JUDGMENT

Mohd. Azmi FJ:

The appellant's claim in this action is that under the terms of a lease agreement dated 14 February 1968, it is entitled to a perpetual covenant to renew the lease every 10 years, and therefore it prays for specific performance of the renewed lease which the covenant for perpetual renewals inserted as a term of the agreement. Although the principal issue for determination in this appeal is one of construction of Clause 4(e) in the lease (Exhibit AB37, pp. 86-100 of records), we propose to lay down the undisputed facts of the case which led to the present dispute. The respondent company and its predecessor in title, Mr. Makhanlall, owned three cinemas situated in Kuala Lumpur, Penang and Ipoh - all named as Star Theatre. At various periods before the dispute, the three cinemas were leased to Mr. Ong Keng Huat (PW1) either personally, or jointly with his partners, or leased to his company - the appellant. The negotiations as to the various leases were conducted by Mr. Makhanlall and subsequently by his son Mr. Shasikant Gupta (DW1) when Mr. Makhanlall became ill and died in 1969. We are not concerned, however, with the Penang and Kuala Lumpur Star Theatres. The dispute related only to the Ipoh Star Theatre at No. 130 Chamberlain Road, and as such we would confine ourselves, as did the trial Judge, to the lease granted by the respondent to the appellant in respect of this particular cinema. It was on 27 December 1957 that the respondent company entered into an agreement (Exhibit AB1, pp. 50-64 of records) with Mr. Ong Keng Huat and his partners Tan Chong, Teh Guan Hone and Hongkong United Company Limited whereby the respondent demised 10 lots of land on which the Star Theatre was situated, upon a lease for a period of 5 years from 1 September 1956. Under Clause 4(e) of the said agreement the lessees had a right to renew the lease for a further period of 5 years from the expiration of the term, at the same rent and containing the like covenants and provisos as were contained in the agreement. The option was never exercised by the partnership due to its early dissolution, but about two weeks before the expiry of the 1957 lease, Mr. Ong Keng Huat instructed his solicitors to request the respondent by letter dated 15 August 1961 for a lease of the cinema "for a period of 10 years with an option to renew for a further period of 5, 7 or 10 years" (Ex. D3). Nothing came out of this request and although no valid lease was granted to cover the period from 1 September 1961 to 31 August 1966, Mr. Ong Keng Huat entered into a fresh agreement with the respondent company through its director Mr. Makhanlall who was his close friend, originally in his own name but subsequently a separate agreement which is the one under dispute, was entered into in the name of his company, Keng Huat Film Company Sdn. Bhd. (the appellant) dated 14 February 1968 giving the appellant a lease for 5 years of the Star Theatre effective retrospectively from 1 September 1966 and expiring on 31 August 1971 (hereinafter referred to as "the first lease"). Under Clause 4(e) of the first lease which was similar in terms to Clause 4(e) in the 1957 lease, the appellant was given an option to renew the lease for a further 10-year period upon giving the respondent a written 6 months notice of the intention to renew. Under the said clause it was also provided that the lessor would grant to the lessee at the expiration of the lease a further term of 10 years, at the same rent and containing the like covenants and provisos as were therein contained. It is this covenant to renew the lease which has come up for determination both here and the Court below. There is no dispute that on 10 February 1971 the appellant gave the necessary notice through its solicitors of its intention to renew the lease which was expiring on 31 August 1971 (Exhibit AB52). The letter requested, inter alia, that the renewed or second lease should contain the same terms and conditions as