Sivayogeswara Cotton Press, Devangere
& Ors Vs. M. Panchaksharappa & ANR  INSC 285 (27 September 1961)
SINHA, BHUVNESHWAR P.(CJ) GAJENDRAGADKAR,
CITATION: 1962 AIR 413 1962 SCR Supl. (3) 876
CITATOR INFO :
R 1966 SC 629 (9) R 1971 SC1878 (9,10,14)
Lease-Construction-Lessee taking lease of
agricultural land for building purposes-Terms, if create a permanent tenancy.
The material-terms of the lease in.
controversy provided that for the first 20 years the lessee was to pay a fixed
rent of Rs. 350/every year in advance and if if removed his factory within that
period be-would still have to pay the 'said rent for the twenty years retaining
his right to possession; that thereafter he would 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 10 years and thereafter of Rs. 500/per year, with the right'
to terminate the, lease at any time and the lessor would not have the right to
call upon him to give up possession at any time as long as if wanted to, keep
the land for his purposes observing the terms of the agreement; that the lessee
would be entitled to raise buildings godowns, factories, bunglows or any other structures
as he desired; that the lessor would pay the annual land assessment to the
Government and the lessee would pay any fines and taxes imposed by the
Government for using....agricultural land for building purposes; that the
lessee would be free to sublet or relet without affecting the terms and
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.
After more than twenty years had elapsed
since the lease, which was a registered one, had been executed between the
predecessors in-interest of the parties, the respondent who succeeded to the
original lessor's title, brought the suit, out of which the present appeal
arose, for ejectment of the assignee of the lessee's interest on the ground
that the lease created a tenancy at will and stood determined on service of
notice to quit.
The trial court and the 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 Bavasaheb v. West Patent Co, Ltd. I.L.R.  Bom 448, held that
after the lapse of the twenty years the lease was one for an indefinite period
and could enure only during the lifetime of the lessee and such 877 assignees
as bad 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 twenty 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.
Janaki Nath Boy v. Dina Nath Kundu, (1931) 35
C.W.N. 982 and Baboo Lekhraj Boy v. Kunhya Singh, (1877) L.R. 4 I.A. 233,
Babasaheb v. West Patent Co., Ltd., I.L.R.
1954 Bom. 448, distinguished, Navalram v. Javerilal, (1905) 7 Bom. L.R. 401,
Promada Nath Roy v. Srigobind Choudhry (1905) I.L.R. 32 Cal. 648, Forbes v.
Hanuman Bhagat, (1923) I.L.R. 2 Pat. 452 and Commissioner of Income-tax v.
Maharajadhiraj Kumar Visheshwar Singh, (1939) I.L.R. 18 Pat. 805, discussed.
Held, further, that it is always open to a
lessee of any description to surrender his lease-hold interest to the lessor by
mutual consent. It is not necessary in law that there should be such consent at
the time when the surrender is made.
Since in the instant case, the surrender
after the lapse of twenty )-cars 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 APPELLATE JURISDICTION: Civil Appeal
No. 324 of 61.
Appeal by-special leave from the judgment and
decree dated December 23, 1960, of the Mysore High Court in Second Appeal No.
61 of 1954.
C. K. Daphtary, Solicitor-General of India, J. B. Dadachanji, Ravinder Narain and O. C. Mathur, for the appellants.
R. Ganapathy Iyer and G. Gopalakrishnan, for
the Respondent No. 1.
878 1961. September 27. The Judgment of the
Court was delivered by SINHA, C. J.-This appeal by special leave granted by
this Court on April 20, 1961, is directed against the concurrent decisions of
the courts below decreeing the plaintiff's suit for ejectment on the ground
that the defendant is a tenant at will and negativing the appellants' claim to
a permanent tenancy. The controversy between the parties depends upon the true
construction of the lease dated October 26, 1914, executed between the
predecessors-in-interest of the parties to the present litigation.
The facts leading up to this appeal are as
follows:One N. J. Gamodia of Bombay took on lease a piece of agricultural land
measuring about 4-1/2 acres belonging to one Gurupadappa of Devangere City for
the purpose of erecting a Ginning and Pressing Cotton Factory. The terms of the
registered lease deed dated October 26, 1914, in so far as they are material
for the determination of this appeal are better stated in the relevant portions
of the deed itself:"1. For the 1st period of 20 (twenty) years commencing
from the 1st October, 1914, and ending on the 30th day of September, 1934, you
shall pay to me Rs. 350/(three hundred and fifty) rupees being the annual rent
reserved every year in advance and obtain proper receipts of the payment from
me. If before the expiration of the said period of 20 (twenty) years you will
remove your factory from the said land hereby leased you are bound to pay me
annually the rent of Rs. 350/(three hundred and fifty rupees) for the (torn) 20
(twenty) years but you are entitled to retain in possession of and, the road
till the 30th September, 1934.
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 the 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 land 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 the 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 1st
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
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, resrect 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
880 the land in any way or for any purpose as you may desire.
7. I hold myself liable, to pay always the
annual assessment of the land hereby leased to Government you shall not be
liable for such land assessment. But you shall be liable'to pay all fines and
other taxes which the Government will hereafter impose for having converted the
parable 'or cultivable land into land for factories and building purposes.
10. You shall be always entitled and have
full liberty to sublet or re-let the said land together with the said road for
any purpose to any other person or persons on any conditions you like but without
effecting in the least any of the conditions or terms of this lease.
11. ................... ...................
14. This lease is binding on me, my heirs,
executors, administrators, successors and assigns as well as on your heirs,
executors, administrators, successors and assigns. I have hereby by this
writing granted you this lease by ;my own free will and in my full senses and I
bind myself to abide by its terms and conditions mentioned above".
The said lessee, N. J. Gamodia died in 1916
leaving a will appointing executors to look after his affairs. The executors
assigned the lease to the second defendant, Gamodia Factories Limited by a deed
dated November27, 1933.
The assignee like the original tenant
continued to pay the stipulated rent'to the lessor Guru-padappa till his death
which 881 occurred in May, 1939. 'The second defendant in its turn assigned its
leasehold interest to the first defendant by a deed dated May 30, 1944. It is
common ground that the leasehold property contains factory, buildings and
residential quarters. After the lessor's death his two widows continued to
receive rent from the lessees as usual.
The plaintiff is the adopted 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 bad 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 the 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 porsession. In the trial court, a
number of issues were struck between the parties.
The most important issue upon which the
result of the litigation largely defended was the one relating to the nature of
the lease created by the lease deed aforesaid.
The trial 'court held that it was a lease for
20 years certain, ,and on the efflux of that period on October 26,_ 1934, the
second defendant became a 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 882 necessary notice,
which is found to have been properly served. In the result, the plaintiff's
suit was decreed with costs and the defendants were directed to quit the land
and the road annexed to the land. and to restore possession of the premises to
the. plaintiff after removing the iron and steel machinery and other
appurtenances of the factory, but leaving intact the residential quarters and
the appurtenances of those quarters. On appeal by the defendants, the lower
appellate court affirmed the finding of the trial court and dismissed the
appeal with this modification that the defendants were given six, months' time
to restore possession to the plaintiff after removing their machinery etc. The
lower appellate court made some other modifications also which are not material
to this appeal. On second appeal by the first defendant, the High Court
dismissed the appeal with costs, but modified. the findings of the two courts
below in so far as it held that after the lapse of the first 20 years of the
lease, 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 namely the second defendant, which is the
'company inasmuch as the original lessor in his lifetime had accepted the
assignment of the lease in favour of the 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
the plaintiff and therefore the first defendant did not become the plaintiff's
tenant. In that view of the matter, the judgment and decree of the courts below
were confirmed with the modification 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 of fitness for coming up in appeal to this court.. but the High
Court by its order dated March 29, 1961, 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 defendants interest as an assignee of the original
lessee 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 common 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 lease deed evidences a perpetual grant to the lessee on the terms and
conditions contained in the lease deed.
884 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/annua
rent in advance, even though the lessee may not continue to occupy the demised
land; that the lessee had been granted a right to continue the lease of the
demised premises as long as the lessee desired to do so ;
that on his choosing to continue to enjoy the
leasehold, the lessee was obliged to pay annually the enhanced rent of Rs.
400/for the next ten years after October 1,
1934, and after the expiration of the ten years aforesaid, the rent was further
enhanced to the sum of Rs. 500/per annum ;
that the lessee was given the option to give
up the lease at any time after October 1, 1934, without any further liability
for payment of the stipulated rent ; that (and this is a very important
stipulation) the lessor bound himself not to call upon the lessee at any time
to give up possession of the ease-hold as long as the lessee was prepared to
observe the terms of the lease, that the lessee was fully authorised "to
erect, as many buildings, godowns, factories, bungalows and other structures
etc.." as also to pull down and re-erect structures or to make any alterations,
as desired by him ; that the lessor undertook not to raise any objection to the
lessee making those structures or his using or enjoying the land in any way or
for any purposes according to his desire; that the lessor undertook to pay the
annual assessment to Government in respect of the demised premises but the
lessee was obliged to pay all fines and other taxes which Government might
impose for granting permission to convert the culturable land into land meant
for building factories and other structures as contemplated between the
parties, that if the lessee chose to give up possession of the demised
premises, he shall be entitled' to take away all machinery, iron and steel, wood
works 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 aforesaid 885 upon notice of demand served upon the lessee, the
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 provided that
if the Government refused Co 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 successors. 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 obligations 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 has occupied a large portion of the judgments of the
courts below, that reservation of the right to the lessee 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 any corers ponding benefit to the lessor. It is equally
clear 886 that the lease was heritable and assignable. Thus there is no
difficulty in holding that there if; no room for the contention, on the terms
of the lease, that the parties intended that after the lapse of the first 20
years of the lease, the tenancy will be merely a tenancy at will. It was
clearly a tenancy for an indefinite period, at the least.
The contention on behalf of the appellant is
that on a proper construction of the lease deed, read as a whole, the inference
is clear that the parties intended it to be, a permanent lease. The first
argument in support of the conclusion we are asked to arrive at is that it is
clearly a lease for building purposes ; and it is rightly pointed out that
where the land is let out for building purposes without a fixed period, the
presumption is that it was intended to create a permanent tenancy. Reliance, was
placed upon the leading case in Navalram v. Javerilal (1) where Sir Lawrence
Jenkins, C. J., laid it down that a presumption in favour of a permanent
tenancy arises on a transaction like the one we have before us. The terms of
the grant in that case are set out in 11 at p. 402 and it is clear on a
reference to those terms that the deed was not as strong as we have in the instant
case. Only two things were explicit in the terms of that document, namely, (1)
that it was a lease for building purposes and (2) that as long as the lessee
continued to pay the stipulated rent, the lessor would not be entitled to call
upon the lessee to quit.
Reliance was also placed upon the decision of
the Calcutta High Court in Promada Nath Roy v. Srigobind Chowdhry (2).
In that case the Kabuliat did not specify any
period during which the lease was to subsist. It had been stipulated that the
land was to beheld from year to year at an annual rent and that in the event of
a masonry building being erected on the land, rent was to be assessed at the
Eventually, the tenant (1) (1905) 7 Bom. L.
(2) (1905) I. L. R. 32 Cal, 648 887 built the
structure on the land. It was held by, the Calcutta High 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 an in the case'before us.
Similar was the case of Forbes v. Hanuman
,Bhagat (1) decide by a Divison Bench of the Patna High Court which applied the
decision of the Calcutta High Court in Promada Nath Roy v.
Srigobind Chowdhry (1) 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(3). Fazl
Ali, J.., who delivered the leading judgment of the court relied upon the
decision of their Lordships of the Judicial Committee of the Pi-ivy Council in
the case of Janaki Nath Roy v. Dina Nath Kundu (4). 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
circumstance that the building was for enabling the lessee to build a gola
(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
plaintiff respondent that 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 therefore intended to be permanent is not weakened by
the fact that the lessee had stipulated (1) (1923) I. L. R. 2 Pat. 452.
(2) (1905) I. L. R. 32 Cal. 648.
(3) (1939) I. L. R. 18 Pat. 805.
888 with the lessor to be entitled to give
up, possession if and when he decided to do so. It is a, right reserved in
favour of the lessee and did not confer, as already pointed out, any
corresponding right, on the lessor. Such a right in favour of the lessee cannot
be converted into a disability or an obligation 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 be decided to do,so, if it is
coupled with a corresponding right in the landlord to serve notice of ejectment
at any time he chose to do so may have the effect of making the tenancy, a tenancy
at will, but such a conclusion has been negatived by the High Court and rightly
In this connection the following
'Observations of the Privy Council in the case of Baboo Lekhraj Roy v. Kunhya
Singh (1) may be quoted:
"If a grant be made to a man for an
indefinite period, it enures, generally speaking for his lifetime, and passes
no interest to his heirs unless there are some words shewing an intention to
grant an hereditary interest.
That rule of construction does not apply if
the term for which the grant is made is fixed or can be definitely
In that case, a lease had been granted to the
respondents' ancestor to continue during the term of the mokurruri of the
grantor. The grantor's term could be terminated by the owner (in this case the
Government) at the end of a year, a power which had never been exercised. In a
suit for ejectment by the successor in-title of the original lessee, it was
held by the Privy Council that the general rule that a lease of an indefinite
nature enures for the life of the grantee did not apply to the case, because
the interest of the lessor itself had paused from generation to generation.
In this case, it has been found by the High
after the lapse of the first 20 years of the
(1) (1877) L. R. 4 I.A. 223,252.
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., Ltd.(,) 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 tenancy. We are in complete
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 tenancy 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 are 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 nevertheless 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.  Bom. 448, 4 50.
890 tenancy must ultimately depend upon the
terms of the contract itself. And in construing the terms of 'such contracts
the courts must look at the substance of the Matter And decide what the parties
really intended to do." Our task therefore in the present case is to
determine what the parties really intended to do. In this connection, it is
pertinent to' re-emphasise the following facts : the lessee with a view to
raises a substantial structure by way of factory premises, residential quarters
and other appurtenant buildings, took a lease of extensive land, about 4-1/2 acres
in area ; those lands, at the time of the transaction in question, were being
used for agricultural purposes with the permission of the Government who were
the ultimate owners. Its character could be changed with the permission of the
Government on payment of certain prescribed fees and charges. The parties could
not he certain of obtaining the necessary Government sanction to the conversion
of the tenancy from agricultural to building purposes. Therefore the
stipulation was clearly made that in the event of the Government refusing to
sanction the conversion, the lease will be deemed to have come to an end.
If the permission were forthcoming, and if
the lessee put up substantial structures, it would be in his interest to
continue in possession of the premises demised by the 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 venture. He therefore had
to make provision in the lease entitling him to surrender the lease so as to
avoid the liability for payment of future rents. But the lessor on his part
would be equally anxious to conserve his rights and therefore 'he 'insisted
upon the payment of rent for at least 20 years irrespective of the consideration
whether or not 'the tenant continued 891 to occupy the premises. Thereafter,
the lessor stipulated for enhanced rent of Rs.;. 400/per annum for the first
ton 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 case of Janaki Nath Roy v. Dina
Nath Kundu (1) may be quoted :
"On the other. hand, restrictions upon
the power of the tenant to dig tanks and build masonry structures (el. 8) and
other provisions in 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 of a
document, viz., what is the correct view to take of the rights of the parties
after considering all the clauses of the kabuliyat 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 be heritable and
assignable. It (1) (1931) 35 C.W.N. 982, 986.
892 was a lease for twenty years certain, and
then in terms which are not wholly unequivocal in respect of the period after
the lapse of the initial twenty years. That the lease was not intended to be
for the life only of the grantee is clear not only from the facts already
noticed, namely, that it was meant for building purposes, was heritable and
assignable and had not reserved any right to the lessor to terminate the
tenancy, but also from the consideration that the lessor would not gamble upon
the life of his lessee when he was making sure of the term of at least twenty
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 terms that he shall always be at full liberty to give up the lease
after October 1, 1934, it was argued, was a clear indication of the lease not
being a permanent one ; in other words, the contention is that the presumption
arising from the fact that the lease was for a building purpose, heritable and
assignable is rebutted by the fact that the tenant had insisted upon the
stipulation aforesaid. In oar opinion, there is no substance in this
contention. It is always 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 was to be in express terms agreed
to by the parties, at any time after the lapse of the initial period of twenty
years. Such a stipulation for the benefit of the lessee cannot be construed as
in derogation of the permanency of the tenure, if the parties otherwise agreed
to create such a tenure.
For the reasons aforesaid, it must be held
that the High Court was in error in holding that the present case is governed
by the decision of the 893 Bombay High Court in I.L.R.  Bom. 448. That
decision 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 be 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 the
other contentions raised on behalf of the appellants.
For the reasons given above, the appeal must
be allowed; the judgement and decree of the courts below are set aside and the
suit giving rise to the appeal dismissed with costs throughout.