IN THE HIGH COURT OF MADRAS
S Aiyangar
Varanasi Ramabrahmam
Versus
Kota Rami Reddi And Ors.
Decided On : 22 February, 1927
Forfeiture of Lease - Days of Grace - Transfer of Property Act, Section 114
Fact of the Case:
The plaintiff, a landlord, sued to eject the defendant, his tenant, for non-payment of rent as per the lease agreement. The lease agreement provided for forfeiture if the rent was not paid by a certain date.
Finding of the Court:
The Court dismissed the second appeal, upholding the lower appellate court's decision in favor of the tenant, exercising discretion in favor of the tenant against forfeiture.
Issues: The main issue was whether the provision for forfeiture in the lease agreement was enforceable and whether the tenant could be relieved against forfeiture.
Ratio Decidendi: The Court held that the provision for forfeiture in the lease agreement was not penal in nature and that the Court had the power to relieve the tenant against forfeiture, depending on the circumstances of the case.
Final Decision: The appeal was dismissed, and the appellant was ordered to pay the respondent's out-of-pocket expenses for the appeal.
Srinivasa Aiyangar, J.
1. On behalf of the plaintiff appellant in this second appeal Mr. Raghava Rao has addressed to me a long, and learned argument, and after considering all that he has submitted I have come to the conclusion that the second appeal must be dismissed.
2. The plaintiff as landlord sued to eject the defendant, his tenant, on the ground that the rent in respect of the land was not paid by the tenant on or before the 1st April for the fasli, and that, according to the clause in the lease, forfeiture followed. The covenant or condition in the lease is to this effect: the tenant, it is stated, should pay the rent due on or before the 1st March, and if he should make default, pay the same with interest at 12 per cent. per annum on or before the 1st April following; and that if, even then he should make default in the payment of the rent due he was liable to be ejected from the holding even without notice. The argument of Mr. Raghava Rao, the learned vakil for the appellant, was that this period between the 1st March and the 1st April was, what he-terms "days of grace" and his contention was that, if in any lease the landlord gave the tenant any days of grace, then the equitable right the Court has of relieving the tenant against forfeiture is taken away and that in such a case the Court has no power at all to grant any relief against forfeiture. I think it is inaccurate to call the period between the 1st March and the 1st April as days of grace. It is clearly not days of grace for purpose of the payment of the rent because, according to the deed the rent is payable on the 1st March and, though it carries interest at 12 per cent. per annum from that date, it cannot possibly be contended on the true meaning and construction of the deed that the landlord would have no right to maintain a suit for the payment of the rent, although it has fallen due and become payable. The days of grace, strictly so-called, are clearly days before the expiry of which there is no right of action for the party giving the days of grace. I am rather inclined to think that this expression " days of grace" has come to be somewhat loosely used in connexion with this discussion on this matter in the course of some judgments. I may also further point out in this connexion that the expression days of grace" seems to be further inappropriate because it would be apt and proper only when the liability which ultimately arises or attaches on the expiry of the days of grace is itself said to arise in some way before the commencement of the days of grace. Obviously in the present case no question of the determination of the tenancy or the liability to eject arises on mere default in the payment of rent on the 1st March. I shall later on refer to the cases that have been cited before me with regard to this matter and I am conscious that in some of these cases, the expression days of grace" has been used; but I believe it was used, as I have already observed, somewhat loosely and merely to indicate that the clause of forfeiture was really not in the way of a penal clause introduced in the contract to operate in terrorem over the contracting party but by consent between the parties as part of the contract itself and with the deliberate object of liability to performance.
3. Now with regard to the argument of the learned vakil for the appellant that, whenever even where the provision in the lease is to the effect that the forfeiture of the lease should result not on the mere nonpayment of any rent on due date but on some subsequent date or on the happening of further conditions, the forfeiture is not capable of being relieved against, I do not see my way to agree to any such contention. As a matter of fact I am aware of and I have come cross very few leases of any kind in which on the mere non-payment of rent on the due date forfeiture follows. In most cases forfeiture is provided to follow only on further default being made, that is, as in some cases
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