1950 Supreme(SC) 47

 SUPREME COURT OF INDIA
1st December 1950
H.J. KANIA C.J.I., PATANJALI SASTRI AND S.R. DAS JJ.
Kamala Ranjan Roy - Appellant
Versus
Baijnath Bajoria - Respondent.
Appeal No. 4 of 1950:
Advocates appeared
Shri N. C. Chatterjee, Senior Advocate, (Shri Samarendra Nath Mukherjee, Advocate, with him), instructed by Shri P. K. Chatterjee, Agent - for Appellant; Shri P. L. Bannerjee, Senior Advocate, (Shri Upendra Chandra Mullick, Advocate, with him), instructed by S. K. Gosh, Agent - for Respondent
Assignment whether breach of contract

Headnote:SPECIFIC RELIEF ACT (1877)

        Specific Relief Act (1877), S. 12-Specific performance of agreement-Covenant allowing assignment with lessors consent-Effect Lessor withholding consent unreasonably-Assignment whether breach of covenant-Transfer of Property Act (1882) S. 108 (j)-Additional evidence taken by appellate court-Objection in second appeal-Civil Procedure Code (1908), O.41, R. 2.7.

       A let out certain premises to B. The lessee covenanted, amongst other things not to assign the unmissed premises or any part thereof without first obtaining the written consent of the lessor, such consent, however, not to be unreasonably withheld in the case of respectable or responsible person". There was the usual proviso for re-entry for non-payment of rent for three months or for breach of any of the lessees covenants, without prejudice to the lessors right of action for such breach. B with the consent of A assigned the unexpired residue of the lease to the defendant who was accepted as the lessee by A. The defendant was alleged to have agreed to assign the said lease to the plaintiff for the unexpired residue of the term. The defendant wrote a letter to A intimating that he had agreed to assign his interest in the lease to the plaintiff and requesting him to give his consent in writing to such assignment. A replied that the question of his giving consent to the transfer of the lease could not be entertained as he had already determined the lease for non-payment of rent and that in the circumstances the whole initiative was in the hands of the defendant. The defendant informed the plaintiff that he had approached A but had failed to secure his consent and that, as no valid transfer could be made without such consent and the agreement for sale was subject to such consent being obtained the defendant was reluctantly compelled to cancel the agreement. The plaintiff contended that the agreement was not subject to the alleged condition and that the defendant was not entitled to cancel the agreement. A filed a suit against the defendant for the recovery of the demised premises on the ground that the lease had been determined. During the pendency of that suit the plaintiff brought a suit for specific performance of the agreement to assign the lease. The forfeiture of the lease for non-payment of rent was subsequently waived and the lease was accordingly revived.

       Held: (1) "The words such consent, however, not to be unreasonably withheld in the case of respectable or responsible person contained in the covenant do not amount to a separate or independent covenant by the lessor that he would not refuse consent, except upon reasonable process in the case of respectable or responsible person, but that those words limit or qualify the lessees covenant not to assign the demised premises without the consent in writing of the lessor. In other words, those words have the effect of relieving the lessee from the burden of this covenant if the lessor withholds his consent unreasonably in case of proposed assignment to a respectable or responsible person". (per Das J.)

       (2) "It is said that by directing the specific performance of the agreement the Court has exposed the defendant to the risk of an action for damages for breach of covenant. If the assignment of the lease by the amendant to the plaintiff without the lessors consent amounted to a breach of covenant, the lessor could forfeit the lease and sue for possession. Such a course would affect only the plaintiff but not, the defendant, for he had already parted with the lease for valuable consideration. It is said that the lessor could sue the defendant for damages for breach of that covenant and the Court should not, by decreeing specific performance, have put the defendant on that perilous position. There appears to us to be two answers to this argument, namely (1) that the defendant should have, by proper language, made his obligation to transfer dependent or conditional upon his being able to obtain the lessors consent which he did not do and (2) that the plaintiff being a respectable and responsible person of means, the measure of damages could only be a problematic conjecture. Indeed, it may have been precisely for this very consideration that the defendant had unconditionally agreed to obtain the consent of the lessor and to assign his interest in the lease. That the plaintiff was a respectable and responsible person cannot, on the evidence before the Court, be denied or disputed and, indeed, learned counsel for the appellant did not so contend. We find ourselves in agreement with the High Court that in the circumstances and on the evidence on record the lessor had unreasonably withheld his consent so as to enable the defendant to assign the lease without such consent. In the circumstances, we are satisfied that both the Trial Court and the Appeal Court exercised their discretion properly and no ground has been made out for our interfering with the judgment of the High Court." (Ibid).

       (3) Where the appeal court allows the additional evidence to be given in order to clear up certain matter for the purpose of enabling it to come to a proper decision on the point, the matter is fully covered by O. 41, R. 27, Civil P.C., and no objection can be taken to the course adopted by the appellate court in second appeal as there is no reason to interfere in the exercise of the Courts discretion. - Transfer of Property Act (1882), S. 108 (j)-Covenant allowing assignment with lessors consent-Consent not to be unreasonably with held Effect of clause. - Section 100-Order 41, Rule 27-Appellate Court taking additional evidence-Objection in second appeal whether competent.

       The appeal court required the evidence "in order to clear up the matter", and "for the purpose of enabling it to come to a proper decision on this point."

       Held: The matter is fully covered by O. 41, Rule 27, Civil Procedure Code and no objection can be taken to the course adopted by the appeal Court on that ground. - Section 100 -Second appeal-Question of law-Limitation Act, S. 18.

       See under "Limitation Act."