay the annual
assessment to Government in respect of the demised
prem iHos but the losscc was obligecl to pay all fines
and otlwr taxes which Government might impose
for gra11ting permission to com·ert tho eultura.blo
hntl into land meant for building factories and
other
~trn<:tt11es as c'.lntomplated betwoen tho
parties, that if the lessee chose to give np posseBBion
of tho demised premises, he shall be entitled to
take mrny nil machinery, iron and steel, woodworks
etc. of the factories, buildings and other structures
that may be standing, that in the event of a default
in the payment of the annual rent fixed as aforosa.id
.,.
•
--- --.
•
3 S.C.R.
SUPREME COURT REPORTS
885
upon notice of demand served upon the lessee, the
lessor reserved the right to re. take possession of the
demised land. The lessee was also declared by
para. 10 quoted above to be always entitled to
sub-let or re-let the demised land to any person
and on any terms. As the lease was apparently for
the purpose of converting agricultural land into
factory premises necessary for running the factory,
it was specifically proTided that if the Government
refused to give the necessary permission for setting
up the factory, the lease shall be deemed to be
cancelled. Para. 13 also contains a stipulation
that the heirs and assigns of the lessor shall have
no right to disturb the lessee in peaceful possession
of the demised premises, and that in the event of
any such interference, the lessee shall be entitled to
claim damages for the loss suffered by any action
on the part of the lessor or his heirs or su~cessors.
Para. 14 is also a very important clause in the
lease deed, which though coming as the last clause,
must govern all the stipulations between the
parties. Thus the terms and conditions of the
lease which created the rights and
obligation~
between the lessor and the lessee were specifically
declared to be binding on the heirs and successors
in interest of the lessor and the lessee.
It is manifest, therefore, on a plain construction of the terms aforesaid of the lease deed that
the purpose of the transaction was a building lease
that though there was liberty reserved for the
lessee or his successor to give up the lease-hold at
any time after October 1, 1934, no corresponding
right was reserved to the lessor.
Thus there is no
room for the controversy which ha11 occupied a
large portion of the judgments of the courts below,
that reservation of the right to the lesser to
surrender possession at any time, imported a
corresponding right to the lessor to call upon the
lessee to give up possession. It was an advantage
specifically reserved to the lessee without &ny corresponding benefit to the lessor. It i1 equally olear
Sivay1:eJwara C1tt1n
Press, Deri11Htere
v.
JI. Panchaksharapp11
Sinha C. J.
1901
SiUll)Ogt1wara Cctlon
PrtJJ, D1t'(mgtr1
v.
At, PanchtJisharafJpa
Si•ha C. ]·
8s6
SUPREME COURT REPORTS
(1962)
that tho lease was heritable and assignable. Thus
there is no difficulty in holding that there is no
room for tho contention, on the terms of tlie leaeo,
that the parties intended that after the lapse of tho
first 20 years of the lease, tho tenancy will be
merely a tenancy at will.
It was clc:irly a tenancy
for an indefinite period, at tho least.
The contention on behalf of the appellant is
that on a proper construction of the lease deed,
read a8 a whole, the . inference is clear that the
partieg in tended it to be a permanrrnt lea.so.
The
first argument in support of the conclusion wo are
asked to arrive at is that it is clearly a lease for
uuilding purpOSPS ; and it is rightly pointed out
that where the land is Jct out for building purposes
without a fixed period, the presumption is that it
was intended to create a
permanent t-0naucy.
RcliancB
was placed upon the leading case in
Nm:alrmn v. Javerilal (')
where Sir Lawrence
Jenkin8, C. J., laid it down that a presumption in
favour of a permanent tenancy arises on a transaction like the one 110 have before us.
The terms of
the grrmt iu that ca8e are set out in foll at p. 402
and it is clear on a reference to those terms that
the de<'d was not as Rtrong as we h:wo in the instant case. Only two things were explicit in tho
te: ms of that d.;cument, namely, (I) that it was a
lease for building purposes and ( :!) that as long as
the lessee continued to pa.y the stipulated rnnt, the
l1•ssor would not be entitled to .call upon the lessee
to quit.
Helia.nee was also placed upon the decision
of the Calcutta High Court in Prom11r/(I Nath Roy v.
8rigobind Cl'KIU·dhry (2 ).
In that case the Kabuliat
did not specify an~· period during which tho lease
was to subsist.
It had been stipulated that the
land was to be held from ycnr to year at an nnnunl
rent and tha.t in the •went of a masonry building
being erected on the land, rent was to be nsstssed
at the prevailing rate.
Eventually, the tenant
(I) (19051 7 Born. L. R. 4-0L
(2) (1905) I. L. R· 32 C.l. 64~,
I • •
'Ill
•
..
-
>
...
3 S.C.R. SUPREME COURT REPORTS
887
built the structure on the land. It was held by the
Calcutta Hi"h Court that the parties contemplated
the lease to" be for building purposes and that
therefore the court could presume that the lease
was intended to be permanent. The terms of the
lease in that case also were not as telling as in the
case before us.
Similar was the case of F'orb"s v. Hanuman
Bhagat(') decided by a Divison Bench of the Patna
High Court which applied the decision of the
Calcutta High
Court in Promada Nath Roy v.
Srigobind Ohowdhry (') to the case before it. That
case was followed by a subsequent Division Bench
in the case of Commissioner of Income-tax v.
Maharajadhiraj Kumar Visheshwar Singh(').
Faz!
Ali, J., who delivered the leading judgment of the
court relied upon the decision of their Lordships of
the Judicial Committee of the Privy Council in the
case of Janaki Nath Roy v. Dina Nath Kundu (').
Mr. Justice Fazl Ali particularly relied upon two
circumstances which in his view supported the inference of the tenancy being permanent, namely,
(1) that no term had been fixed in the lease and (2)
that the lease deed contained provisions for the
exercise of certain rights by the heirs of the lessor
and the lessee, apart from the cirtumstance that
the building was for enabling the lessee to build a
gala (ware-house) and a platform for a rice mill. In
all these cases decided by the Bombay, Calcutta and
Patna High Courts as also
by the Judicial
Committee, there was no fixed period as the term
of the lease.
But it was contended on behalf of the plain tiff
respondmt th.at the term expressly granting the
lessee the right to give up possession at will was
wholly inconsistent with the permanency of the
tenancy. In our opinion, the presumption raised
by the fact that the lease was for building purposes
and th9refore intended to be permanent is not
weakened by the fact that the lessee had stipulated
(I) (1923: I. L. R. 2 Pat. 452.
(2) (1905) J. L. R. 32 Cal. 648.
(3) (1>39) LL. 11.. 18 Pat. sos.
(4) (1931) ss·c. w. N. 982.
1961
Sivayo1eswara-Coiion
Press, Drvangere
v.
M .. Panchaksha,raftP•
Sinha C. J.
SiNJ•ftSWdra Cation
Press, Dta.ntrre
v.
M. p..,O.bharopp•
Sinha C. J,
"
888
SUPREME COURT REPORTS
[1962)
with the lessor to be entitled to give up possession
if and when he decided to do RO.
It is a rigbt
reserved in favour of the lessee and did not confer,
as already pointed out, a.ny corresponding right on
the lessor. Such a right in favour of the lessee
cannot be convert-Od into a diRability or an obliga·
tion which should detract from the grant of a permanent tenancy.
Such a stipulation which gives a
right to the tenant to surrender the lease-hold at
any time he decided to do so, if it is coupled with
a. corresponding right in the landlord to serve notice
of ojectment at any time he chose to do 30 may
have the effect of making the tona.ncy, a tenancy at
will, but such a conclusion has been negatived by
tho High Court nnd rightly enough.
In thia connection the following observations
of the Privy Council in the case of Baboo Lekhraj
Roy i-. l\. nnhya Singh (') may be quoted :
"If a grant be made to a man for an
indefinite period, it enures, generally speaking
for his lifetime, and pa88cs no interest to his
heirs unless there are some words shewing an
int-Ontion to grant an hereditary interest. That
rule of construction docs not apply if the term
for which the grant is made is fixed or can be
definitely ascertained".
In that case, a lease had been granted to the re8·
pondents' ancestor to continue during the term of
the moknrruri of the grantor. The grantor's term
could be t~rminatcd by the owner (in this case the
Govnnment) at the end of a year, a power wliieh
had never been exercised.
In a suit for cjectmrnt
by the successor· in-title of the original lessee, it
was held by the Privy Council that th"l general rule
that a lease of an indefinite nature enures for the
life of the grantee did not apply to tho case,
hocauso tho interest of the lessor itself had paasiod
from generation to generation.
In this caao, it has been found by the High
Court that after the lnpso of the first 20 years of tile
(Ii (1877) L. R. 4 I.A. 223, 252.
J
li
• •
·-< -- .
-
'
-I
3 S.C.R;
SUPREME COURT REPORTS
889
lease, the lease became one for an indefinite term
which meant on the authority of the decision of the
Bombay High Court in Babasaheb v. West Patent Co.,
LUl.(1) to which one of us sitting in the Bombay
High Court (Gajendragadkar, J.) was a party, a
lease for the lifetime of the lessee.
The facts of
that case were similar to those of the present except
in so far as there do not appear in the lease any
such terms as are contained in cl. 14 of the lease
deed in the instant case.
The Bombay High Court
therefore had not to consider the terms of a lease
which could be said to be in pari materia with
those of the present.
In that case, the court had
to choose between two rival contentions, namely, (1)
that the lease created a tenancy at will and (2) that
the lease was a lease good enough for the lifetime
of the grantee, if it was not indeed a permanent
ternr.ncy.
We are in compbte agreement with the
following observations of the court made in that
case which in our opinion apply to the facts and
circumstances of the case in hand :
"The forms in which tenanoy rights are
created in India are not uniform and they do
not conform to precedents known to conveyancing ; sometimes the words used are not
precise and it is not easy to understand from
the said words the intention of the parties in
executing the documents. Leases arc often
executed without legal assistance; and the aid
that the parties obtain from professional
scribes does not always contribute to make
the terms clear or precise. The nature of the
tenancy created by any document must neverthelesil be determined by construing the document as a whole. If the tenancy is for a building purpose, prima facie it may be arguable
that it is intended for the life-time of the lessee
or may in certain cases be even a permanent
lease. Prima facie such a lease is not intended
to be tenancy at will.
But whether it
is a tenancy for
life
or a
permanent
(1) I. L. R. [1954] Bom. ~48, 450.
1961
Sivayogeswara Colton
Press, Devangere
v.
Af. Panchaksharappa
Sinhu. 0. J.
1961
SiNyotuwara C•t11n
PrtJJ, DtNnttrt
v.
JI. p..,NJ;,lur<H•
Sinlu C. J.
890
SUPREME COURT REPORTS
(l!l62)
tenancy must ultimately depend upon tho
terms of the contract itself. And in construing the terms of such contracts ·the C(J1Hts
must look at the substance of the matter and
decide what the
partie~ rt'all_v intende'd to
clo."
Our task therefore in the present case 1s to
determine what the parties rt1ally intended to do.
In this connection, it ia pertinent to re-cmphaaise
tl10 following facts : the lessee with a view to raise
a substantial structure by way of factory prcmil!tls,
residential quarters and other appurtenant buildings,
took a lease of extensive land, about 41 /2 acres in
aren. ; those Janda, at the time of the transaction
m quostioo, were being used for agrim1ltural
purposes with the permission of tho Government.
who wore the ultimate owners.
Its character
could
bo
changed
with
the permission of
the
Government
on
payment
of
certain
prescribed fees and charges.
The parties could
not be oortain of obtaining the nc!'essary Government B.'\nction to the conversion of the tenancy
from agricultural to building purposes. Therefore
the stipulation "as clearly made that in the event
of the Government refusing to sanction the conversion, the lease will be deemc·d to have como to
an cud. If the pennissiou were forthcoming, and
if the lessee put up substantial structures, it would
be in hi& interest to continue in posseasion of the
promises demised by tho lease as long as he found
it worth his while, but the lessee may have apprehended that circumstances might supervene necessitating his walking out of the vcnturo. He therefore had to make provision in tho lease entitling
him to surrender the lease so 118 to avoid the liabi·
lity for payment of future rents. But tho ICl!sor on
his part would be equally anxious to conserve his
right.e and therefore he insisted upon tho payment
of rent for at least 20 years, irre1pcctive of the
consideration whether or not the tenant continued
"
-
•
,.
3 S.C.R.
SUPREME COURT REPORTS
891
to oocupy the premises.
Thereafter, the lessor
stipulated for enhanced rent of Rs. 400/- per annum for the first ten years after the initial period
of twenty years aforesaid, and Rs. 500/- thereafter
for all times that the lessee continued to occupy
the premises. It could not therefore have been in
the contemplation of the parties that the lease
should be only for the life of the grantee or for an
indefinite period which could be terminated at the
will of the lessor.
In order to ensure that the
lessor should not eject the lessee at his sweet will,
the term was specifically included in the lease that
it will not be open to the lessor to do so. It must,
therefore, be held that a stipulation entitling the
lessee to surrender possession of the premises at his
will is not wholly inconsistent with the tenancy
being permanent. In this connection, the following
observations of the Judicial Committee of the Privy
Council in the oase of Janaki Nath Roy v. Dina Nath
Kundu (1) may bo quoted:
"On the other hand, restrictions upon
the power of the tenant to dig tanks and build
masonry structures (cl. 8) and other provisions
m the
document
were
relied
upon by
the Appellants as indicating a
tenancy not of a permanent nature.
That
some provisions are to be found which point
in that direction cannot be denied though
some of them may be explained by the existence of the special powers to
resume
Khas possession referred to above. But the
question after all, is one of construction qf a
document, viz., what is the correct v10w
to take of the rights of the parties after
considering all the clauses of the lcabuliyat
and giving due weight to the several indications which point in the different directions ?"
It is noteworthy that the lease was intended
by the parties to bo heritable and assignable.
It
11J
(193Il 35 c.w.N. 9s2, 986.
1911
Sivayogeswara Cottun
Press, -Devangere
v.
M. Panchaksharapjla
Sinha G.J.
1961
SifH4.>'ottsUJaTa C<nt~
PrtJs, Dtv.rittrt
v.
JI. p.,.,i..;,harappa
SinhoC.].
"'
802
SUtREME COURT REPORTS
[HJ62)
was a lea.so for twenty years certain, and then in
terms which are not wholly unequivocal in rcsprct
of the period after the In.pse of the initial twenty
years. That the lease was not intended to be for tho
life only of the grantee is clear not only from tho
facts <>!ready noticed, namely, that it was meant for
building purposes, was heritable and assignablo aud
had not re8Vrved any right to tho lessor to terminate the tenancy, but also from the consideration
that tho le88or would not gamble upon tho life of
his lessee when he was making sure of tho term of
at least twentv years. He must have known that
the factory worked for twenty years, it would go
on for ever, according to human calculations.
The fact that the lessee stipulated in express
t..Jrms that ho shall always be at full liberty to givo
up tho lease after October 1, 1934, it was argued,
was a clear indication of the leaso nut being a permanent one ; in other words, the contention is that
the presumption arising from the fact that tho kaHP
was for a building purpose, heritable and assignable,
is rebutted by the fact that tho tenant had insisted
upon the stipulation aforesaid.
In <><tr opinion,
there is no s11bstanco in this contention. It is alwayR open to a. lessee of whatever description to
surrender his leasehold interest to the lessor, by
mutual consent. It is not necessary in law that
the mutual consent should be at the time the surrender is being made. It is open to the parties to
stipulate terms in anticipation of such a surrender .
In the instant case, the surrender wa.s to be in
oxpre8B terms agreed to by the parties, at any time
n.fter the lapse of the initial period of _twenty yea.rs.
Such a stipulation for the benefit of the lessee
cannot be construed as in derogation of the permanency of the tenure, if tho parties otherwise
agr~ed to erooto such a. tenure.
For the reasons aforesaid, it must bi hold
that tho High Court \l'aS in error in holding that
the present case is governed by the decision of the
'
..
3 S.C.R.
SUPREME COURT REPORTS
893
Bombay High Court in I.L.R. [1954] Bom. 448. That
deci11ion was, with all respect, entirely correct on
the terms of the document then before the court.
That being so, in our opinion, on a true and proper
construction of the lease deed, the presumption in
favour of the transaction creating a permanent
lease cannot be held to have been rebutted by a
stipulation in favour of the tenant having the
right to surrender the lease at his choice.
That
being so, it must bo held that the lease deed evidences an intention to create a permanent lease.
In view of this finding, it is not necessary to advert
to thtl other· contentions raised on behalf of the
appellants.
For the reasons given above, the appeal must
be allowed; tho judgement and clocreo of the courts
below aro sot aside and the suit giving rise to the
appeal clismis~ed with costs throughout.
Appeal allowed.
THE BOMBAY UNION OF JOURNALISTS AND
OTHERS
v.
'rHE 'HINDU', BOMBAY, AND ANOTHER
(K. N. WANCHoo and J.C. SHAH, JJ.)
Industrial Di•pute-Individual Dispute-If and when can
be cont'erted into industrial diBpute-Industrial DisputM Act,
1947 (14 of 1947), •· 12 (6).
The first respondent, the 'Hindu', Bo1nbay, which vvas a
nc\vspaper establishment terminated the services of the third
appellant as its correspondent and declined to accede to the
request of the latter for his re-instatement. His case was taken
up and supported by the Bombay Union of Journalists, a trade
union, of which membership was open to all persons depending
on jou1nalism for their livelihood. He was not supported by
any union of the employees of the 'Hindu', Bombay, or a
number of its workmen. The Government referred the dispute
for adjudication under s. 12(5) of the Industrial Disputes Act,
1961
Siviyogesw~a Cotton
Press, Devangere
v.
kl. Panachakshara;pa
Sinha C. J.
1961
September 21.