Decided on December 05,1944

Kadamban Nambudiripad And Ors. Appellant
The English And Scottish Joint Co -Operative Wholesale Society (Incorporated In England) By Its General Manager Mr. Francis Hamilton Farmer And Ors. Respondents


King, J. - (1.) THE subject -matter of these appeals is the right which has been claimed by the English and Scottish Joint Co -operative Wholesale Society, Ltd., to the renewal of a lease of land granted to their predecessor in title in the year 1891 for 48 years. In O.S. No. 38 of 1942, the Society filed a suit for specific performance of a covenant in that lease to renew it. In O.S. No. 72 of 1942 there was a suit by some of the lessors to eject the Society. The learned Subordinate Judge of Coimbatore has decreed the suit of the company, though not in full. He has held that the company had the right to renew the lease but that the lease could -not be renewed upon the original terms. He has therefore fixed other terms which shall be current for the renewed period of 48 years. As a consequence of this the suit by the lessors to eject the company has been dismissed. It is the plaintiffs in O.S. No. 72 of 1942, who are now the? appellants in both these appeals.
(2.) THE lease in question has been exhibited as Ex. P -1. It deals with about 133 acres of land which were said to belong in jenm not to the lessors themselves but to the Ponnani Devaswom. The actual lessor was the karnavan of an illom to which this devaswom was attached. The lease was for, 48 years and the rates of rent were duly provided for. In Clause 4 of the lease it was provided that there should be no payment for improvements if either the lessor recovered possession of the property or if the lessee surrendered possession or if he were evicted by the lessor. In paragraph 7 there was the following provision: If, after 48 years of proper conduct and cultivation under this karar, you require this property yourself, you should, on that day, get the same granted under a special separate karar executed to you and conduct yourself in possession thereunder. It is this clause which has given rise to the present litigation. It is contended by the lessor that this clause does not confer upon the lessee any right to a renewal and by the lessee that it does confer such a right upon him. It seems to us that the view of the lessee must prevail. There seems no significance at all in the existence of this clause if it does not confer a right of renewal? It is a matter of common knowledge that when any agreement comes to an end it is always open to the parties to negotiate for a renewal of the agreement if they wish. There is no need whatever to insert so obvious a provision in any agreement. - The mere fact that the language of Clause 7 seems to subject the lessee to a kind of obligation to obtain the lease from the lessor does not in any way affect its true meaning in our opinion. We feel that the clause can have no other significance but as an expression of the intention of the parties that 48 years after the lease, comes into operation it will be renewed if the lessee requires a renewal. We accordingly agree with the learned Subordinate Judge in his view that under Clause 7 there was granted to the lessee a right of renewal.
(3.) IT was further argued that even if such a right of renewal were granted by Clause 7, it is not a contract or agreement which the Court can specifically enforce because it is too vague. The parties have agreed upon only one thing, namely, ' that the tenancy shall be renewed. They have still to agree upon at least two very essential matters connected with the tenancy, namely, the term for which it shall last in its renewed form, and the rent which shall be paid. It is impossible, so runs the argument, to regard Clause 7 as any kind of contract unless the parties have already decided what the term is to be and how much rent is to be paid. In support of this argument Sir Alladi Krishnaswami Ayyar for the appellants referred us to a decision of the House of Lords appended as a footnote to Foley v. Classique Coaches, Ltd., (1934) 2 K.B. 1, which is the case of May and Butcher, Ltd. v. The King., (1934) 2 K.B. 1 (footnote) We are however quite unable to agree that the facts of that case are in any way parallel to the facts here. That was a simple case of a tentative agreement by the parties to buy certain property in which it was held that until the purchase price was fixed there could be no contract. The very case itself to which May and Butcher, Ltd. v. The King, (1934) 2 K.B. 1 (footnote) was thus appended, Foley v. Classique Coaches, Ltd., (1934) 2 K.B. 1 and a decision of this Court reported in Secretary of State for India v. Volkart Brothers, (1926) 52 M.L.J.443 :, I.L.R. 50 Mad. 595, show on the other hand quite clearly that there can be an enforceable agreement in which the Court may presume that although the question of price or rent has not been already agreed upon by the parties, they have agreed with one another that the price or rent to be eventually paid shall be a fair and reasonable one. We consider that the present case comes clearly within the principle of those rulings rather than the ruling relied upon by Sir Alladi Krishnaswami Ayyar, and that we must presume here that in 1891 the parties did agree with each other that when the renewal came to be granted in 1939 it should be on fair and reasonable terms. We hold therefore that this agreement can be specifically enforced, subject only to the next argument put forward on behalf of the appellants. That argument was that it was beyond the powers of either a trustee, if the lessor be so regarded, or a karnavan of a Malabar illom, to make provision for the disposal of trust or illom property in this way for a period of more than 48 years. We were referred in this connection to two cases of the Madras High Court,, Kalliani Ammal v. Gopinda Menon, (1911)22 M.L.J. 23 :, I.L.R. 35 Mad. 648 where it is laid down that a karnavan cannot make an alienation for such a long period as 60 years in the absence of special necessity or special benefit, and Ramunni v. Kerala Varma ValiaRaja, I.L.R. (1891) Mad. 166, where it is regarded as axiomatic in the judgment that a perpetual lease was a disposition of an improvident character which could not bind a karnavan's successors. These rulings do not seem to us to have any particular bearing upon the facts of the case with which we now have to deal. They do not purport to lay down any fixed or unalterable rule limiting the power of a karnavan or a trustee in granting a lease to any particular period. It is of course true that leases in Malabar are normally granted for 12 years. It might well be said that it would be improvident on the part of a karnavan to grant lease of ordinary land for any longer period. But, as the learned Subordinate Judge has pointed out, the peculiar nature of the land with which we are now concerned must necessarily be regarded. It was waste land which was in a wild uncultivated condition at the time of the lease in 1891, and was granted, on lease for the long period of 48 years for the specific purpose of its being developed Into a planting estate. The learned Subordinate Judge holds that a long lease of this kind was essential for such a purpose to be effected, and it is significant that for the whole period between 1891 and 1939 on one in the illom has ever attempted to set aside the transaction entered into in 1891. It seems to us that if a lease of this kind can be granted for 48 years, and we agree that it can, in order that the land may properly be developed, a provision that it must inevitably be renewed, if the lessee wishes it, can be made by the karnavan. It seems to us clear that what is intended in a lease of this kind is the permanent improvement of the land, and its permanent use as a planting estate, and that if land is to be used in this way it will necessarily tend to the general prosperity of the owners of the land; and that it is in the interest of all parties that security of tenure should be granted to persons who are prepared to risk the capital necessarily required for improving the land. We are quite unable to hold that in giving to the lessee the right to demand a renewal the karnavan was doing anything against the interests of his illom, or of the trust property which he represents. There is nothing in the evidence in the case to suggest that any other kind of lease Would have been appropriate to this land. Reference to other leases shows that they were of a somewhat similar nature, and the most that could be argued on this part of the case was that prima facie it is improvident and unwise on the part of any karnavan to tie the hands of himself and his successors for any long period ahead. That such tying of the hands was necessary in the general interest of all parties is we think sufficiently proved in this case by a consideration of the nature of the use to which the land was to be put. We are accordingly of the opinion that the karnavan who executed the lease in 1891 did not act in excess of his powers in giving the right of renewal to the lessee.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.