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Report No. 70

93.21. No change.-

Although the cryptic form of the present clause does not readily disclose this position, it is clear that the obligation of the lessor must arise by express or implied contract. Judicial decisions1 mostly relate to express contract, implied contract need not be ruled out.

1. Para. 93.17, supra.

93.21A. Clause (f)-Recommendation to override covenant against deduction.-

The tenant is entitled to deduct from the rent the expenses of necessary repairs done by him, even though there is a covenant in the lease to pay rent without deduction.1 Where the landlord fails to carry out the repairs which the Rent Act requires him to do, the tenant is not entitled to suspension or abatement of rent.2 Both these points may be provided for in clause (f), to make it comprehensive, and we recommend that the clause should be suitably amended for the purpose.

1. Graham v. Colonial Government, 12 04 351: 61 C 131.

See in this connection Abdul Sahid v. China Lee Hing, AIR 1951 Ass 62, and Augustina v. Chandi, AIR 1953 Tray-Co 462.

2. N.M. Industries Ltd. v. Virendra Nath, AIR 1957 Cal 232 (233), para. 4-5. (He can sue for damages).

93.21B. Statutory obligation to repair.-

Upon a breach of a covenant to repair by the lessor, the lessee's remedy is only deduction from rent, or damages or re-imbursement of money spent in repairs. There is no question of specific performance1 of the covenant. Further, where the Rent Act imposes a duty on the landlord to repair, the tenant cannot invoke the remedy provided by section 108(f), Transfer of Property Act.2

1. Bansi v. Krishna, AIR 1951 Pat 508.

2. Behari v. Kunjar Lal, AIR 1963 All 439.

93.22. Clause (g).-

Under clause (g), if the lessor neglects to make any payment which he is bound to make and which, if not made by him, is recoverable from the lessee or against the property, the lessee may make the said payment himself and deduct it with interest from the rent, or otherwise recover it from the lessor.

For example, a putnidar making a certain revenue payments due by his defaulting superior landlord is entitled to recover the same from the latter, even though a separate account had been opened for such payments.1 Where the lessee pays the land revenue payable by the lessor, the lessee can recover it from the lessor.2 In a suit for rent the tenant can ask for the deduction of water-tax and property tax paid by him.3

1. Smith v. Dinanath, ILR 12 Cal 213.

2. Faiyazunnissa v. Bajrang, AIR 1927 Oudh 609.

3. Acharya, T.K.S. v. Satyamma S., (1966) 1 An LT 11.

93.23. Recommendation as to clause (g).-

While no change in principle is required in the clause, it sounds reasonable to provide for notice to the lessor on the lines of clause (f) and we recommend accordingly.

Under the English law, a lessee who, under actual or implied compulsion, has paid any revenue or tax which the landlord is liable to pay, may deduct the amount from the amount from his rent, unless there is an express contract to the contrary. This is the principle which is found enacted in clause (g). Clause (g) is, however, in some respects, wider than the English law-(i) It is not limited to the payment of rates and taxes, (ii) further, unlike the English law, it is not necessary that the deduction should be made only from the rent of the current year and not afterwards.

93.24. Clause (h).-

Under clause (h), the lessee may, even after the determination of the lease, remove, at any time whilst he is in possession of the property leased, but not afterwards, all things which he has attached to the earth; provided he leaves the property in the state in which he received it.

The clause was amended in 1929. The old clause (h) read thus: "The lessee may remove at any time during the continuance of the lease, all things etc." That is, the old clause allowed the tenant to remove only "during the continuance of the lease," all things which he might have attached to the land, and nothing was said as to the rights of the parties in respect of such things after the determination of the lease, if they had not already been removed by the tenant.

On the old clause, the question arose whether the tenant forfeited all his rights in such things if he had not so removed them and it was held that according to local usage, the option was with the lessor either to take the building on paying compensation, or, if he was unwilling to pay compensation, to allow the tenant to remove the building.1

Where the terms of the lease did not provide for payment of compensation to the tenant, the Court had a discretion, in a proper case, to allow reasonable time to the tenant after the expiry of the tenancy to remove his superstructure from the land.2

While the broad features of the clause do not require amendment, it is necessary to point out that there are certain special circumstances in which the present restriction to the effect that removal of the fixtures can be done only while the tenant is in possession may cause hardship. For example, sometimes the tenant is not able to retain possession for removing the fixtures, because the premises have been compulsorily acquired by the Government, such acquisition leading to termination of the lease. In such circumstances, the law should, in our opinion, allow even after delivery of possession, a reasonable time within which the tenant may remove the fixtures erected by him.

1. (a) Ismail Mani v. Nazarali, ILR 27 Mad 211 (217);

(b)Angammal v. Aslami Sahib, ILR 38 Mad 710 (735);

(c) Kanai Lal v. Rassik Lal, 19 CWN 316.

93.24A. Recommendation as to clause (h).-

In the light of what is stated above, we recommend that a proviso should be added to clause (h) to the effect that1 where the lessee has not been able to remove the fixtures before delivery of possession by reason of circumstances beyond his control, he shall be entitled to remove them within a reasonable time after termination of the lease and delivery.

In this connection we may note that the point had been raised when the Bill of 1927 was under consideration. The following is from a contemporary comment2:-

"Clause (55) of the Bill deals with the right of tenant to remove all things which he has attached to the earth. The Indian Law has in this instance differed considerably from the English Common Law Quicquid Plantatur Solo Cedit has had from the beginning only a limited application in India. The rules of Hindu and Mohammedan Law on the point are more liberal to the tenants and other persons who have made improvements etc. on the lands of others.

The Transfer of Property Act, section 108, clause (h), has simplified the rules and abolished the distinctions of the English Law as regards what are fixtures and what are not and the differences in rights according to the tenancy was for trade purposes or agricultural purposes and so forth. The new clause proposes to permit the tenant to remove the fixtures so long as he is in possession and not afterwards even after the determination of the lease.

It does not seem to be a satisfactory solution to confine the rights of the tenant only to the period of his actual possession. Even under the existing law as settled by the decision of the Privy Council in Narayan Das Khettry v. Jatindra Nath Roy Chowdhury, 1927 LR 54 IA 218: ILR 54 Cal 669: 53 MLJ 158 (PC), the tenant will be entitled to a reasonable time for such removal even after the termination of the lease.

The proposed alteration would in some cases operate to deprive the tenant of his undoubted right to remove the fixtures even during the continuance of the lease as for instances where during the terms of the lease the lands are acquired by the Government under the Land Acquisition Act and possession is taken by the authorities in pursuance of the statutory notification. We would therefore suggest that the new section should run as follows:

The lessee may remove, at any time during the continuance of the lease, and until the lapse of a reasonable time even after the determination of the lease, all things which he has attached to the earth provided he leaves the property in the state in which he received it."

1. This is not a draft.

2. S.P. Shastri The Transfer of Property Amendment Bill, 1928 MLJ (Journal) 143 (145).

93.25. Clause (i).-

So much as regards clause (h). Clause (i) provides that when a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and agrees together and carry them.

The clause needs no comments.

93.26. Clause (j).-

Clause (j) provides that the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities to the lease.

Nothing in this clause shall be deemed to authorise a tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lease of an estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee.

Despite the permission contained in this clause as to the alienability of lessee, it is open to the parties to covenant against such alienation and a sub-lease given an contravention of such covenant is invalid as between the original lessor and lessee, though it is valid as between the original lessee1 and the sub-lessees and the landlord will be entitled to bring a suit for damages.2 A covenant not to sublet premises is, however-not broken by the subletting of part only of the premises.3

A permission granted by the tenant to others to use the premises does not amount to sub-letting.4

There is to be found in a Calcutta judgment5 a useful summary of the effect of subletting. In the case of a lease containing a covenant against sub-letting without the landlord's consent:

(1) There can be at law a sublease without the previous consent of the lessor. The sub-lease is not ab initio invalid, but it is liable to be affected by the forfeiture of the head lease.

(2) Upon the sub-lessee taking possession on the expectation of the head lessor recognising the sub-tenancy, the lessee becomes responsible to the sub-lessee on a covenant for quiet enjoyment.

(3) On the other hand, the transaction is to be regarded as an agreement to grant a lease with the landlord's prior written consent and the lessee may protect himself against possible claims of damages by making the contract subject to the landlord's consent.

(4) Where the lessee does not apply for the landlord's consent at the time fixed or after a reasonable time (fixing the same by due notice), the sub-lessee repudiates before that time, the lessee is entitled to relief. An absolute demise by sub-lease for the unexpired residue of the term operates not as an assignment of the term, but only as a sub-lease, and is not a breach of the covenant against assignment.

1. Abdulla v. Mohammed, ILR 26 Mad 156.

2. Sital Prasad v. Dildar Ali, 1 PLJ 1: 33 IC 408.

3. Medaile v. Lewis, (1956) 2 All ER 357.

4. Petroleum Workers Union v. A. Mohamed & Co., AIR 1967 Mad 33.

5. Battersby v. De Cruze, 1936 ILR 63 Cal 31 (45, 46) (Ameer Ali, J.) (See Heacinote in the ILR).

93.27. Clause (k).-

This disposes of cause (j). Under clause (k), the lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest which the lessee is about to take, of which the lessee is, and the lessor is not aware, and which materially increases the value of such interest.

We have no comments on this clause.

93.28. Clause (m).-

Under clause (m), the lessee is bound to keep, and on the termination of the lease, to restore, the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition, and, when defect has been caused by any act or default on the part of the lessee, his servants or agents, he is bound to make it good within three months after such notice has been given or left.

In East India Distilleries v. P.F. Mathies,, AIR 1938 Mad 1140; see also AIR 1970 Mad 291, the defendants company took a lease of a building from the plaintiff for the purpose of storing alcohol and other spirits for the purpose of their distilling business. The lease contained a covenant that the "lessees on the expiry of the period of this lease should restore the building at their own cost to the condition to in which they took the same on lease from V, the predecessor-in-title of the lessor.

That in case the lessees fail to remove the additions and alterations made by them to suit their purposes and at their costs and fail to restore the building to the original and habitable condition the cost thereof shall be paid by the lessees to the lessor". The defendants, to the knowledge of their plaintiff, made internal structural alterations in the building to suit their own purposes for use as a liquor warehouse. The building was subsequently burnt down, and the plaintiff sued the defendants for damages and for reinstatement of the building. It was held, that the plaintiff was not entitled to recover, because he did not bring home negligence to the defendant company.

It was pointed out that in India, section 108 of the Transfer of Property Act clearly contemplates that a lessee should not be responsible for the consequences of fire unless he has definitely taken that burden upon his shoulders by his covenant. The covenant in the lease in question did not contemplate the case of fire at all. It merely provided for the obligation that the lessee would incur to restore premises which he had altered to their original use as a dwelling house at the termination of the lease.

The principle of Rylands v. Fletcher, 1868 LR 3 HL 330 was not applicable to the case, because-(1) there was no evidence that power alcohol was a dangerous thing which a man could reasonably be held to store at his peril owing to its dangerous nature, and (2) the lessor knew from the beginning for what purposes the lessees required the building and to what the they proposed to put it.

93.29. Recommendation as to clause (m).-

This case, and many other cases1-3 show that again and again, questions as to the liability of the lessee for fire are raised. The controversy arises primarily because the cryptic expression "irresistible force" is used in clause (m), instead of the more elaborate and explicit phraseology used in clause (e). We recommend that clause (m) should be amplified on the lines of clause (e) to improve the position from the point of view of drafting.

The following re-draft of clause (m) is accordingly recommended:-

"(m) The lessee is bound to keep, and on the termination of the lease to restore, the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or by fire, tempest or flood or violence of an army or of a mob or other irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition; and when such defect has been caused by any act or default on the part of the lessee, his servants or agents, he is bound to make it good within three months after such notice has been given or left."

1. Doraipandi Konar v. Sundara Pathar, AIR 1970 Mad 291.

2. AIR 941 All 37.

3. Gurupada v. Sri Haripada, AIR 1962 Cal 263 (265), para. 6.

93.30. Clause (n).-

Clause (n) provides that if the lessee becomes aware of any proceeding to recover the property or any part thereof, or of any encroachment made upon, or any interference with, the lessor's rights concerning such property, he is bound to give, with reasonable diligence, notice thereof to the lessor.

The clause needs no change.

93.31. Clause (o).-

Under clause (o), the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell or sell timber, pull down or damage buildings belonging to the lessor, or work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto.

The clause needs no change.

93.32. Clause (q).-

Under clause (q), on the determination of the lease, the lessee is bound to put the lessor into possession of the property. Of course, if the lessor is not prepared to accept possession, the obligation of the lessee is adequately discharged by offering possession, because the law does not expect the impossible.

The clause needs no change.

93.33. Section 108A (New).-

As recommended1 by us under section 12, a new section should be inserted as follows, after section 108:

"108A. The breach of any such condition as is referred to in the Explanation to section 12, renders the assignment or subletting voidable at the instance of the lessor, whether or not the lessor reserves a power to re-enter on such breach."

This recommendation is subject to reservation by Shri Dhavan.2

1. See discussion of section 12, supra.

2. Reservation by Shir Dhavan as to section 108A.



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