Report No. 70

Chapter 97

Waiver of Forfeiture

Section 112

97.1. Introductory.-

The Act has two sections dealing with waiver relevant to action resulting in termination of a lease. These sections are based on the principle that action resulting in such termination essentially depends on the will of the party who took such action and can therefore be withdrawn. Section 112 deals with waiver of forfeiture. It reads-

"112. A forfeiture under section 111, clause (g) is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting:

Provided that the lessor is aware that the forfeiture has been incurred:

Provided also that, where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver."

97.2. Section 112, first proviso-Recommendation.-

Criticising the language of the first paragraph of section 112, Mulla1 has pointed out that the first proviso to section 112 makes it clear that the word "forfeiture" as used in section 112 does not mean the same thing as "forfeiture" as defined in section 111(g). He states that under section 111(g), two things are necessary for forfeiture, namely, (i) the happening of any of the three specified events, and (ii) the giving of notice by the lessor. There is no forfeiture under section 111(g) until there is a notice given by the lessor.

Now, if the landlord has already given a notice after knowing of the breach, the first proviso to section 112, which requires that the lessor must be "aware that the forfeiture has been incurred" is, according to Mulla, meaningless, because there cannot be forfeiture under section 111(g) without the knowledge of the lessor.

Mulla further states2 that it will be more accurate to say that in the case dealt with in section 112, there is a waiver of the breach, disclaimer or the insolvency, rather than to state that there is a waiver of forfeiture. He also adds that in the leading English case,3 Baron Bramwell observed that the expression "waiver of forfeiture" is not strictly accurate. We agree with the criticism made by Mulla for the reasons given by him. Even though the point is of a verbal nature, we are of the view that in order to preserve the symmetry of legislative language, it is desirable that section 112 should be cured of this defect by a suitable re-dra ft.4

1. Mulla, (1973), p. 756.

2. Mulla, (1973), p. 756.

3. Croft v. Lumley, (1858) 6 House of Lords Cases 672 (705).

4. See revised draft in para. 97.4, infra.

97.3. Section 112-second proviso.-

The first provision to section 112 raises no further problems. Under the second proviso to section 112, where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver. Mulla has explained1 that this proviso results from the principle that an election once made in favour of forfeiture is irrevocable.

The lessor when he has knowledge of the breach may take time to make his election, but once he has made the election either by express words or by an unequivocal act, the election is irrevocable. By giving notice and filing a suit on the ground of forfeiture the lessor has determined the lease and no subsequent act of the lessor may amount to a waiver. This proviso needs no change of substance.

1. Mulla, (1973), p, 759.

97.4. Revised section 112.-

In the light of what we have said earlier,1 our recommendation is to revise section 112 as under:-

"112. (1) Where the lessor becomes entitled under section 111(g) to terminate the lease by forfeiture on the ground of a breach or renunciation of character by the lessee or adjudication of the lessee of an insolvent, and the lessor is aware that such breach renunciation or adjudication has taken place, the right of the less or so to terminate the lessee is waived-

(a) by acceptance by the lessor of rent which has become due since such breach, renunciation or adjudication; or

(b) by distress by the lessor for such rent; or

[Section 112, Main paragraph in part re-modelled]

(c) by any other act on the part of the lessor showing an intention to treat the lease as subsisting.

[Section 112, first proviso],
(Section 112, Main paragraph in part]

(2) Where the lessor has already terminated the lease by forfeiture on such ground, the forfeiture is waived by the acceptance of rent, distress or other act mentioned in sub-section (1) after such termination and the lessee shall hold the property leased as if the forfeiture had not occurred.2

[Section 112, 2nd proviso]

(3) Notwithstanding anything contained in sub-sections (1) and (2), where rent is accepted by the lessor after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver for the purposes of those sub-sections".

1. Para. 97.2, supra.

2. Cf. section 114.