Adami, J.The plaintiffs in this case sued the defendants for house rent at the rate of Rs. 100 per month with interest from January 1918 to December 1920.

2. It appears that some 11 or 12 years previous to the suit the predecessors of the plaintiffs had sued the defendants and sought to eject them from the premises which are within the Municipality of Bhagalpur. The suit was compromised and in April 1907 a decree was passed in terms of the compromise. Clauses 4, 5, 7 and 8 of the compromise included in the decree are to the following effect:

(4) That from January 1907 to December 1917 the defendants shall be entitled to occupy the premises mentioned in the plaint and pay rent at four hundred rupees par year (Rs.400 per year) payable in four instalments of Rs. 100 each from January 1907 to December 1917, and the plaintiff shall have no right to eject the defendants from the premises for that period, namely, before December 1917. The defendants will however be at liberty to vacate the said premises at any time within the said period of 11 years en giving six months notice to the plaintiff.

(5) That if the defendants want to occupy the premises after the expiry of 1917, without taking a fresh settlement, they shall have to pay rent at Rs. 100 per month.

(7) That when the defendants give up the promises, they shall be bound to restore the premises to the condition in which it was at the time it was first settled with them.

(8) That the plaintiff shall be bound to keep the premises in good repair during the period of the said 11 years.

3. After 1917 the defendants continued to occupy the premises; they did not take a fresh settlement and held over until the date of the suit.

4. The defence to the suit was that Clause (5) was a covenant for renewal and the stipulation that the defendants would have to pay Rs. 100 per month, if they wanted to occupy the premises without taking a fresh settlement, was by way of a penalty; they claimed the right to continue paying rent at the rate of Rs. 400 a year.

5. The question in the suit was whether Clause (5) was a renewal clause and whether the stipulation as to payment of rent at Rs. 100 per month was by way of penalty. The learned Subordinate Judge held that Clause (5) did not contain a covenant for renewal of the lease, but that a fresh lease with fresh terms and rent could be taken at the expiry of the term of the lease. He held that the defendants did not execute any fresh kabuliyat nor did they give notice to the appellant of their intention of doing it. He decreed the plaintiffs suit.

6. The learned District Judge came to the same opinion; he held that there was no covenant for renewal and that Clause (5) was not a penalty clause. He allowed interest only from 27th December 1920, when a notice was served on the defendants by the plaintiff.

7. Mr. Hasan Imam before us argues that Clause (5) contains a covenant for renewal and that the stipulation as to payment of a monthly rent of Rs. 100 is penal. He contends that Clause (5) means that the defendants have the right to a renewal of the lease on the same terms if they do not want to take a fresh settlement and that the stipulation as to payment of the monthly rent of Rs. 100 is intended only to force them to take a fresh settlement. At least, if his contention is that the defendants have a right to renew the lease, on the same terms if they do not want a fresh settlement, it is difficult to understand what action the penalty would be attached to unless it is a failure to take a fresh settlement. He relies on the cases of Guru Prosanna Bhattacharjee Vs. Madhusudan Chowdhury, ; Secy. of State v. A.H. Forbes (1912) 16 CLJ 217 and Lani Mia v. Mohamed Fasin Mia (1916) 20 CWN 948, with regard to the question of renewal. In my opinion, none of these three decisions altogether meets this case.

8. In the first one the real question at issue was with regard to the meaning of the words dosra bundbast, that is to say, whether they meant a second settlement on the same terms or a different settlement. The words in the lease were: "On the expiry of the term I shall take a "dosra bundbast"; the lease was in Bengali. It was held that where there is a covenant for renewal, if the option does not state the terms of the renewal, the new lease would be for the same period and on the same terms as the original lease in respect of all the essential conditions thereof except as to the covenant for renewal itself.

9. In the second case the lease provided that after the expiry of the term the lessor would have power to resettle the land with the lessee on a fair rent. It was held that the last clause was intended to be a covenant for renewal and that the Government was entitled only to alter the rent on renewal.

10. In the third case the lease contained a covenant that upon the expiry of the term the tenant would take a fresh settlement and that the landlord would grant him such settlement.

11. None of these cases, as I have said, meets the present case. It is clear from the clauses I have cited that the lessee was given three options: he could either leave the premises at the end of the term or he could take a fresh settlement, meaning thereby a settlement on fresh terms as to rent, or he could hold on at a rent which was arranged to be at the rate of Rs. 100 a month.

12. The decree and the compromise were drafted in English and the meaning of a fresh settlement is clear. It meant that the parties would meet and agree to the terms on which the lease was to be renewed. The clauses taken as a whole show that the plaintiffs were indifferent whether the defendants left at the end of the 11 years or stayed on. It was agreed that, if they did want to stay, they must either take a fresh settlement or remain on paying a rent, which the parties evidently agreed would be a fair one after the lapse of 11 years at the rate of Rs. 100 per month.

13. The case is almost exactly similar to the case of Ganpat Singh v. Jasodhar Singh (1913) 17 CLJ 590. There the kabuliyats stated that after the expiry of a term of 5 years she defendant would cease to have any right to retain possession, but in case he failed to execute a fresh kabuliyat, the landlords should have power to realize rent at Rs. 5/-per bigha on the strength of the said kabuliyats, and the defendant would have no objection to that. It was held that the plaintiffs were entitled to demand rent at the rate of Rs. 5 a bigha and the stipulation of payment of rent at that rate was not a penalty by reason of the non-execution of fresh kabuliyats. It has been sought to compare this last cited case with the case of Mir Abdul Aziz v. Karu (1913) 18 CLJ 95, but the latter is quite a different case. It was there provided that the tenant should give up the land on the expiry of the term and, if upon the expiry of the term he claimed a right of occupancy or caused a claim to be put up by any other person, he would be liable whilst holding over to pay a higher rent. It was held that the clause as regards the payment of higher rent being in the nature of a penalty was not enforceable. The penalty in that case was for the tenants action in setting up a right of occupancy and claiming to be not liable to ejectment. That case too does not affect the question of renewal but only that of penalty. In my mind it is quite clear that what the parties intended was that, if the defendants wanted to occupy the premises after the expiry of 1917, they could either take a fresh settlement or remain in occupation without a fresh settlement on a rent of Rs. 100 per month, which the parties at that time thought would be a fair rent after the lapse of 11 years.

14. With regard to the question of penalty it is hard to understand how the clause as it is framed could be construed to intend a penalty. There was no obligation on the defendants to occupy the house or to take a fresh settlement and a penalty u/s 74, Contract Act, will only follow some breach or obligation. There is no obligation in the present case. Mr. Hasan Imam has relied on the case of John Pierpoint Morgan v. Babu Ramjiram AIR 1920 Pat 97, where it was held that where a lease contains a stipulation that the lessee shall pay mesne profits at an unduly high rate on failure to give up the land, which formed the subject matter of the lease, on the expiry of the term, the Court has power to alter the rate agreed upon as being in the nature of a penalty; but in that case there was an obligation for the tenant to leave at the end of the term and the penalty was to cover any action of the raiyat in refusing to give up the land on the ground that he had an occupancy right.

15. However in the present case it has to be remembered that Clause (5) forms part of a decree, and I need only refer to the case Shirekuli Timapa, Hegda v. Mahablya (1886) 10 Bom 435. It was there held that the doctrine of penalties was not applicable to stipulations contained in decrees. In that judgment Birdwood, J., cited the following remarks made by West, J., in the case of Balprasad v. Dharnidhar Sakharam (1886) 10 Bom 437 N.. "The principles which govern the enforcement of contracts and their modification, when justice requires it, do not apply to decrees which, as they are framed, embody and express such justice as the Court is capable of conceiving and administering. The admission of a power to vary the requirements of a decree once passed would introduce uncertainty and confusion. No ones rights would, at any stage, be so established that they could be depended on, and the Courts would be over whelmed with applications for the modification on equitable principles, of orders made on a full consideration of the cases which they were meant to terminate. It is obvious that such a state of things would not be far removed from a judicial chaos; and as ordinary decrees are thus unchangeable, so we think are those in which, through a special provision for the convenience of parties their own disposals of their disputes are embodied. The doctrine of penalties is not applicable to such a class of cases; and those who, with their eyes open, have made alternative engagements and invited alternative orders of the Court must, if they fail to perform the one, perform the other however greatly severe its terms may be."

16. The defendants, therefore, cannot put forward the doctrine of penalties in the present case considering that they held their premises under the terms of the compromise embodied in the decree.

17. With regard to the question of interest which forms the subject of the cross-appeal, in my opinion the learned District Judge was quite correct in disallowing interest previous to 27th December 1920, not because the interest should be reckoned only from the date of notice but because the increase in the rent is so large that I think it is only fair that the defendants should not be called upon to pay more by way of interest.

18. I would dismiss the appeal and cross-appeal with costs. Sen, J.--I agree.