P.T. Chami vs A. Ana Pattar and Others

Coutts Trotter, J.—In this case the learned Judge found that the landlord tendered by paying into Court the whole value of the improvements

effected by the tenant. It is said that the Judge did not determine what was the exact sum due. What he did say was that ""the correct amount was

deposited because Rs. 100 was deposited"" and, of course, in a matter of this kind the value of the improvements cannot be accurately estimated.

All that he can say is whether the sum tendered was substantially reasonable compensation for the improvements; and he has found it was, and,

therefore, it was a perfectly good tender. I confess to a good deal of difficulty in seeing how the landlord was entitled to take the procedure of

paying into Court. But that is not complained of here and, therefore, no difficulty arises on that score.

That being so, the landlord then says that the tenant has got to pay him mesne profits for two years or for such period as he remained in

possession after the principal mortgage-money and the interest had been paid off and after there had been this tender of the amount due for

improvements. The Malabar Compensation for Tenants'' Improvements Act, Section 5, says: ""Every tenant shall, on ejectment, be entitled to

compensation for improvements which have been made by him... and every tenant to whom compensation is so due shall, notwithstanding the

determination of the tenancy or the payment or tender of the mortgage-money, be entitled to remain in possession until ejectment in execution of a

decree or order of Court."" The appellant says that this entitles him to turn a deaf ear to any tender or offer of the compensation money and squat

upon the land rigidly until a suit is actually brought. I think that is a wholly unreasonable construction of the Act and would permit wholly

unreasonable conduct on the part of the tenant. I think that when the landlord has tendered that which the Court has subsequently found to be the

true amount due and owing in respect of the improvements, if the tenant chooses to hold over after that date, he can do so only at his peril and on

condition of paying the mesne profits on the land, if the amount tendered is found to be adequate.

I desire to express no opinion as to whether the compensation under the Malabar Compensation for Tenants'' Improvements Act can be

treated, in circumstances like the present, all being part of the mortgage-money within the Transfer of Property Act. I do not know whether it is or

is not, but it is not necessary to decide that point for the purposes of this case, having regard to the fact that no point is taken about payment into

Court being a regular means of tendering, The appeal fails and is dismissed with costs.

Seshagiri Aiyar, J.

The question raised by Mr. Govinda Aiyar is not free from difficulty. I agree with him that the value of improvements cannot be brought under

the!expression ""amount due on the mortgage"" in Section 83 of the Transfer of Property Act, because the mortgage-money, as defined in the

Transfer of Property Act, only includes the principal and the interest. Therefore, I do not think that Section 83 of the Transfer of Property Act

enables the tender to be made. But we have Section 5 of the Malabar Compensation for Tenants'' Improvements Act and in Clause (1) of that

section it is stated that after the mortgage-money has been tendered, which must be, I suppose, u/s 83 of the Transfer of Property Act, the relation

of landlord and tenant subsists between the parties for certain purposes. If that relation subsists, the liability to pay mesne profits to the landlord by

the tenant also subsists. Then the further question arises as to whether during the subsistence of this relationship the landlord is entitled to tender the

value of improvements. There is Section 38 of the Contract Act, which enacts the general law that a person who is under an obligation, can tender

the amount to the person who is entitled to it. Mr. Govinda Aiyar has conceded in this Court that his complaint is not that the amount has not been

tendered to him personally but that it has been tendered in Court. Therefore, we may take it that he is not prejudiced by the fact that the tender of

the value of the improvements was made into Court and not directly to him. Applying the principle of Section 38 of the Contract Act, there was a

good tender and the obligation on the part of the landlord was performed. If that is so, the obligation on the part of the tenant u/s 5, Clause (2), of

the Compensation for Tenants'' Improvements Act remains and under that clause the tenant is bound to pay the mesne profits. I, therefore, agree

with my learned brother that the decision of the Court below is right in directing the appellant to pay the mesne profits after the period of tender by

the respondent. The question of costs was certainly in the discretion of the Court, and taking all the circumstances into consideration the Court

below has made a fair award. I see no reason to differ from the exercise of the discretion. I agree that the appeal should be dismissed with costs.