Parameshri and Another vs Vittappa Shanbhaga and Another

Bhashyam Aiyangar, J.—The plaintiffs (respondents) sue to evict the defendants (appellants) from the holding mentioned in the plaint on the

ground that the permanent lease (mulgeni lease), dated 24th April 1862, under which defendants'' claim to hold the property, has become void by,

reason of its absolute assignment to them in or about 1894, by one Seshappayya, who in 1890 became the assignee of the lease from, the original

lessee Yellappa Setti, and that by reason of such assignments in favour of the defendants there has been a forfeiture of the lease and the plaintiffs

are entitled to re-enter. It was stipulated in the counterpart of the lease, Exhibit A, that the lessee ""had no right to alienate the holding to anybody in

any manner whatever"" and that in the event of his ""not requiring the land,"" he would sell the improvements, which he might have made upon the

holding by that time, to the lessor alone, for a price that might be fixed by four respectable persons and that he would not sell the same to any one

else. The construction placed By the Subordinate Judge upon the lessee''s stipulation that he will not sell the same to any other person, that it refers

to the land itself and not simply to the improvements is clearly erroneous and the respondent''s pleader is unable to support such a construction.

The District Munsif held that there was no forfeiture of the lease by reason of the alienation and dismissed the plaintiffs'' suit so far as it sought to

recover possession of the holding. But the Subordinate Judge on appeal differed from the District Munsif and gave a decree in favour of the

plaintiffs for possession of the land on the ground that it was not necessary that the right of re-entry should be provided for in express terms, and

that inasmuch as under the terms of the lease, the lessee had no right to alienate and if he did not want the land, he was to sell the same to the

lessor with improvements, if any, effected by him, it followed that by reason of the alienation made in favour of the defendants, ""the lessor was

entitled to have the sale set aside."" As already stated, the Subordinate Judge misconstrued the lease in holding that the lessee agreed to sell his

interest in the land to the lessor.

The result of merely setting aside the sale would only be to restore the permanent lease-hold to the defendants'' assignor and that would not

entitle the plaintiffs to recover possession of the holding. The Subordinate Judge must be understood to mean that the plaintiffs are entitled to set

aside the lease.

In my opinion the decision of the Subordinate Judge cannot be upheld and the decree of the District Munsif should be restored. Though the

Transfer of Property Act, as such, may not be applicable to the case [Section 2 (c) and 117 of the Transfer of Property Act], yet the principle of

law governing the case will be found clearly enunciated in Sections 10 and 111(g) of the Transfer of Property Act. Section 10 provides that in the

case of a lease a condition absolutely restraining the lessee or any person claiming under him, from alienating his interest in the property is not void

where such condition is for the benefit of the lessor or those claiming under him. The stipulation that the lessee shall have no right to transfer his

interest is clearly one intended for the benefit of the lessor and it would be unreasonable to hold, following the dictum in Nil Madhab Sikdar v.

Narottam Sikdar ILR 17 C. 826 that ""the condition against alienation cannot be said to be for the benefit of the lessor and hence it is void under

the provisions of Section 10 of Act IV of 1882."" The stipulation against alienation is not void but valid Vyankatraya v. Shivram Bhat ILR 7 B. 256

and if the plaintiffs had sued for an injunction to restrain the defendants'' assignor from making the assignment or sued for damages for breach of

the stipulation, they would have been entitled to the remedy sought for Mohana v. Shekh Sadodin 7 B.H.C.R. 69; Tamaya v. Timapa Ganpaya

ILR 7 B. 262 McEacharn v. Colton 1902 A.C. p. 104; Foa on ''Landlord and Tenant'', 2nd Ed., p. 211. It may also be that a transfer by the

lessee absolutely or by way of mortgage or sub-lease in breach of the covenant not to alienate, will be void as against the lessor and he may realize

arrears of rent due by the lessee, by attaching and selling his interest in the lease as effectually as if there had been no transfer by the lessee and the

transfer will also be inoperative to secure to the transferee, as against the lessor, the benefit of the lessor''s contract u/s 108(c) of the Transfer of

Property Act. Assuming, therefore, that the stipulation against alienation is valid, the real question in the case is whether by reason of an alienation

in breach of such stipulation, the permanent lease is determined, in the absence of an express condition providing that on breach of the stipulation

against alienation, the lessor may re-enter or the lease shall become void. The fact that the landlord waived or did not enforce the forfeiture, if any,

which took place by the first absolute assignment in 1890, would not disentitle him to enforce the forfeitures if any, which subsequently accrued on

the occasion of the 2nd assignment in 1894. But the authorities are ''clear that in the absence of such express condition there will be no forfeiture

the lease ILR 7 B. 262; Narayan Dasappa v. Ali Saiba ILR 18 B. 603; Madar Saheb v. Nabawa Gujranshah ILR 21 B. 195. Even if there is no

express provision for re-entry on breach of a stipulation against alienation, yet if the lease were subject to a ""condition subsequent"" that by

alienation the lease shall become void, the lease would become void on breach of such condition and the lessor would be entitled t� re-enter.

(Wood-fall''s ''Landlord and Tenant,'' 16th Edition, pp. 192-328, 328; Foa, on ''Landlord and Tenant,'' pp. 237-238; ILR 21 B. 195. In the

present case it is impossible to construe the lease either as reserving a right of re-entry on breach of the covenant not to alienate or as conditional

on the lessee not making any alienation. The clause providing for sale of the improvements to the lessor himself and none else, when the lessee

does not require the lands, is evidently intended to restrain the lessee from selling the improvements to a stranger, while surrendering the lease

during the term thereof. A somewhat similar clause in the lease with reference to which the case in Narayan Dasappa v. Ali Saiba ILR 18 B. 603

arose was held not to give the lessor a right of re-entry by reason of the lessee having alienated the holding (at p. 605).

The difference between a provision against alienation which amounts merely to a ''covenant'' not to alienate - a covenant which runs with the

land 1902. A.C. 104 - and one which amounts to a ''condition'' which dispenses with the express right of re-entry in the event of breach is

explained in Woodfall''s '' Landlord and Tenant'' (16th Edition pp. 192-193) and in the English cases of Shaw v. Coffin 14 C.B.N.S. 372 Crawley

v. Price L.R. 10 Q.B. 302 and Do e v. Watt ILR 21 B. 197.

I am, therefore, clearly of opinion that the alienation under which the defendants claim does not entitle the landlord to terminate the permanent

lease and re-enter upon the land. The unreported decision of a Division Bench of this Court in S.A. No. 109 of 1879 cited in the judgment of the

lower appellate Court is strongly relied upon by the respondents in support of their contention that though no right of re-entry is reserved in the

lease, yet a breach of the covenant against alienation works a forfeiture of the lease. That decision does seem, on the face of it, to support this

contention, but it is opposed to the current of decisions above referred to and the law as laid down in the Transfer of Property Act, which is in

conformity with the English Law.

The second appeal must, therefore, be allowed with costs both in this and in the lower appellate Court and in modification of the decree of the

lower appellate Court, so much of the decree of the District Munsif as was reversed by the lower appellate Court must be restored.

Moore, J.

I concur.