The strict construction of forfeiture clauses and the interpretation of 'bankruptcy' under the Conveyancing and Law of Property Act, 1881, were central to the court's decision.

Horace Owen Compton Beasley, Kt., C.J.

1. The plaintiff is the appellant. His suit was dismissed in the trial Court and his appeal to the District Court was also dismissed.

2. The appellant by Ex. E, a lease deed, dated the 4th February, 1924, leased the suit properties to one Nilkanath Narayan Khale for a term of 75 years. It was admitted during the trial and in the lower Appellate Court and here that Khale was a benamidar for the Malabar Forest and Rubber Company, Limited. The High Court of Bombay on the 8th July, 1926, made an order for the compulsory winding up of that company on a petition, dated the 12th May, 1926, presented by Messrs. Sabnis & Co., the Managing Agents of the Company to whom Khale had assigned his rights under the lease, and Mr. Moos was appointed the Official Liquidator of the Company and represents them here as the first respondent. The point for consideration is whether there has been a forfeiture of the lease giving the appellant the right of re-entry as claimed by him. Both the lower Courts, upon a consideration of Ex. E, have negatived the appellants claim. The material part of the forfeiture clause in Ex. E, reads as follows:

or if the lessee becomes bankrupt the lease shall ipso facto cease and this shall be void and lessor shall have the right to re-enter and take possession of the said premises as if this lease were non-existent and without the lessee being entitled to claim damages or compensation of any kind from the lessor.

3. The appellant claims that by reason of this clause the company by going into liquidation has forfeited the lease. The appellant contends that the words "lessee becomes bankrupt" mean and are intended to mean, as regards the word "lessee" the company, and, as regards the word "bankrupt", its being ordered to be wound up by the Court. It is argued that the parties to Ex. E, regarded company as the lessee and not Khale who admittedly was merely the benamidar for the company, that the contract really was with the company and not with Khale, and that it was the companys going into liquidation and not the insolvency of Khale that was to incur the forfeiture and give the appellant the right of re-entry.

4. It is the admittedly benami character of the transaction which enables the appellant to set up the first position, namely, that the company is the lessee. If that position should be established it is contended next that the word "bankrupt" there must be given an artificial and extended meaning which embraces the compulsory or even voluntary winding up of the company and English decisions have been cited in support of this contention. In the Conveyancing and Law of Property Act, 1881, in Section 2(xv) "Bankruptcy" is defined as follows:

Bankruptcy includes liquidation by arrangement, and any other act or proceeding in law having, under any Act for the time being in force, effects or results similar to those of bankruptcy; and bankrupt has a meaning corresponding with that of bankruptcy.

5. Section 14 deals with provisos for re-entry or forfeiture and relief against forfeiture of leases but Sub-section (6) of that section expressly does not extend the provision as to relief to a condition for forfeiture on the bankruptcy of the lessee. The Act therefore grants no relief where there is a condition for forfeiture on bankruptcy as defined in Section 2(xv). According to Lord Halsbury, L.C. in Fryer v. Ewart (1902) A.C. 187 "Bankruptcy" as defined in Section 2(xv) of the conveyancing and Law of Property Act, 1881, has an artificial and extended meaning and includes the winding up of companies. In that case there was a proviso in the lease for re-entry if the lessees being a company should enter into liquidation either compulsory or voluntary and it was held that such a proviso applies to the case of a solvent company going into voluntary liquidation for the purpose of reconstruction or amalgamation only, and is "a condition for forfeiture on the bankruptcy of the lessee" within t