Ismai Kani Rowthan vs Nazarali Sahib and Another

Bhashyam Aiyangar, J.—The only ground urged and argued in this appeal is that the decree appealed against should have provided for

payment to the appellant of compensation, before he is evicted from plots A, B and C, the measure of compensation being the present market

value of the buildings erected thereon by him, after he had taken a lease of plots A and B in 1875 for a term of 20 years and of plot 0 in 1887 for a

term of 3 years. In Exhibits B and C--counterparts of the leases relating to plots A and B--it is. expressly stated that the appellant took a lease of

the lauds for constructing a building thereon for carrying on trade and in Exhibit D, which relates to plot 0, it is provided that the appellant, who

was then erecting a thatched house on the plot, would remove the same and vacate the site in case the lessor (1st respondent''s father) wanted it to

construct a building thereon, for the Thaikkal to which the plots belonged.

In regard to plot C, no question of compensation therefore arises and the appeal so far as it relates to that plot is clearly unsustainable, firstly,

because the 1st respondent prior to the institution of this suit did give notice to quit (Exhibit E), expressly stating therein that the land was required

for erecting a building thereon for the Thaikkal and, secondly, because, according to the proper construction of Exhibit D, the condition relating to

the site being required for the erection of a building thereon for the Thaikkal, was to apply only if the lessee was to be required to give up the site

during the 3 years'' term of the lease.

As regards the buildings erected on plots A and B, it is not contended that they are of kind different from or of a value out of proportion to what

was in the contemplation of the parties when the transaction of lease was entered into. Nor has any claim been made on behalf of the 1st

respondent that the appellant is no longer at liberty to remove the buildings as he has not done so before the expiration of the term of the lease in

1895, or that, at any rate, at the option of the 1st respondent, the appellant must leave the building as it is, on payment to him of compensation for

his right to remove the building, the measure of such compensation being the value, not of the building as it is, but of the materials (after the building

should be demolished).

The only question, therefore for determination in this appeal, is whether the appellant can insist upon being paid the value of the house before he

is ejected; and as the two leases--Exhibits B and C--were taken before the passing of the Transfer of Property Act the question has to be

determined with reference to the law as it obtained here before the Transfer of Property Act. It has long been judicially settled in this country (see

the case of Thakoor Chunder Paramanick1 that the maxim of the English Law '' Quicquid inaedificatur solo solo cedit'' does not generally apply

here; and even in cases to which the English Law as such was applicale, the Indian Legislature by Act XI of 1855 has departed from the above

maxim in the cases specified in Section 2 of the Act (corresponding to Section 51 of the Tranfer of Property Act). So far as cases arising in the

mofussil are concerned, the Hindu or the Muhammadan Law as such is not strictly applicable to cases arising from contracts (vide Section 16 of

the Madras Civil Courts Act) and such cases must be governed by the rule of '' justice, equity and good conscience'' based upon the customary

law of the land which, in the absence of proof of any special usage or custom, will be presumed to be in accordance with the texts of the Hindu or

Muhammadan law as the case may be.

The Hindu and the Muhammadan law bearing upon the subject in question (in this appeal) was examined by a Full Bench of the Calcutta High

Court in the case of Thakoor Chunder Paramanick B.L.R. Supp. 595 and Sir Barnes Peacock, in delivering the judgment of the Full Bench, laid

down the common law of the land as follows:

We think it clear that, according to the usages and customs of the country, buildings and other such improvements made on land do not, by the

mere accident of their attachment to the soil, become the property of the owner of the soil; and we think it should be laid down as a general rule

that, if he who makes the improvement is not a mere trespasser, but is in possession under any bona fide title or claim of title, he is entitled either to

remove the materials, restoring the lund to the state in which it was before the improvement was made, or to obtain compensation for the value of

the building if it is allowed to remain for the benefit of the owner of the soil, the option of taking the building or allowing the removal of the material

remaining with the owner of the land in those cases in which the budding is not taken down by the builder during the continuance of any estate he

may possess. (at page 598).

The leading authority on the subject in the Hindu law is the following text of Narada (chapter VI, verses 20, 21--Sacred Books of the East,

Volume 33, pages 143, 144) :--"" (20). If a man has built a house on the ground of a stranger and lives in it, paying rent for it, he may take with him

when he leaves the house, the thatch, the timber, the bricks and other building materials. (21) But if he has been residing on the ground of a

stranger, without paying rent and against that man''s wish, he shall by no means take with him on leaving it, the thatch and the timber.

It may be noted in passing that the first of the above two texts is directly applicable to the present case and by providing that the tenant may

remove the materials of the house negatives by implication the right of the tenant to demand compensation. The latter text--which is applicable to

the case of a trespasser building on the land of another against that man''s wish--is in accordance with the maxim of the English law.

The Muhammadan law on the subject had recently to be considered and applied by the Judicial Committee of the Privy Council in a case on

appeal from His Majesty''s Court for Zanzibar in Secretary of State for Foreign Affairs v. Charlesworth Pilling & Co. ILR 26 B. 1. In that case the

respondents, an English Company, were owners of certain lands which they had purchased from the natives. The land was required by the British

Government for the construction of a railway and was taken possession of and buildings erected thereon in anticipation of the Indian Land

Acquisition Act being extended to Zanzibar by an order in Council and the land being duly acquired thereunder. Accordingly when the notification

u/s 6 of the Act was duly published, the buildings had been erected on the land. u/s 23 of the Act the company were entitled to compensation

according to the market value of the land as it was at the time of the publication of the declaration u/s 6. The respondents contending that

according to the maxim of the English law (already noticed)(they had become the owners of the buildings erected on their land (as they stood at the

date of the publication of the declaration up to which date their ownership in the land continued) claimed compensation for the land with the

buildings thereon. Their Lordships of the Privy Council held that the English law '' recognises the principle that the incidents of land are governed by

the law of its site'' and that this being the Muhammadan law in Zanzibar, the case was governed by the Muhammadan law. Following the text of the

Hedaya:--""If a person usurp land and plant trees in it or erect a building upon it, he must in that case be directed to remove the trees and clear the

land and to restore it to the proprietor. If removal... be injurious to the land, the proprietor of the land has the option of paying to the proprietor of

the trees or the building a compensation equal to their value and thus possessing himself of them; because in this case, there is an advantage to both

and the injury to both is obviated"" (Hamilton''s Translation, Vol. III, Book 37--p. 539)--they held that the respondent Company had not become

the owners of the buildings on their land at the date of the publication of the notice (under Section 6 of the Land Acquisition Act). Their Lordships

then point out that according to the Hedaya the compensation to which the person who erected the building would be entitled is only the value of

the materials of the building (after it is demolished), because he is not at liberty to have the building on the ground but only to remove and carry

away the materials.

Thus both under the Hindu and the Muhammadan law--and it may here be observed that the parties to the present suit are Muhammadans--and

the common law of the land (as laid down by the Full Bench of the Calcutta High Court in Paramnnick''s case B.L.R. Sup. 595 a tenant who

erects a building on land let to him can only remove the same and not claim compensation for it on eviction by the landlord.

When the Transfer of Property Act was enacted, this rule was adopted by the Legislature in Section 108 (h). The section provides, inter alia,

that in the absence of a contract or local usage to the contrary, the lessee must not without the lessor''s consent erect on the property (leased) any

permanent structure (except for agricultural purposes)(Clause p.), that the lessee, may remove at any time during the continuance of the lease all

things which he has attached to the earth (Clause h and vide; definition, of '' attached to the earth'' in Section 3) and that on the determination of the

lease the lessee is bound to put the lessor into possession of the property in as good a condition as it was in at the time when he was put in

possession [Clause (q) and (m)]. It will thus be seen that the prohibition in (Clause p) against the construction of permanent structures on the land

(except for agricultural purposes) does not apply when, according to the contract of the parties, the land is let for the erection of a dwelling house

or shop thereon (as in the present case) and that under Clause (p) buildings erected on the land by the lessee may be removed during the term of

the lease and that under Clause (q) and (m),the lessee should, on the determination of the lease, restore the land to the lessor in the state in which it

was at the time of the letting. Even if the building erected on the land demised be one contemplated and sanctioned by the lease, the above

provisions will be applicable thereto unless there is a contract or local usage to the contrary--(such as) that the lessee shall, on eviction, be entitled

to compensation for the building or that he shall with or without compensation, restore the land let to him with the buildings that he may have

erected thereon during the continuance of the lease.

The rules laid down by the Transfer of Property Act thus substantially reproduce the law as it stood before the Act. It is, however, noteworthy

that Clause (h)(of Section 108) only provides for the tenant removing, '' during the continuance of the lease,'' all things which he may have attached

to the land and nothing is said as to the rights of the parties in respect of such things after the determination of the lease, if they have not been

already removed by the tenant. -The question may arise whether the tenant forfeits all his rights in such things if he has not so removed them; and in

the absence of any contract on that point, the question will have to be solved with reference to '' local usage,'' whatever may be the precise sense in

which that expression is used in Section 108. According to the customary or common law of the land, as laid down in Paramanick''s case B.L.R.

Sup. 595 the option in such cases will be with the lessor either to take the building on paying compensation, or, if he is unwilling to pay

compensation, to allow the tenant to remove the building--the measure of compensation (in the former case), according to the Muhammadan law

as laid down in the Hedaya, being the value of the materials (after the building is demolished)--a juristic principle as logical and refined as, in the

great majority of cases, it is advantageous to both parties by obviating injury to either and at the same time preserving the building. As already

observed, the 1st respondent in the present case, however, allows the appellant to remove the building.

The preponderance of case law on the subject is also decidedly against the appellant''s contention. In a case arising in Calcutta between

landlord and tenant (Parbutty Bewah v. Womatara Dabee 14 B.L.R. 201 it was held that the custom was for tenants to remove the structures

erected by them and that such custom had its origin in the Hindu and the Muhammadan laws as explained in Paramanick"" case. In Russick Loll

Mudduck v. Lokenath Kurmoker ILR 5C. 688 Wilson, J., held that the relation between landlord and tenant (in the Presidency Town of Calcutta)

being one of '' contract and dealing between party and party'' within the meaning of Section 17 of 21 Geo. III, c. 70, was governed by the Hindu

or the Muhammadan law, as the case may be--the Indian Contract Act not being inconsistent with it in this respect--and that the ruling of the Full

Bench in Paramanich''s case as to the removal of the buildings erected by the tenant was applicable to Calcutta. In Juggut Mohinee Dossee v.

Dwarka Nath Bysack ILR 8 C. 590 however, Garth C.J. and Pantifix, J., while holding that the ruling in Paramaick''s case would be applicable to

Calcutta in cases arising between landlord and tenant, held that in cases arising in Calcutta between an owner of land and a trespasser erecting

buildings upon it, the High Court was bound by the express language of the charter to administer the law of ''equity and good conscience'' as

administered by the Supreme Court, which generally speaking was '' the self-same law of equity administered in the English Courts of Equity'' and

that therefore, the building became the property of the owner of the land. The ruling in Parmanick''s case has been approved by the Calcutta High

Court in a recent decision in Ismail Khan Mahomed v. Jaigun Bibi ILR 27C. 670

In Shaik Husain v. Govardhandas Paramanandas ILR 20B. 1 it was held in the case of a yearly tenancy (in the town of Bombay) that there

was "" no authority for holding that a tenant who erects buildings on a demised land is entitled to compensation on being evicted on the termination

of his tenancy"" and that such claim for compensation is impliedly negatived by his right to remove such buildings--a right not only established by

judicial decisions but also now enacted by the Legislature in Section 108 (h) of the Transfer of Property Act. It would seem that in this case also,

as in the present case, the land was demised for building purposes. In Beni Bam v. Kundan Lal ILR 21 A. 496 there was a lease, given in 1858, of

six bighas of land for a term of years (ending with the then current revenue settlement of the mouzah in which the land leased was situate), for the

construction thereon of a saltpetre factory. During the term of the lease, the tenant, after the completion of the factory and, in fact, after it had

ceased to exist, erected houses on the land, at a considerable cost, with the knowledge of and without any interference or objection on the part of

the landlord. A suit in ejectment brought after the termination of the lease was dismissed by the Indian Courts (including the High Court on second

appeal) on the ground that the landlord stood by and acquiesced in the erection of the permanent structures. On appeal (by special leave) their

Lordships of the Privy Council, in reversing the decrees of the Courts below and passing a decree in ejectment, with liberty to the tenant to remove

the houses built on the land, observed that ""in order to raise the equitable estoppel which was enforced against the appellants by both the Appellate

Courts below, it was incumbent upon the respondents to show that the conduct of the owner, whether consisting in abstinence from interfering, or

in active intervention, was sufficient to justify the legal inference that they had, by plain implication, contracted that the right of tenancy under which

the lessees originally obtained possession of the land should be changed into a perpetual right of occupation "" (at p. 502). They further draw

attention, to the fact that the maxim of the English law '' Quicquid inaedificatur solo solo cedit'' has no application in India and that the established

rule is that the lessee may remove at any time during the continuance of the lease all things which he has attached to the earth, provided he leaves

the property in the state in which he received it''; implying thereby that there is thus in India even less reason than in England, for raising a plea of

equitable estoppel against the landlord in the case of a lease for a term of years. In Venkatavaragappa v. Tirumalai ILR 10 Mad. 112 it was held

that where a tenant from year to year with the permission of the landlord sank wells in the land demised, he. was not entitled, under the Hindu law,

to any compensation therefor, from the landlord, after the determination of the tenancy.

In Jaymohan Das v. Pallonjee ILR 22 Bom. p. 1 it was held by Strachey, J., that a tenant who had erected buildings and effected

improvements on land demised to him was not entitled to be paid their value on the determination of the tenancy merely because he had acted

under a mistaken belief, shared by his landlord, that he had a larger interest (a lease for 999 years) than ho really had (one from year to year).The

case principally relied on by the appellant''s pleader is that of Mahalatchmi Ammal v. Palani Chetti 6 M.H.C.E. 245. In that case, a piece of land

had been demised as house-site with permission to erect a permanent building thereon. The lease was in writing and it was construed by the Courts

as creating only a tenancy from year to year. The suit was brought by the lessor to recover the housesite and compel the defendants to remove the

building they had erected on the land. The lower appellate Court passed a decree to the effect that the plaintiff should either pay to the tenant the

value of the building and recover the site with the building on it, or sell the site to the defendants. On appeal preferred by the plaintiff to the High

Court this decree was confirmed. The material portion of the judgment bearing on the question is as follows :--(Holloway, J.) "" A piece of land of

small value is granted as a house-site. The resumption of such land at all is most uncommon; the general understanding is that the holding shall be in

perpetuity at the fixed rent. The contract being in writing we are not at liberty to say that the tenancy is to endure beyond the term expressly fixed,

but, following many cases, we are at liberty to say that the resumption shall be only upon the terms of the lessor compensating for the permanent

improvements upon the laud and we are certainly not at liberty to say that in so deciding the Principal Sadar Amin is wrong."" (Innes, J.)?'' Plaintiff

lets the land to defendant by an instrument in which it is expressly permitted him to erect permanent buildings. This instrument has been construed

as a lease from year to year and that const ruction has not been disputed in special appeal. It must, therefore, be taken to be what it has been

found to be. But it is clear that it could not have been the intention of the parties that, after the defendant had gone to the outlay contemplated by

the agreement of the parties, plaintiff should be at liberty to treat this as a lease from year to year and nothing more and to eject defendant at any

yearly term, with the almost total loss of the advantage to be derived from the money he has been induced, under the agreement, to lay out. For if

this were so, all that defendant could do would be to pull his house to pieces and remove the material which would not, of course, realize anything

like the value of the building. I think, therefore, that the decision of the Principal Sadar Amin is in accordance with principal in decreeing that

plaintiff, before ejecting defendant, must pay the value of the buildings.

It is by no means clear what the "" many cases "" referred to as precedents by Holloway, J., are. They are probably cases the principle of which

is enunciated in Section 51 of the Transfer of Property Act relating to improvements made by the transferee of land, believing in good faith that he

is absolutely entitled thereto--and the form of the decree (affirmed by the High Court) giving the option, to the owner of the property, (as in the

class of cases referred to in Section 51) either to buy the building or to sell the site to the tenant makes it all the more probable that the precedents

which Holloway, J., had in view were such cases. The defendant in that case contended that the lease was a permanent one and not one from year

to year, though the instrument was otherwise construed by the Courts. The terms of the lease are not set forth either in the report of the case or in

the judgments. But if the lessee believed in '' good faith '' [vide Section 3, Clause (20) of the General Clauses Act X of 1897]--as is probable from

the circumstances adverted to in the judgment of Holloway, J.--that he had, in the property, the absolute interest of a permanent lessee and in such

faith erected a permanent building on the site, the case would probably fall within the class of cases referred to in Section 51 of theTransfer of

Property Act. (Shaik Husain v. Govardhandas Paramanandan ILR 20 B. 1 of Jagmohan Das v. Pallonjee ILR 22 B. 15.

The decision of Innes, J., however, seems to proceed on a different principle. From the fact that the lease expressly permits the tenant to erect

permanent buildings, the learned Judge apparently implies, as one of the terms of the contract of letting, that the lessor would not exercise his right

of ejectment without paying compensation for the buildings erected by the tenant. Whether the learned Judge would have implied such a term, if the

lease had been not one from year to year, but one for a term of 20 years (as in the present case) or for a longer period, it is not possible to say. If

such a term is to be annexed to the contract by implication, it will be difficult to make a distinction (in this respect) between leases for a short term

and leases for a long term. With all defference it is not possible to hold that such a term can be annexed by implication. If there be a well-

established usage to that effect, it will of course be an incident of the contract. But, as already shown, the customary law of the land is otherwise

and Karada''s text (verse 20 already quoted) refers specifically to the taking of land on lease for building purposes. If, in the above case, the lessee

had, as he might have, terminated the yearly lease shortly after he erected the building, could he have required the landlord to pay him the cost of

the building or sell to him the land ? The only difference between letting land without permission--either express or implied--to erect buildings

thereon and letting the same with such permission, is that in the former case the lessee cannot under Clause (p) of Section 108, Transfer of

Property Act, erect any permanent buildings on the land (except for agricultural purposes) and if he does so, a suit for a mandatory injunction for

the removal of the building even during the term of the lease will lie (Ramanadhan v. Zamindar of Ramnad) ILR 16 M. 407.

It is unnecessary to refer to cases in which it has been held either that the leasehold tenure was a permanent one and therefore an ejectment

would not lie, or that the conduct of the lessor was such as to raise an equitable estoppel in favour of the lessee for compensation on eviction (vide

Yeshwadabai and Gopikabai v. Ramachendra Tuharam ILR 18 Bom. 66 Dattatraya Raynji Pai v. Shridar Narayan Pai 17 Bom. 736. In the

present case the lease was for a definite term of 20 years with permission to build oil the land and there can be no pretence that the lessee did or

could believe in good faith that he had a permanent right in the property or that any conduct of the lessor, subsequent to the lease, has created an

equitable estoppel against his evicting the tenant without compensation.

The second appeal therefore fails and I would dismiss it with costs.

Moore, J.

I concur in the conclusions arrived at by my learned colleague and in holding that this second appeal should be dismissed with costs.