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1974 Supreme(Mad) 510

Madras High Court
RAMAPRASADA RAO,RATNAVEL PANDIAN
Khivraj Chordia - Appellant
Versus
Esso Standard Eastern Inc. - Respondent
Decided On : 11/29/1974

A covenant for renewal of a lease is not uncertain or vague if it provides a working rule by which the parties can agree to a particular thing being done, such as having regard to the rents prevailing in the locality.

Headnote:

LEASE RENEWAL - UNCERTAINTY - SECTION 29 OF THE INDIAN CONTRACT ACT - INTERPRETATION - MUTUAL AGREEMENT ON RENT - REASONABLE RENT - COURT'S JURISDICTION TO DETERMINE RENT - SPECIFIC PERFORMANCE.

Fact of the Case:

Khivraj Chordia filed a suit for recovery of vacant possession of the suit site from Esso on the ground that the lease period granted to them under Ex. A. 1, dated 16-1-1959, had expired. Esso filed a replicatory suit O. S. 98 of 1970 seeking specific performance of the contract to renew the lease under the terms of Ex. A.1 for a further period of 10 years commencing from 1-2-1969.

Finding of the Court:

The court held that clause 3 (d) of the lease deed, which provided for the renewal of the lease, was not uncertain or vague and could be made certain by the adoption of the working rule indicated therein. The court further held that the suit for specific performance filed by Esso was maintainable and that the court had jurisdiction to determine the fair and reasonable rent payable by Esso to Khivraj Chordia for the extended period of the lease.

Issues: 1. Whether clause 3 (d) of the lease deed by and under which the option to renew is sought to be exercised is vague, inoperative and unenforceable? 2. Whether the defendants are liable to grant a renewal of the lease as claimed by the plaintiffs and if so what are the terms on which the renewal is to be granted?

Ratio Decidendi: 1. The court interpreted clause 3 (d) of the lease deed and held that it was not uncertain or vague. The clause provided for the renewal of the lease for a further period of 10 years at a rent to be mutually agreed upon between the parties, due regard being paid to rents then prevailing in the same locality. The court held that this clause could be made certain by the adoption of the working rule indicated therein, which was to have regard to the rents prevailing in the locality. 2. The court held that the suit for specific performance filed by Esso was maintainable. The court relied on the decision in Jairam v. Harising, AIR 1967 Punj 159, which held that a person entitled to obtain possession by a suit for specific performance is already in possession of the property and is sought to be ejected by the other party to the covenant which is suggested to be specifically enforceable it may not be fair to direct the person in possession to file a suit for enforcing his rights and denying him the liberty of claiming to continue in possession as a defence in a suit for ejectment in exercise of the same right. 3. The court also held that it had jurisdiction to determine the fair and reasonable rent payable by Esso to Khivraj Chordia for the extended period of the lease. The court relied on the decision in D. J. Mangalmurti v. State of Bombay, AIR 1959 SC 639, which held that if the intention was to leave the enhancement to the subjective determination of the lessor, the clause would have more aptly said-'such enhancement as the lessor shall determine'. We consider that the words 'fair and equitable' must be given their due meaning and proper effect.

Final Decision: The court dismissed both the appeals filed by Khivraj Chordia. The suit for specific performance filed by Esso was decreed and the suit for eviction filed by Khivraj Chordia was dismissed.

Judgement

RAMAPRASADA RAO, J. :- The plaintiffs in O. S. No. 2434 of 1969 and the defendants in O. S. No. 98 of 1970 on the file of the City Civil Court, Madras, are the appellants in both the appeals. The appellants shall be hereinafter referred to as Khivraj Chordia. The respondents in both the appeals are Esso Standard Eastern Inc. hereinafter referred to as Esso. They were the defendants in O. S. 2434 of 1969 and the plaintiffs in O. S. 98 of 1970, Khivraj filed a suit for recovery of vacant possession of the suit site from Esso on the foot that the period of lease granted to them under Ex. A. 1, dated 16-1-1959, has expired by efflux of time and that Esso was no longer entitled either under law or by contract to remain in possession of the suit site in the absence of a renewal of the lease as contemplated therein. The prior correspondence between the parties such as Exs. A.2 to A.7, discloses the mind of Khivraj Chordia to obtain vacant possession of the site, which Esso resisted on the ground that under the terms of the lease deed Ex. A. 1 and in particular under clause 3 (d) of the same, they were entitled to be in possession of the same, and that they were not liable to be evicted. In answer to the suit for possession, Esso filed a replicatory suit O. S. 98 of 1970 seeking for specific performance of the contract to renew the lease under the terms of Ex. A.1 for a further period of 10 years commencing from 1-2-1969. Esso's main contention is that clause 3 (d) of the lease reflects 'certain' terms, which would compel Khivraj Chordia to cause a renewal of the lease in accordance with the tenor of the terms therein and the mere circumstance that Khivraj and Esso would not mutually agree to a just rent to be paid by Esso during the extended period of the lease sought to be demised would not compel them to surrender vacant possession. Thus, Khivraj Chordia's suit for eviction was countered by a suit for specific performance by Esso. These two suits were tried together and a common judgment was rendered by the court below, who framed the following issues for trial: O. S. 2434 of 1969:

1. Whether the plaintiffs are entitled to recover vacant possession of the suit property from the defendant?

2. Whether the plaintiffs are estopped from claiming possession of the demised premises except in accordance with the terms of the lease agreement dated 16-1-1959?

3. Whether clause 3 (d) of the lease deed by and under which the option to renew is sought to be exercised is vague, inoperative and unenforceable?

4. To what relief, if any, are the plaintiffs entitled?

O. S. No. 98 of 1970

1. Whether the clause for renewal in the lease deed is void and inoperative due to vagueness?

2. Whether the defendants are liable to grant a renewal of the lease as claimed by the plaintiffs and if so what are the terms on which the renewal is to be granted?

3. Whether the clause for renewal cannot be enforced for want of mutuality?

4. What relief are the parties entitled to?

2. The learned Judge after interpreting the particular recital and covenant in Ex. A. 1, came to the conclusion that the suit for possession filed by Khivraj Chordia deserved a dismissal and that therefore of the Esso for specific performance merited a decree. In the result, he dismissed O. S. No. 2434 of 1969 and decree O. S. 98 of 1970, declaring that a rent of Rs. 2000 per month is the fair and reasonable rent, which in the circumstances, Esso should pay to Khivraj Chordia " and directed the latter to specifically perform the contract of lease by entering into lease with Esso for a period of ten years commencing from 1-2-1969 in respect of the suit site and made it clear that the other terms and conditions, other than clause 3 (d) as contained in Ex. A. 1, should be incorporated in the new lease deed to be executed as between the parties. He decreed the suit for specific performance with costs, but dismissed the suit for eviction without costs. As against this, the present two appeals have b





































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