# Bud Wit Satyanarayana and Others v. Konduru Venkatapayya and Other«~ - **Citation:** [1953] 1 S.C.R. 1009 - **Court:** Supreme Court of India - **Decided:** 1953 - **Case number:** Civil Appeal No. 154 of 1952 - **Bench:** Mehr Chand Mahajan, S. R. Das - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bud-wit-satyanarayana-and-others-v-konduru-venkatapayya-and-other-92 - **Pages:** 20 ## Headnote Lease-Condit.ion that the lessee's rights shall terminate if rent is not paid--Notice in writing by lessor to terrninate lease-Whether necessary-S!!it for ejectment withotlt notice-MaintainabilityTransfer of Property Act (IV of 1882 as amended in 1929), s. 111( g)-Whether based on justice, equity and good conscience-Appli. cability to lease deeds executed before 1st April, 1930. The provision as to notice in writing of the lessor's intention to determine the lease, containei1 in section l ll(g) of the Transfer of Property Act, 1882, as amended in 1929, is not based on any princjple of justice, equity or good con;cience and is not applicable to leases executed prior to 1st April, 1930. Where a lease deed executed before the Transfer of Property Act, 1882, came into force, provided that the lessee's rights should come to an end on default of payment of rent, and, as rent was not duly paid, the lessor instituted a suit for ejectment of the lessee without giving him a notice in writing of his (the lessor's) intention to determine the lease: Held, that the suit was maintainable, Umar Pulavar v. Dawood Rowther (A.LR. 194 7 :VIakE:M~E cobRT REPORTS · [1953] 19°3 In pursuance of the trial court's decree plaintiff took N nd-L k possession of all the suit lands in Apr!l, 1943, except a1eO oman . h . , Lodhi one acre whrnh e took possess10n on 13th September, v. 1943. Defendant No. 1 remained in possession of the Narmadabai two structures on survey No. 86/2. Against the cleciand Othus. sion of the trial judge defendant No. 1 alone filed an appeal to the District Judge of Poona. The lower Mahctjan J, appellate court confirmed the decree of the trial court with two modifications. Defendant No. 1 was allowed to remove the buildings on survey No. 86!2 and also the trees therein within three months. On the issue whether a notice was necessary, the appellate court found that the lease came to an end not under section 11 l(b) but under section 111 (g) of.the Transfer of Property Act, but that no notice of forfeiture was necessary as the lease had been executed prior to the coming into force of the Transfer of Property Act. The appellate court saw no valid reason for interfering with the finding of the•trial judge 011 the question concerning relief against forfeiture. From this appellate decree defendant No. 1 filed tL second appeal to the High Court of Judicature at Bombay. The plaintiff filed cross-objections in regard to tho trees and costs. The High Court dismissed the appeal and allowed the cross-objections. An application was made for leave to appeal to the Supreme Comt and it w11s granted with reference to survey No. 86/2. The law with regard to the determination of a lease by forfeiture is contained is section 111 (g) of the Transfer of Property Act. !Y't;nder that provision a lm1se is determined by forfeiture in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter, or in case the Jessee renounces his character as such by setting up tt title in a third person or by claiming title in himself, or the lessee is adjudicated an insolvent and the lease provides that the lessor may reenter on the happening of such event and a certain further act is done by the lessor as thereinafter mentioned. Prior to its amendment by Act XX of 1929, this sub-section further provided:- j S.C.R. SUPREME COURT REPORTS 1015 "And in any .of these cases the lessor or his transJ.963 feree does some act showing his intention to determine -- the lease." l\7amd~:a~;kman By Act XX of 1929, this sub-section was amended v. and the amended sub-section now reads:- Narmadabai A d ' f h h ] ] ' and Others. " n m any o t ese cases t e essor or us transferee gives notice in writing to the lessee of his intcnMahajan J. ti on to determine the lease." v' Section 111 (g) in terms makes the further act an integral condition of the forfeiture. In other words, without this act there is no completed forfeiture at till. Under the old section an overt ftct evidencing the requisite intention \yas essential. As the law stands today under the Act, notice in writing by the lftndlord is a condition ~cedent to ft forfeiture and the right of re-entry. Section 63 of Act XX of 1929, restricts the operation of this amendment to transfers of property nrnde ftfter 1st April, 1930. The lease in this case was executed before the Transfer of Property Act came into force in 1882. The amendment therefore made in this sub-section by Act XX of 1929 not being retrospective, cftnnot touch the present lease and it is also excluded from the reach of the Transfer of Property Act by the provisions of section 2. The position was not seriously di~puted in the High Court or before us that the statutory provisions of section · 11 l(g) as such cannot he made to govern the present lease which was executed in the year 1870. It was however strongly argued that the amendment made in 1929 to section lll(g) of the Act embodies ft principle of justice, equity and good conscience 11nd notwithstanding section 2 of the Act, that principle WftS applicable in this case and there can be no forfeiture unless notice in writing to the lessee of his intention to determine the lease by the lessor had been given . ./It is ftxiomfttic that l he eonrts must apply the principles of justice, equity and good conscience to transactions which come up before them for determination even though the statutory provisions of the Transfer of I 1016 SDPREME COURT REPORTS [1953] 19;3 Property Act are not made applicable t9 these transacN .J -L k tions. It follows therefore that the provisions of the anweo o man A h' ] b t t 't' f th 1 Lodhi ct w IC iare ut a sta u ory recogn1 rnn o e ru es v. of justice, equity and good conscience also govern Narmadaliai those transfers. ff, therefore, we are satisfied that and Othm. the particular principle to which the legislature has now given effect by the amendment to section lll(g) Mahajan J. did in fact represent a principle of justice, equity and good conscience, undoubtedly the case will have to be decided in accordance with the rule laid down in the section, although in express terms it has not been made applicable to leases executed prior to 1929 or even prior to the Transfer of Property Act coming into force. The main point :'or consideration thus is whether the particular provision introduced in sub-section (g) of section 111 of the Transfer of Property Act in 1929 is but a statutory recognition of a principle of justice, equity and good conscience, or whether it is merely a procedural and technical rule introduced in the section by the legislature and is not based on any well established principles of equity. The High Court held, and we think rightly, that this provision in sub-section (g) of section 111 in regard to notice was not based upon any principle of justice, equity and good conscience. In the first instance it may be observed that it is erroneous to suppose \hat every provision in the Transfer of Property Act and every amendment effected is necessarily based on principles of justice, equity and good conscience. It has to be seen in every case whether the particular provisions of the Act relied upon restates a known rule of equity or whether it is merely a new rule laid down by the legislature without reference to any rule of equity and what is the true nature and character of the rule. Now, so far as section lll(g) of the Act is concerned, the insistance therein that the notice should be given in writing is intrinsic evidence of the fact that the formality is merely statutory and it cannot trace its origin to any rule of equity. Equity does not concern itself with mere forms or modes of procedure. If the purpose of the rule as to notice is to indicate the intention of the lessor to ' ' • S.C.R. SUPREME COURT REPORTS 1017 determine the lease and to avail himself of the tenant's 1953 breach of covehant it could as effectively be achieved - b 1 . t' t' b 'tt . h t . Namdeo Lokman y an ora m 1ma 10n as ya wr1 en one wit ou m L dh' any way disturbing the mind of a chancery judge. :. ' The requirement as to written notice provided in the Narmadabai section therefore cannot be said to be based on any and Others. general rule of equity. That it is not so is apparent from the circumstance that the requirement of a notice Mahajan J. in writing to complete a forfeiture has been dispensed with by the legislature in respect to leases executed before 1st April, 1930. Those leases are still governed by the unamended sub-section (g) of section 111. All that was required by that sub-section was that the lessor was to show his intention to determine the lease by some act indicating that intention. The principles of justice, equity and good conscience are not such a variable commodity, that they change and stand altered on a particular date on the mandate of the legislature and that to leases macle between 1882 and 1930 the principle of equity applicable is the one contained in sub-section (g) as it stood before 1929, and to leases executed after 1st April, 1930, the principle of equity is the one stated in the sub-section as it now stands. Question may also be posed, whether according to English law a notice is a necessary requisite to complete a forfeiture. ~ The English law on the subject is stated in Foa's General Law of Landlord and Tenant (7th edition) at page 316 in these terms :- "In no case can the lessee take advantage of the proviso for re-entry in order to avoid the lease, even where it is in the form (not that the lessor may reenter, but) that the term shall cease, or that the lease shall be void for all purposes, or 'absolutely forfeited'; for expressions of this kind only mean that the tenancy shall determine at the option of the lessor ......... This has been usually expressed by saying that the lease is voidable and not void ; but the true principle appears to be that the lease does become void to all intents and purposes, though this is subject to the condition that the party who is seeking to set up its invalidity J.)2 • 1018 SUPREME COURT REPORTS [1953] 1953 is not himself in default, for otherwise he would be N d--L , taking advantage of his own wrong. ·rt follows that an1 eo Oll'?nan • . Lodhi where the proviso makes the lease v01d, the landlord v, must, in order to take advantage of it, do some unNannadabai equivocal act notified to the lessee, indicating his intenand Others. tion to avail himself of the option given to him. The service upon the lessee in possession of a writ in ei'ectMahajan J. ment is sufficient''. The Law of Property Act, 1925, by section 146 has consolidated the law in Engln,nd on this subject. The provision with regard to the giving of notice before a right of re-entry accrues to the landlord is expressly excluded by sub-section (11) in cases of re-entry on forfeiture for non-payment of rent. In England it is not necessary in case of non-payment of rent for a landlord to give notice before a forfeiture results. It cannot, therefore, be said that what has been enacted in sub-section (g) of section 111 is a matter which even today in English law is considered as a matter of justice, equity and good conscience. In English law the bringing of an action which corresponds to the institution of a suit in India is itself an act which is definitely regarded as evidencing an intention on the part of the lessor to determine a lease with regard to which there has been a breach of covenant entitling the lessor to re-enter : vide Toleman v. Portbury (1 ), and Prakashchandra Das v. Rajendranath Basu('). In India there is a substantial body of judicial authority for the prnposition that in respect of leases made before the Transfer of Property Act forfeiture is incurred when there is a disclaimer of title or there is non-payment of rent. Any subsequent act of the landlord electing to take advantage of a forfeiture is not a condition precedent to the right of action for ejectment. The bringing by a landlord of a suit for ejectrnent is simply a mode of manifesting his election. The principle of these cases rests upon the ground that the forfeiture lli complete when the breach of the condition or the denial of title occurs. But as it is left to the lessor's optwn to take advantage of it or not, the (1) L.R. 6 q.B. 245. • S.C.R. SUPREME COURT REPORTS lOHI election is not a condition precedent to the right of 1953 action and the' i1rntitution of the action is a sufficient -- ·c t t" f th J t" TJ • · l · Nmndco Lokmun ma1111es a 1011 o e e ec 1011. le same prmmp e 1s L di . a pp lied for actions for relief on the grnund of fraud. ~"" [vide Padmanabhaya v. Ranga(1); Korapalu v. NaraNarmndabai yana(')]. In Rama Aiyangar v. Gurusami Chetty('), and Others. it was said that as the lease was not governed by the Transfer of Property Act, the institution of the suit JtahaJan .r. was a sufficient determination of the lease and no other previous act determining the same such as a notice to quit was necessary for maintaining the action. The same view was expressed in V enkatachari v. Rangasami Aiyar('). In Venkatarama Aiyar v. Ponnuswami Padayachi("), it was observed that the forfeiture will not be produced merely by the unilateral act of ceasing to comply with the conditions upon which the property is held, but it must involve also some expression of intention to enforce the forfeiture on the part of the lessor. In other words, the lessee cannot by his unilateral act terminate the lease and cannot take advantage of his own wrong. That is an intelligible principle and is based on a maxim of equity. But the defaulting lessee cannot claim the benefit of a notice in writing to complete the forfeiture he has incurred. The lessor has to simply express an intention that he is going to avail of the forfeiture and that can be done by the filing of a suit, as in English law, in all cases not governed by the Transfer of Property Act. Again in Ramakrishiw M~allaya v. Baburaya ("), it was said that in an ejectment suit based on leases executed prior to the Transfer of Property Act, no act on the part of the landlord showing that ho elected to take advantage of the forfeiture for non-payment of rent was necessary. The contrary view expressed in Nourang Singh v. Jancirda.n Kishor('), that the institution of a suit for cjectment could not be regard- • ed as a requisite act to show the intention of a (1) (1911) l,L.R. 34 'lad. r6r. (21 (1915) l.L.H. 38 'lad. 445, (3) (1918) 35 M.L.J. 129. (4) (1919) 361\l.L.J. 532. (5) A.LR. 1935 i\lad. 918. (6) (1914) 24 I.C. 139. (7) (1918) l.L.R. 45 Cal. 469. • 1020 SUPREME COURT REPORTS [1953] 1953 landlord to determine a lease within the meaning ef secN de--;, k tion 111 (g}, was dissented from in Prakashchandra am ;,.dh; man Das v. Rajendranath Basu(1); and it was said that v. there is no special reason why the lessor's election Narmadaba.i must be made at some time prior to the institution and Others. of a suit and that it was difficult to find a raison d'etre for the view that the cause of action has not comMahajan J. pletely accrued if the election is made at the moment when the suit is instituted, i.e., the moment the plaint is presented. The cause of action for the suit can arise simultaneously with the presentation of a plaint. In our opinion the provision as to notice in writing as a preliminary to a suit for ejectment based on forfeiture of a lease is not based on any principle of justice, equity or good conscience and cannot govern leases made prior to the coming into force of the Transfer of Property Act, 1882, or to leases executed prior to 1st April, 1930. The rights and obligations under those leases have to be determined according to the rules oflaw prevailing at the time and the only rule applicable seems to be that a tenant cannot by his unilateral act and by his own wrong determine the lease unless the lessor gives an indication by some unequivocal expression of intention on his part of taking advantage of the breach. On no principle of equity is a tenant entitled to a notice in writing telling him that the lease has been determined. The High Court was therefore right in the view that it took of the matter and there are no valid reasons for taking a contrary view. Considerable reliance was placed by Mr. Daphtary on the decision of Chandrasekhara Aiyar J. sitting singly in the case of Uniar Pulavar v. Dawood Rowther( 2}, wherein the learned Judge said that section 111 (g) as amended in 1929 em bodied a principle of justice, equity and good conscience and must be • held to govern even agricultural leases and where there was a forfeiture by denial of the landlord's title, a notice in writing determining the lease was necessary. It was there observed that the principle so embodied (1) (1931) l.L.R. ;S Cal. 1359, (z) A.LR. 1947 ~lad. 68. • . . 8.C.R. SUPREME COURT REPORTS 1021 in the sub-section as a result of the amendment 19SJ becomes, so to say, a principle of justice, equity and - d · Th l d J d i: h' . Namdeo Lokman goo conscience. e earne u ge 1or t 1s vww L di . placed reliance on the decision in Krishna Shetti v. 0v." Gilbert Pinto('), in which it was said that the Transfer Narwulabai of Property Act was framed by eminent English lawand Others. yers to reproduce the rules of English law, in so far as they are of general application and rest on principle as Mahajan J, well as authority and its provisions are binding on us as rules of justice, equity and good conscience. vVith respect, we are constrained to observe that this is too broad a statement to make. It seems that the attention of the learned judges was not drawn to the fact that the provision as to notice for determining a lease for non-payment of rent was not a part of the English law. It also does not seem to have been fully appreciated that the rule enunciated in sub-section (g) of section 111 prior to its amendment in 1929 and which still governs leases executed before 1st April, 1930, on the reasoning of the decision would also be a rule of justice, equity and good conscience and according to it the institution of a suit for ejectment would be sufficient indication on the part of the landlord for determination of the lease and a notice in writing as required by the amended section would not be a prerequisite for institution of such a suit. In our judgment, this case was wrongly decided and we are unable to support it. As pointed out by Napier J. in Krishna Shetti v. Gilbert Pinto (1), the courts should be very careful in applying statutory provisions and the assistance of the Transfer of Property Act as a guide on matters which have been excluded from the purview of the Act by express words should not be invoked, unless the provisions of the Act embody principles of general application. Mr. Daphtary also placed reliance on certain observations contained in the ]foll Bench decision Brahinayya v. Sundarainina (2 ). There it was said that although section 106 of the Transfer of Property Act does not (r) (I9I9) l.L.R. 42 ~lad. 654. (2) A.I.R. r948 lllad. 275. • io22 ' ' ,. .,- SUPl'tEME COURT REPORTS [1953] 1953 apply to leases for agricultural purp