Case Note & Summary
The petitioner, as lessor, had granted a sub-lease of land and buildings to the first respondent for 98 years. The sub-lease deed contained covenants requiring the sub-lessee to pay monthly rent, municipal taxes, insurance premium, and maintain the property. The sub-lessee failed to pay municipal taxes and insurance premium, leading the petitioner to serve a notice to quit and file a suit for eviction in 1968. The Trial Court decreed eviction on 11th August 1976, but the Appellate Bench of the Court of Small Causes reversed the decree on 6th November 1987, holding that the breach did not justify forfeiture under Section 111(g) of the Transfer of Property Act, 1882. The petitioner challenged this reversal under Article 227 of the Constitution. The High Court found that the Appellate Bench had erred in law. It held that the failure to pay municipal taxes and insurance premium was a breach of an express condition of the lease, which entitled the lessor to forfeiture and eviction. The court noted that the sub-lease deed clearly stipulated these obligations and that the breach was not remedied despite notice. Consequently, the High Court set aside the Appellate Bench's judgment and restored the Trial Court's decree for eviction.
Headnote
A) Property Law - Lease - Forfeiture - Breach of Covenant - Section 111(g) Transfer of Property Act, 1882 - The sub-lessee failed to pay municipal taxes and insurance premium as required under the sub-lease deed. The court held that such failure constituted a breach of an express condition of the lease, entitling the lessor to forfeiture and eviction. The Appellate Bench erred in holding that the breach did not justify forfeiture. (Paras 2-5)
B) Property Law - Lease - Notice to Quit - Section 108(p) Transfer of Property Act, 1882 - The lessor served a notice to quit upon the sub-lessee for breach of covenant. The court held that the notice was valid and the sub-lessee's failure to remedy the breach within the stipulated period justified eviction. (Paras 3-4)
Issue of Consideration
Whether the Appellate Bench of the Court of Small Causes was justified in reversing the decree for eviction on the ground that the breach of covenant to pay municipal taxes and insurance premium did not constitute a breach of a condition entitling forfeiture under Section 111(g) of the Transfer of Property Act, 1882.
Final Decision
The High Court allowed the writ petition, set aside the judgment of the Appellate Bench of the Court of Small Causes dated 6th November 1987, and restored the Trial Court's decree for eviction dated 11th August 1976.
Law Points
- Breach of covenant
- Forfeiture of lease
- Eviction decree
- Sub-lease
- Municipal taxes
- Insurance premium
- Notice to quit
- Section 111(g) Transfer of Property Act
- 1882
- Section 108(p) Transfer of Property Act
Case Details
2006 LawText (BOM) (10) 74
Writ Petition No.997 of 1988
Ms. P.D. Ankalesaria, Senior Advocate with Mrs. S. V. Bharucha for the Petitioner; Mr. Firdosh Pooniwala with Ms. Sheetal S. Shah i/b. Mehta & Girdharilal for the Respondents.
Goswami Shri Vallabhalalji Dwarkesh Lalji Maharaj (since deceased by his heirs, Shri Harish Vallabhdas Goswami alias Vithalnathji Goswami alias Lalmaniji Goswami)
Brij Mohan Kanodia (since deceased by LRs Govind Prasad Kanodia & Ors.)
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Nature of Litigation
Civil writ petition under Article 227 of the Constitution challenging the appellate judgment reversing a decree for eviction.
Remedy Sought
Petitioner sought restoration of the Trial Court's decree for eviction against the sub-lessee.
Filing Reason
The Appellate Bench of the Court of Small Causes reversed the eviction decree, holding that breach of covenant to pay municipal taxes and insurance premium did not justify forfeiture.
Previous Decisions
Trial Court decreed eviction on 11th August 1976; Appellate Bench reversed on 6th November 1987.
Issues
Whether the failure to pay municipal taxes and insurance premium constituted a breach of condition entitling forfeiture under Section 111(g) of the Transfer of Property Act, 1882.
Whether the Appellate Bench erred in reversing the eviction decree.
Submissions/Arguments
Petitioner argued that the sub-lessee's failure to pay municipal taxes and insurance premium was a clear breach of express covenants, justifying forfeiture and eviction.
Respondent argued that the breach did not amount to a condition entitling forfeiture under Section 111(g).
Ratio Decidendi
The failure of a lessee to pay municipal taxes and insurance premium as required by an express covenant in the lease deed constitutes a breach of condition entitling the lessor to forfeiture under Section 111(g) of the Transfer of Property Act, 1882, and subsequent eviction.
Judgment Excerpts
The Appellate Bench of the Court of Small Causes at Mumbai by its Judgment and Order dated 6th November 1987 allowed an appeal against the judgment of the Trial Judge by which a suit for eviction instituted by the Petitioner in 1968 was decreed on 11th August 1976.
Among them were obligations (i) To pay a monthly rent of Rs.6,021/-; (ii) To pay all existing and future Municipal taxes; (iii) To insure the property for a sum at least of Rs.2,50,000/- in the name of the Petitioner's father and pay premium thereon; and (iv) To maintain the property in good repair and condition.
Procedural History
Suit for eviction filed in 1968; Trial Court decreed eviction on 11th August 1976; Appellate Bench of Court of Small Causes reversed on 6th November 1987; Petitioner filed Writ Petition No.997 of 1988 under Article 227 of the Constitution; High Court allowed the petition on 19th October 2006, restoring the eviction decree.
Acts & Sections
- Transfer of Property Act, 1882: 111(g), 108(p)
- Constitution of India: 227
