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Report No. 70

Chapter 93

Rights and Liabilities

Section 108 and Proposed Section 108A

93.1. Introductory.-

The rights and liabilities of the lessor and lessee as against each other are dealt with in section 108. The opening paragraph provides that the section applies in the absence of a contract or local usage to the contrary. There is no express exception for local law-e.g., the local Rent Control Act-but it is obvious that a local law, if constitutionally competent, can modify the section.

93.1A. Section 108, Clause (a).-

Under clause (a), the lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware and which the latter could not with ordinary care discover.

As to this clause, we may observe that it does not cover defects in the title of the lessor, though there may be other covenants-e.g., the covenant for quite enjoyment-which may involve the lessor in difficulties if there are serious defects in his title.

93.2. Clause (b).-

Under clause (b), the lessor is bound on the lessee's request to put him in possession of the property. The obligation in clause (b) to put the lessee into possession at his request re-inforces the nature of the lease1-transfer of exclusive possession of the property.

1. See discussion as to section 105, supra.

93.3. Clause (c).-

Clause (c) provides that the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contract binding on the lessee, he may hold the property during the time limited by the lease without interruption. The benefit of such contract shall be annexed to and go with the lessee's interest as such, and may be enforced by every person in whom that interest is, for the whole or any part thereof from time to time vested.

93.4. Clause (c) how linked with clause (b).-

The covenant, under clause (b) would be an incomplete and bare one unless it was also provided that subsequently also the lessee shall have uninterrupted possession without interference. For, if a lessor, having put the lessee into possession under clause (b), subsequently disregards the lessee, right to continue in possession, then the performance of the initial covenant under clause (b) would be of no consequence, and would bring no substantial benefit to the lessee.

Section 108, therefore, in clause (c), provides, in effect, that assuming that the lessee performs his own obligations, the lessor shall see to it that throughout the period of the lease, the lessor shall not interrupt the possession nor shall be allow it to be interrupted by persons who can establish a title superior to the lessor or detract from the lessor's title. In this sense, clause (c) so operates that the initial covenant under clause (b) is made to speak at every moment of the lease. We are, of course, stating in broad terms the gist of clause (c); our principal object being to show the essential link between clause (b) and clause (c).

93.5. Suspension of rent for deprivation of possession.-

An important question with reference to clause (c) concerns the suspension of rent for deprivation of possession. Substantial interference, short of actual dispossession, by the landlord with quiet possession of the tenant entitles the tenant to claim suspension or abatement.1 Thus, if the landlord keeps logs of wood in one room of the house let out, to the great inconvenience of the tenant, the entire rent can be suspended until the mischief is removed.2

1. Ahmad Marocair v. Muthuvalliappa Chettiar, AIR 1961 Mad 28.

2. Jatindra v. Raimohan, AIR 1961 Assam 52.

93.5A. Applicability of English doctrine.-

The English doctrine of suspension of rent has, however, no application in India1 in its amplitude. There will be suspension of rent in cases where the landlord has, by his act, dispossessed the lessee or where the lessee has not, owing to his action, been able to take possession of a part of holding. If the tenant is evicted from2 a portion of the properly, the tenant is entitled to repudiate the lease; but if, instead of rescinding the lease, he elects to retain possession of the remaining portion, he cannot refuse to pay proportionate rent for that portion; he is bound to pay the rent for the portion retained, and is entitled to sue for damages in respect of the portion of which he has been deprived.3-4

1. Surendra Nath v. Stephen Court, 63 CWN 922.

2. Jayram v. Bishnu Charan, AIR 1925 Cal 805.

3. Meenakshi v. Chidambaram, (1912) 23 MI.4 119, followed in AIR 1928 Mad 380.

4. Ahmad Marcocair v. Muthuvalliappa Chettiar, AIR 1961 Mad 28 (30, 31), paras. 8-10.

93.6. Proportionate abatement.-

In other words, the tenant cannot claim total suspension of rent, but can claim only a portionate abatement of the rent in respect of the portion from which he has been evicted. It should be noted that this rule of proportionate abatement of rent applies not only where the rent is fixed at a certain rate per bigha, but also where the rent is fixed in a lump sum for the whole land leased, treated as an indivisible subject.1

In Ram Lal v. Dhirendra Nath, (1942) 47 CWN 489 (PC): AIR 1943 PC 24, it has been laid down that "as a matter of broad general principle, the law of India no longer proceeds upon the notion that where a contract is for an entire sum, there is a necessity of reason which prevents a party from recovering anything where his full obligations under a special contract is for an entire sum".

The divergence of judicial opinion in Indian was set at rest in Ram Lal's case, holding that in the case of a lease for a lump sum rent the English common law rule of suspension of the entire rent should not be applied, where the lessor has failed to give possession of only a part of the premises leased.2 This decision clearly establishes3 that where the lessor fails to put the lessee in possession of the whole of the demised premises; then, whether the premises were leased at a lump sum rent or at a rent at so much per acre or per bigha, there will not be a suspension of the entire rent, but the lessee will be entitled to a proportionate reduction or abatement of the rent.

1. Katvavani v. Udey Kumar, AIR 1925 PC 97; Dhirendra v. Bhabatarini, AIR 1929 Pat 356; Deoki Kaur v. Shiva Prasad, AIR 1939 Pat 395 (396).

2. Ram Lal v. Dhirendra Nath, AIR 1943 PC 24.

Also see Surendra Nath v. Stephen Court Ltd., AIR 1960 Cal 346: (1959) 63 CWN 922.

3. Mulla, (1973), p. 668.

93.7. Supreme Court case.-

This decision has been approved and followed by the Supreme Court in Bibra S.N. v. Stephen Court, (1966) 2 SCR 458 (460): (1967) 1 SCJ 12: AIR 1965 SC 1361, in the case of the tenancy of a dwelling house, Sikri, J. (as he then was), observed:

"On the one hand it does not seem equitable that when a tenant enjoys a substantial portion of the property of the landlord, leased to him, without much inconvenience, he should not pay any compensation for the use of the property, in other words, to borrow the language of Sir George Rankin, that he should enjoy a windfall. On the other hand, it is unfair that if a tenant is not given possession of a substantial portion of the property, he should be asked to pay any compensation for the use of the property while he is taking appropriate measures for the specific performance of the contract. It seems to us that it will depend on the circumstances of each case whether a tenant would be entitled to suspend the payment of the rent or whether he should be held liable to pay proportionate part of the rent."

93.8. Payment of rent-whether a condition precedent.-

In England, the payment of rent and the performance by the lessee of the contracts binding on him are not conditions precedent to the covenant for quiet enjoyment. This has been held in English cases1 relating to express covenant.

In a Madras decision,2 apparently following these English cases, it is stated that the effect of a different construction would be to give the lessor a right of re-entry in the case of every breach by the lessee.3 We are not, however, with respect, convinced that this is a corrupt approach. The English cases related to express covenants, and not to statutory conditions. Mandatory language in a statute cannot, we apprehend, be readily dispensed with.

1. Edge v. Boileau, (1885) 16 QBD 117; Dawson v. Doer, (1833) 5 B Ad 584.

2. Meenakshi v. Chidambaram, (1912) 11 Mad LJ 119.

3. Mulla, (1973), p. 694.

93.9. Repudiation by lessee-Recommendation as to clause (c).-

The section is silent on the question whether the lessee can repudiate the lease on the ground of-

(a) partial failure by the lessor to deliver possession, or

(b) eviction from a part of the premises.

Judicial decisions1-2 have recognised the existence of such a right.

We are of the view that the law should be made self-contained on this important matter. We, therefore, recommend that there should be inserted in clause (c), a suitable Explanation recognising such a right which is obviously required in the interests of justice.

1. Ahmed Marocair, AIR 1961 Mad 28 (30), para. 8, citing-Meenakshi v. Chidambaram, (1912) 23 MUJ 119.

2. Dhunpul Singh v. Mahomed Karim, ILR 24 Cal 296.

93.10. Recommendations as to suspension of rent.-

It may also be provided that in case of partial eviction there will be partial suspension of rent. We recommend accordingly.

93.10A. Explanation to be added to section 108(e).-

To carry out our recommendations on the two points discussed above,1 we suggest that the following Explanation should be inserted below clause (c) of section 108:

"Explanation.-Where the lessor fails to deliver to the lessee possession of a material part of the property, or where, by reason of a breach by the lessor of the provisions of this clause, the lessee is evicted from a material part of the property, the lessee at his option-

(a) may repudiate the lease; or

(b) shall be entitled to deduct from the rent such amount as bears to the total rent the same proportion as such part of the property bears to the entire property".

1. Paras. 93.9 and 93.10, supra.

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