Important Point
Though leasehold interest may be bequeathed by a testamentary disposition, the landlord is not bound by it nor a stranger be trusted as tenant against the unwilling landlord and it would be open to the Government to regulate by appropriate covenants in the lease deed or appropriate statutory orders.

Headnote:Lease-Grant of leasehold right in land belonging to Government in a long lease for 999 years-Leasehold interest may be bequeathed by a testamentary disposition-However, landlord is not bound by it nor a stranger be trusted as tenant against the unwilling landlord-Whether lessee has a right to transfer in favour of a stranger in terms of the lease ? -(Yes), in view of permissive language used in lease deed-There is no such restrictive covenant contained for bequeath in favour of a stranger.
Held : that the object of assignment of the Government land in favour of the lessee is to provide him right to residence. If any such transfer is made contrary to the policy, obviously, it would be defeating the public purpose. But it would be open to the Government to regulate by appropriate covenants in the lease deed or appropriate statutory orders as per law or to make a law in this behalf. But so long as that is not done and in the light of the permissive language used in clause (12) of the lease deed, it cannot be said that the bequest in favour of strangers inducting a stranger into the demised premises or the building erected thereon is not governed by the provisions of the regulation or that prior permission should be required in that behalf. However, the stranger legatee should be bound by all the covenants or any new covenants or statutory base so as to bind all the existing lessees. (Para 10)

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

Leasehold Interest and Testamentary Disposition:
A lease of government land for a long period (e.g., 999 years) can be bequeathed through a testamentary disposition. However, the landlord (government) is not bound by such bequests, nor can a stranger be trusted as a tenant against the unwilling landlord (!) (!) .
Rights of the Lessee to Transfer or Bequeath:
The lease deed's language, particularly clause (12), indicates that a lessee has the right to bequeath the leasehold interest to multiple persons or heirs, who shall hold the property jointly or nominate one person to represent them. There is no explicit restriction on testamentary succession or bequeathing the lease to a stranger, provided certain covenants are observed (!) .
Covenants and Restrictions in Lease Deed:
Clauses within the lease deed (notably clauses 7, 8, and 12) deal with sub-letting, transfer, and succession. While clauses 7 and 8 prohibit transfer or sub-letting without prior government permission, clause 12 deals specifically with the scenario of the lessee’s death and the bequest to multiple persons or heirs. The language used suggests that a testamentary bequest to strangers is permissible unless explicitly restricted by law or lease covenants (!) (!) (!) .
Interpretation of the Term "Person":
The term "person" in clause (12) is interpreted to include heirs and multiple beneficiaries, but it does not necessarily extend to strangers unless the lease or law explicitly provides for it. The language used indicates that the bequest to a stranger is permissible under permissive language, but the government’s recognition of such a stranger as a tenant is not automatic and may require amendments or statutory orders (!) (!) .
Government’s Policy and Public Purpose:
The government’s primary object in granting long leasehold rights is to provide residence rights to the lessee and their close relations, aligned with constitutional principles of social justice and dignity. Any transfer contrary to policy, such as to strangers, could defeat the public purpose, but the government retains the authority to regulate such transfers through covenants or law (!) (!) .
Role of Covenants and Law:
The lease deed’s covenants (particularly clauses 7, 8, and 12) can be read together or separately. While covenants 7 and 8 restrict transfer and sub-letting without permission, covenant 12 does not expressly prohibit testamentary bequests to strangers. The government has the authority to amend lease covenants or enact laws to restrict or regulate such bequests if deemed necessary (!) (!) (!) .
Conclusion on Bequest Validity:
In the absence of explicit restrictions, a testamentary bequest by the lessee to a stranger can be considered valid under the current lease terms. The government is not automatically obliged to recognize the stranger as a tenant unless statutory or lease covenants are amended to prohibit such bequests (!) .
Government’s Authority and Future Action:
While the current lease terms do not prohibit bequests to strangers, the government retains the right to take further legal or legislative steps to restrict such transfers to align with public policy and the original intent of the lease grant (!) .

Please let me know if you need further analysis or specific legal advice related to this case.

Order

Leave granted.

We have heard learned counsel on both sides.

2. This appeal by special leave arises from the judgment of the Division Bench of the Calcutta High Court, made on January 19, 1996 in Appeal No. 182/95.

3. The admitted facts are that a lease for 999 years was granted by the Governor of West Bengal to one Tapan Kumar Mullick on July 28, 1983 assigning a plot of land No. CL-104 in Section II admeasuring 4.195 conttahs in Bindhannagar (Salt Lake) in Calcutta. The lessee had executed a Will in favour of the first respondent, a stranger to the family on July 2, 1992 of the lease-hold premises. The lessee died on May 22, 1993. Thereafter, the first respondent had applied for and was granted without any contest by the legal representatives of the lessee the probate to the Will by order of the Court dated May 19, 1994. It would, therefore, be obvious that the bequest was after receipt of consideration. Thereafter, the legatee had applied for mutation of his name in the record as lessee which was objected to and met with rejection. As a consequence, the respondent had filed writ petition under Article 226 of the Constitution. The learned single Judge directed to mutate the name of the first respondent as a lessee under the testamentary disposition made by the original lessee which was confirmed by the Division Bench of Calcutta High Court in Appeal No. 183/95 by judgment dated January 19, 1996. Thus, this appeal by special leave.

4. Shri V.R. Reddy, learned Additional Solicitor General, has contended that clauses 7, 8, and 12 of the indenture of the lease should be read together which manifest the intention that the lease was for the enjoyment of leasehold right of the demised site or a building constructed thereon either by the lessee or his legal representatives and one among them alone should be made responsible to and answerable to the lessor-appellant, the Government of West Bengal. It prohibited sub-letting or transfer without prior permission of the Governor; thereby, there is an implied prohibition to bequeath the leasehold right in the property in favour of the strangers. In that background, the word transfer employed in clause 8 of the lease deed would be understood in a broader sense. If so understood, any bequest made to a stranger, without the permission of the Government, does not bind the Governor. Therefore, the Government is not obliged to recognise a stranger as a lessee after the demise of the original lessee. In support thereof, he placed strong reliance on the judgment of a Division Bench of the Bombay High Court in Dr. Anant Trimbak Sabnis v. Vasant Pratap Pandit1. He also further placed reliance on a report given by the Committee constituted in that behalf on May 3, 1984 of the misuse of the leasehold right granted by seeking transfer in favour of the distant relations. On receipt thereof, the Governor by a notification specified that the near relations shall mean and include the father, mother, brother, sister, son, daughter, husband and wife. It prohibited registration under Registration Act by any other relative. It would amplify the intention of the Government in that behalf in granting leasehold interest of their land for the benefit of use and enjoyment of the demised premises for the residential purpose by the members of the family or near relations. The strangers were not intended to be inducted in and given enjoyment of the leasehold interest of the property demised by the Government. Unless the Government gives permission for such a transfer, it cannot be considered to be valid in law. The High Court thereby committed grave error of law in directing that a stranger be treated as a lessee of the Governor.

5. Shri D.P. Gupta, learned senior counsel for the respondents, on the other hand, contends that we are concerned in this case with the convents engrafted in the lease-deed. The relevant covenants are 7, 8 and 12. Each one deals, in its own parameters, with restricted covenants thereund

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1996 Supreme(SC) 2041

Cases Referred (3)