Konijeti Venkayya
v.
Thammana Peda Venkata Subbarao
(High Court Of Telangana)
Appeals No. 13 Of 1951 | 15-12-1955
( 1 ) THE facts that are common to these appeals have been stated in the judgment of my learned brother which I have had the advantage of reading and it is unnecessary for me to repeat them. Suffice it to say that the dispute in four of these appeals encircles a lease, Exhibit B-26 granted by the 1st defendant on 29th January, 194
7. The dispute in A. S. No. 642/51 relates to the truth and validity of a codicil Exhibit B-21 (a) and of a gift deed Exhibit B-41 purporting to have been executed by the 1st defendant. The general features of the case as well as the contentions of the parties and the findings of the lower Court in the suits which have given rise to these appeals, have been adverted to in the judgment of my brother. In my judgment, I propose to deal with the case of the parties in so far as it relates to the validity of the leases of the Kanaka Durga Groundnut Oil Mill, Exhibits B-2, B-
8. B-12 and B-26 the particulars of which have been set out in the judgment just now delivered.
( 2 ) ON the construction of the lease deed Exhibit B-2 dated 12th December, 1943, i am of the opinion that the two lessees, the plaintiff and his father, acquired the leasehold interest as tenants-in-common without any right of survivorship inter se. The lessor had a four annas share in the Kanaka Durga Oil Mill which she leased "for the entire lifetime" of the plaintiff and his father on annual rent of Rs. 300, besides municipal taxes for the payment of which the two lessees held themselves jointly and severally responsible. Exhibit B-2 also provided that " till the end of the lifetime " of both the lessees, the lessor had no right to enter into possession but could only collect the rent at the stipulated rate. A further clause in the lease was to the effect that during the lifetime of the lessees, they had a right to work the mill either jointly or severally at their own expense and take the profits. The municipal and other charges and taxes in respect of the property accruing during the lifetime of either of the lessees had to be paid by them. His father having died pending the suit, the plaintiff claims the entire four annas share in the leasehold interest by survivorship on the ground that Exhibit B-2 created a joint tenancy. In my opinion he plaintiffs claim is untenable.
( 3 ) THE plaintiff and his father had ceased to be members of a joint family and had become divided from each other under Exhibit B-1 dated 16th June, 194
3. In the oil Mill, the plaintiff had a four annas share and his father had an eight annas share at the time when the lease Exhibit B-2 was granted to them. They were doing business on their own account or in partnership but not as members of a joint family. With a view to keep the entire mill under their control and prevent the intrusion of strangers as lessees of a fractional share, the plaintiff and his father took a lease of the four annas share from its owner under Exhibit B-2. It was contended on behalf of the plaintiff that Exhibit B-2 represented a contractual arrangement between the lesser on the one hand and the lessees on the other hand for payment of a certain sum to the former as compensation for the exclusive occupation of common property by the latter. According to him the rights and obligations of the plaintiffs father under Exhibit B-2 ceased with his death and that the only person entitled to enforce the terms of Exhibit B-2 and liable for the discharge of the obligations thereunder, was the plaintiff himself. This argument was again stressed with reference to another portion of the case dealt later in the course of the judgment. A lease is not a mere contract but is a transfer of an interest in immoveable property, that is to say, of a right to enjoy the property for a term in consideration of a payment in money or kind by the transferee to the transferor. The leasehold interest is, like any other interest in immoveable property, capable of being inherited or transferred. Being an estate of inheritance, the interest of the lessee vests on his death, in his heirs, executors or legatees. The period of the lease need not be certain on the date of the lease itself. It is enough if it is fixed with reference to a future event which must happen and on the happening of which the lease will stand determined. The period is "certain" if it can be made certain on a future date, on the principle id certum est quod certum reddi potest. A lease for the lifetime of the lessor or lessee or of any other living person will be valid in law. The term of the lease under Exhibit B-2 is the lifetime of the plaintiff or his father, whoever survives the other. The fact that one of the lessees pre-deceased the other does not entail a cutting down of the term of the lease and in the absence of a specific provision to that effect in the lease the legal representative of the deceased lessee would be entitled to the benefit of the lease along with and during the liefime of the surviving lessee. Exhibit B-2 does not provide either for the devolution of the interest of a deceased lessee on the survivor or for its reverter to the lessor. It is no doubt true that a joint tenancy with a right of survivorship might be created by the use of appropriate words in a grant or a lease, but there is no presumption in its favour. Indeed as early as jogeswar Narain Deo v. Ram Chandra Datt, (1896) I L R. 23 Cal. 670 : L. R. 23 I. A. 37 : 6 M. L. J. 75 (P. C.), the Judicial Committee held that a joint tenancy was unknown to Hindu Law except in the case of a coparcenary between the members of a Mitakshara family and deprecated the importation of an extremely technical rule of English conveyancing into the construction of Indian documents. As pointed out in the case above cited, even according to English Law a conveyance or agreement to convey his personal interest by one of the joint tenants operates as a severance. In the present case, the plaintiff and his father separately dealt with a two annas share of the leasehold interest acquired by them under Exhibit B-2 when they granted the lease Exhibit B-12, dated 9th October, 194
6. It is unnecessary for us to consider the numerous decisions holding that the estate taken by two or more donees or legatees under a grant or a will was tenancy-in-common and not a joint tenancy. Suffice it to say that an estate taken by two brothers who had not become divided, under a grant made in their favour, was held to have been taken by them as tenants-in-common. See Mt. Bahurani v. Thakur Rajendra Baksh Singh, (1933) L. R. 60 I. A. 95 : I. L. R. 8 Luck. 121 : 64 M. L. J. 555 : A. I. R. 933 P. C. 72 (P. C.), bai Diwali v. Patel Bechardas, (1902) I. L. R. 26 Bom. 445. It is an a fortiori case where the grantees are divided members. Having regard to the terms of Exhibit B-2, I must hold that the lessees were tenants-in-common in respect of the leasehold interest and the plaintiffs, claim by survivorship to the two annas share of his father is untenable. The 4th defendant, the minor step-brother of the plaintiff, having remained undivided with his father would be a preferential heir to his fathers self-acquired property and would exclude the plaintiff, a divided son. The authorities on this point were recently reviewed in my judgment in S. A. No. 1961
( 4 ) ON the question whether there was a surrender in fact and if not, a surrender in point of law, of the leasehold interest which the plaintiff obtained from his father under the lease Exhibit B-8, I have to differ from the conclusion of the Court below. Paragraph 3 of the written statement of the 1st defendant raises the plea of surrender both as a fact and by legal implication. I shall consider each of these two heads separately.
( 5 ) THE relevant facts are these. Under his fathers settlement Exhibit B-1, dated 16th June, 1943, the plaintiff got a four annas share in the mill, the father retaining an eight annas share for himself. Under Exhibit B-2, dated 12th December, 1943 the father and son got a lease of the remaining four annas share in the mill from its owner. They were therefore in a position to lease the entire mill during the relevant period. Under Exhibits B-5 to B-7, all dated 15th October, 1945, they leased the entire mill in different parcels to Gopaluni Venkata Narsimha Rao (hereinafter referred to for the sake of brevity as Narasimharao) for a period of two years from 10th October, 1945 to 9th October, 1947, the lessee agreeing to pay an aggregate monthly rent of Rs. 1,67-4-0 for the entire property. Narasimharao had been a clerk of the family for a long time and the leases Exhibits B-5 to B-7 like the previous ones Exhibits B-3 and B-4, had been granted to him on account of a belief that the association of his name would bring good luck and good profits to the owners. Though the leases stood in the name of Narasimharao, the mill had been worked in partnership between the plaintiff, his father and two clerks Narasimharao and Jonnalagadda ramayya. This partnership for the working of the mill was closed as from 4th october, 1946 by a resolution of the partners, Exhibit B-9 dated 25th July 1046 narasimharao also surrendered the remainder of the term of his lease under Exhibits b-5 to B-7 from 4th October, 194
6. Under Exhibit B-8 dated 20th July 1046 the plaintiffs father leased to the plaintiff his eight annas share of the mill, machinery and plant for a period of 15 years commencing from 10th October, 1947 and endine with 9th October, 1962 for a yearly rent of Rs. 2,200. When Exhibit B-8 was executed, the lease in favour of Narasimharao under Exhibits B-5 to B-7 was running and would expire only on 9th October, 194
7. Hence it was provided that the term of 15 years under Exhibit B-8 was to commence from 10th October, 1947 It is no objection to the validity of the lease Exhibit B-3 that its term commenced on a future date, that is to say on the determination of the prior leases Exhibits B-5 to B-7 Objections were taken to the validity of Exhibit B-8 in the Court below. The interest of a lessor is a reversion, that is to say a future estate capable of being reduced to possession on the termination of the existing lease and such interest can be validlv transferred under section 5 of the Transfer of Property Act. The transfer would take effect on possession or the termination of the subsisting lease. The fact that the subject-matter of the lease was an eight annas share of the lessor of which physical possession could not be delivered to the lessee does not invalidate the lease The question as to what amounts to delivery of possession in any particular case will depend upon the nature of the property leased.
( 6 ) ON a surrender by the lessee, a lease of immovable property comes to an end it has to be ascertained whether there was an actual surrender or surrender in fact by the plaintiff of his leasehold right under Exhibit B-8 in favour of the lessor his father. In England it has been held that where the subject-matter of the lease is a reversion, it is "a matter, lying in grant, and not in livery, and of which therefore there could be no valid surrender in fact otherwise than by deed " Lvon v. Reed, 153 E. R. 118 at 12
6. Under section 111 (e) of the Transfer of Property Act if a lessee yields up his interest under the lease to the lessor by mutual agreement between them, there is an express surrender or surrender in fact. In India, a surrender may be oral and may be inferred from the acts and conduct of the parties there being no statutory provision like section 3 of the English Statute of Frauds that a surrender should be evidenced by a document in writing or like section 3 of 8 and 9 Vic G 106 requiring a deed for the purpose. See Elias Meyer v. Manoranjan, (1918)22 C. W. N. 441, brow Nath v. Maheswar, (1918)28 C. L. J. 220, chunder Monee Nya Busan v. Shambuchandra Chuckerbutty, (1864)W. R. (Gap. No.) C. R. 270, and Narasimha v. Lakshmana, (1889)I. L. R. 13 Mad. 124, 126, 12
7.
( 7 ) IN October, 1946, the position was that the plaintiff had a fourteen annas share of the mill of which he owned a four annas share in his own right a two annas share as lessee under Exhibit B-2 and a further eight annas share as lessee of the reversion from his father under Exhibitb-8 dated 20th July, 194
6. The leases Exhibits B-5 to B-7 in favour of Narasimharao, though terminable only on 9th October, 1947, had been agreed to be surrendered by the lessee on 4th October, 1946 itself as seen from Exhibit B-9 dated 25th July, 1941. The plaintiff entered into an agreement with two Marwari businessmen for the grant of a lease of Mill to them for a period of two years on a rental of Rs. 10,011, and took an advance of Rs. 2,100. If this lease had taken effect, the mill could not have been worked by the members of the family as before, when their own clerk was the lessee. The plaintiffs agreement to lease the mill to the Marwari merchants was made without the knowledge of his father, who, when he learnt of it, was upset by his sons conduct and was keen on getting rid of the agreement. The plaintitff who had been the recipient of his fathers bounty in an ample measure and that too quite recently under Exhibit B-10, was evidently unwilling to cross his fathers wishes and in fact co-operated with him in getting rid of the lease agreement with the Marwaris. Exhibits B-56 dated 2nd october, 1946 and B-75 dated 4th October, 1946 are the lawyers notices exchanged between the plaintiffs father and the Marwari lessees. In Exhibit B-75 given on behalf of the father, it was asserted that he had a ten annas share in the mill while the plaintiff had only a six annas share and that therefore the father was not bound by the agreement entered into by his son. As P. W. 1 the plaintiff stated that he gave a notice to the Marwari lessees before 9th October, 1946 " in order to defeat that transaction", meaning thereby the agrement to lease to the Marwaris. Neither the original nor a copy of the notice sent by the plaintiff has been filed but apparently it was on the same lines as Exhibit B-75, though the plaintiff sought to disclaim personal responsibility for it by saying that "suryanarayana got a reply drafted and obtained my signature on it. " this Suryanarayana was a trusted clerk of the father and the son, and was in the pay of both at the time and carrying out their instructions.
( 8 ) IN order to counteract the claim of the Marwari merchants under the plaintiffs agreement for lease, further steps were taken by the plaintiff and his father. Under Exhibit B-12 dated 9th October, 1946, the father and son granted a lease of the mill for a period of two years from 9th October, 1946 to 9th October, 1948 to the 2nd defendant on an yearly rental of Rs. 12, 250, the lessee also undertaking to pay the municipal taxes. According to the recitals in Exhibit B-12, out of the rent payable for the first year of the lease, a sum of Rs. 7,656-4-0 was paid in advance to the father "in respect of the ten annas share" belonging to him and a sum of rs. 4,593-12-0 was paid in advance to the plaintiff "in respect of his six annas share. " Separate receipts were passed by the father and son for the respective amounts paid to them. Out of the rent for the second year payable in advance on 10th October, 1947, it was stipulated in Exhibit B-12, that a sum of Rs. 7,656-4-0 was to be paid to the father and a sum of Rs. 4,593-12-0 was to be paid to the plaintiff, evidently on the same basis as for the first year. Exhibit B-12 also provided that possession of the buildings, machinery and plant should on the expiry of the term be delivered to the plaintiff and his father (the lessors) in proper order. Though there was a lease of the mill only to the 2nd defendant under exhibit B-12, the plaintiff, his father and some of their clerks and relations entered into a partnership with the lessee for the working of the mill and in this partnership as seen from Exhibit B-55 dated 10th October, 1946, the plaintiffs father had 0-2-6 share and the plaintiff, a two annas share.
( 9 ) ON 9th October, 1946, the date of the lease Exhibit B-12, credit entries were made in the day book of the father in favour of the plaintiff of two sums of Rs. 6,585 and 5,4
50. The recital in the day book Exhibit B-76 with reference to Rs. 6,585, is as follows :-"for the ten annas share of Rs. 10,000 the amount expended by you on the foundry in the kanaka Durga Mill which I have agreed to bear. . . . Rs. 6,585 ". With regard to the credit of Rs. 5,450, the entry in the account runs thus : "amount agreed to be paid to you free. " corresponding debit entries against the father and credit entries in favour of the plaintiff were made in the books of the latter. It is the case of both the parties that the sum of Rs. 5,450 was paid not gratuitously as recited in Exhibit B-76 but as a compensation for an injury or a detriment suffered by the plaintiff. It is the case of the father that in consideration of the plaintiff surrendering his rights under Exhibit b-8 and agreeing to his father leasing out his ten annas share of the mill under Exhiit b-12, that the payment of Rs. 6,585 and Rs. 5,450 were made to the plaintiff. It is the case of the plaintiff that the sum of Rs. 6,585 was paid as consideration for the father acquiring a ten annas share in the foundry erected by the plaintiff at his cost and that the sum of Rs. 5,450 was paid to him in consideration of his giving up his rights under the lease Exhibit B-8 for the year 1947-48 alone out of the period of 15 years covered by that lease. I have to decide which of these two versions is the correct one. His Lordship then discussed the evidence.
( 10 ) IN my opinion, the evidence of the plaintiff is interested and unreliable and the defendants case is supported by D. W. 1 and also by the circumstances to which reference has already been made. I would therefore hold that there was an express surrender by which the plaintiff yielded up his interest under Exhibit B-8 to his father by mutual agreement between them and Exhibit B-12 was executed by both of them thereafter.
( 11 ) SRI Rangachari for the plaintiff contended that as between co-owners there cannot be a conveyance but only a release of his interest by one co-owner to another and that the effect of Exhibit B-8 was not to create the relationship of lessor and lessee between the plaintiff and his father. Exhibit B-8, though styled a lease, was merely a contract between the plaintiff and his father whereby the former agreed to pay a money compensation to the latter for occupying and enjoying the whole of the property held in common by them. The doctrine of surrender applicable as between lessor and lessee properly so called had no application to an agrement between co-sharers regulating the enjoyment of their common property. As between co-sharers each is in possession of the common property in whole and in part and not of the whole of any part and there cannot therefore be any transfer of possession of the property by one co-sharer to another either by means of a lease or by a surrender of the lease. A surrender necessarily involves the giving up of possession by the lessee to the lessor and the presumption of exclusive possession by the latter. As the possession of one co-owner is presumed to be on behalf of the entire body of co-owners there cannot be a surrender of possession of his share by one co-owner to the others. The rights of the plaintiff under Exhibit B-8 are merely those of a co-owner in possession of common property under an arrangement with the co-owner (his father) and this contractual arrangement subsists except to the extent it has been modified or varied by the later contract Exhibit B-12, so ran the argument of the learned counsel.
( 12 ) RELIANCE was placed on a recent decision of a Full Bench of the Madras High court in Board of Revenue v. Murugesa Mudaliar, (1955)2 M. L. J. 166: I. LR. 1955 Mad. 1133 (F. B.), where it was held that a document by which one co-owner purported to abandon or relinquish his claim to the share to which he would be entitled in common property was in the nature of a release liable to be stamped under Article 44 of the Stamp Act and not a conveyance liable to duty under Article 19 of Schedule 1-A of the Act. The particular observation relied upon by Sri Rangachari was as follows :-"each co-owner in theory is entitled to enjoy the entire property in part and in whole. It is not therefore necessary for one of the co-owners to convey his interest to the other co-owner. It is sufficient if he releases his interest. The result of such release would be the enlargement of the share of the other co-owner. There can be no release by one person in favour of another, who is not already entitled to the property as a co-owner. "i fail to see the relevance of this citation. The Court did not purport to lay down that there could not be a conveyance or transfer of the interest of one co-owner to another. Another decision relied upon Subha Lal v. Fateh Muhammad, (1932) I. L. R. 54 All. 628, is only an authority for the position that an owner of an undivided share can be rightly in possession of the whole, that there can be no adverse possession by one co-owner unless there has been a denial of title and ouster to the knowledge of the other co-owners, and that the same principle would apply to the case of a transferee from a co-owner who professedly has taken a transfer of the whole property from him. The fact that common property has not been divided by metes and bounds and allotted in severally to the co-sharers does not stand in the way of the interest of one co-sharer being conveyed to a stranger or another co-sharer. The interest of a co-sharer in common property can be sold, mortgaged or leased to another co-sharer or to a stranger. Sections 7, 8 and 44 of the Transfer of Property Act recognise the validity of such transfers. It is not the law that one co-sharer can only release his interest in favour of the other co-sharers. There can be a conveyance of the interest of one co-sharer to another co-sharer or to all the remaining co-sharers with the statutory and other covenants applicable to such conveyance. Section 44 of the Transfer of Property Act provides that a transferee from a co-owner of his share of the property or any interest therein acquires, as to such share or interest, and so far as it is necessary to give effect to the transfer, the transferors right to joint possession or other common or part enjoyment of the property and to enforce a partition of the same. A lessee from a co-sharer is entitled to the rights of his lessor and can even enforce a partition if it is necessary to give effect to his lease. The sole ground on which partition may be allowed or refused is the ground of convenience, Rajani Mohan v. Shambunath, (1929) I. L. R. 57 Cal. 715, bhagwat Sahai v. Bipin Behari, (1910) I. L. R. 37 Cal. 918 : L. R. 37 I. A. 198 : 20 M. L. J. 907 (P. C. ). If as I hold, there can be a valid lease of his interest by a co-sharer in favour of another co-sharer, it is open to the lessee to surrender his interest in the lease to his lessor under section 111 (e) of the Transfer of Property Act. On such surrender the lease would stand terminated. In this case, there was such a surrender by the plaintiff of his leasehold interest under Exhibit B-8 before Exhibit B-12 was executed.
( 13 ) IT was also contended for the appellant that by reason of Exhibit B-12 by which both the plaintiff and his father leased the mill to the 2nd defendant, there was an implied surrender of the plaintiffs leasehold intefest under Exhibit B-
8. The respondent relied on the observations of Ramesam, J. , in Manavadan Thirumalapad v. Parry and Co. , (1925) I. L. R. 48 Mad. 815, 820 : 49 M. L. J. 390, deprecating the importation of the English doctrine relating to surrender by operation of law into India. Implied surender is, however, recognised and provided for by section 111, clause (f) of the Transfer of Property Act and the illustration thereto, which refers to a lessee accepting from his lessor a new lease of the property leased, to take effect during the continuance of an existing lease. The illustration is obviously not exhaustive of cases of implied surrender. The principle of implied surrender or surrender by operation of Law was thus enunciated by Parke, b. in Lyon v. Reed, 153 E. R. 118, 127 :"this term is applied to cases where the owner of a particular estate has been a party to some act, the validity of which he is, bv law, afterwards estopped from disputing, and which would not be valid if his particular estate had continued to exist There the law treats the doing of such act as amounting to a surrender. . . All the old cases will be found to depend on the principle to which we have adverted, viz. , an act done by or to the owner of a particular estate, the validity of which he is estopped from disputing and which could not have been one if the particular estate continued to exist. The law there says, that the act itself amounts to a surrender. In such case it will be observed there can be no question of intention. The surrender is not the result of intention. It takes place independently, and even in spite of intention. "
( 14 ) ACCORDING to English decisions, a fresh lease accepted by a lessee during the continuance of a prior lease operates as a surrender of the original lease because by accepting the new lease, the lessee is a party to an act the validity of which he is, by law, afterwards estopped from disputing and which would not be valid if the first lease continued to exist and the lessor was not in a position to put the lessee in possession at the date of the new lease. The law attributed the force of estoppel to certain acts of notoriety such as livery of seisin, entry, acceptance of an estate see Parke B. in Lyon v. Reed,153 E. R. 118, 127, and Chitty, J. , in Wallis v. Hands, L. R. (1893) 2 Ch. 75 at 79 and
82. The grant of a new lease to a stranger with the tenants assent and change of possession at about the time of the new lease, were held to bring the case within the scope of the doctrine of implied surrender. The insistence on delivery of possession by the old lessee and the assumption that the lessor was in possession at the date of the new lease and delivered possession under the new lease was due to the fact that, in England, it was for a long time considered necessary that a lessor should be in possession of the land intended to be leased. It was therefore decided by the English Courts that where a lessee assented to a lease being granted to another and also gave up possession to the new lessee there was a surrender by operation of law. Davison v. Gent, 1 H. and N. 744, Wallis v. Hands. This requirement of the English common law that the lessor should have been in possession and given possession to the lessee at the time of the lease was dispensed with by section 4 (2) of the Law of Property Act, 1925, but it influenced the course of decision in England. Another consideration which weighed with the english Courts in holding that an assent by the tenant to the new lease would not amount to a surrender by operation of law without actual delivery of possession to the new tenant was adverted to by Chitty, J. , in Wallis v. Hands, in these terms :"to hold that mere oral assent to new lease operates as a surrender in law would be a most dangerous doctrine ; it would practically amount to a repeal of the Statute of frauds and would let in all the mischief against which the statute intended to guard; the policy of that statute is carried still further by the Statute 8 and 9 Vic. C. 106, section 3 which requires a deed in cases where formerly a mere writing would have sufficed. "
( 15 ) UNDER section 107 of the Transfer of Property Act, a lease for any term can be made by a registered instrument and delivery of possession is not essential to its validity. Under the law of India, an oral surrender of a leasehold interest is valid. In India, if a landlord and tenant by mututal agreement do any act or enter into any transaction which is inconsistent with the continuance of the existing lease or tenancy, there would be an implied surrender. This is merely an application of the general principle of law that in respect of the same subject-matter parties cannot stand to each other in two inconsistent and imcompatible relationships. If the later transaction can come into effect only on the termination of the earlier, the earlier transaction is deemed or assumed to have been terminated in order to enable the later to operate according to its tenor. Even in England the principle of implied surrender or surrender by operation of law is not confined to cases of renewal of a lease in favour of a lessee before the expiry of the term of a subsisting lease. In woodfall on Landlord and Tenant, 25th Edition, page 966, the law is stated as follows :-"the term surrender by operation of law or implied surrender is the expression used to describe all those cases where the law implies a surrender from unequivocal conduct of both parties which is inconsistent with the continuance of the existing tenancy. Thus it is properly applied to cases where the owner of a particular estate has been party to some act having some other object than that of a surrender, but which object cannot be effected whilst the particular estate continues and the validity of which act he is by law estopped from disputing. Such surrender is the act of the law, and takes place independently of, and even in spite of the intention of the parties. It is presumed to have preceded the act to which the tenant is a party. "
( 16 ) THE doctrine of implied surrender has been applied in England to cases where the lessor grants a new lease to a third person with the assent of the tenant under an existing lease who delivers up possession to such person. Exhibits B-8 and B-12 are incompatible and inconsistent with each other and cannot stand together. Under Exhibit B-8, the plaintiff is a lessee of an eight annas share of the mill for a period of 15 years with a liability to pay an annual rent of rs. 2,200 to the lessor, his father. Under Exhibit B-12, the plaintiffs father is entitled to recover an annual rent of Rs. 7656-4-0 for his ten annas share from the new lessee, the 2nd defendant. In respect of an eight annas share, the rent payable to the father would be Rs. 6125. By the joint act of the plaintiff and his father, a new tenant was let in and the father was recognised as being entitled to a ten annas share of the increased rent which the new tenant undertook to pay. The property was put in the possession of the new tenant, the rent was increased ; the lessor and lessee under Exhibit B-8 became joint lessors under Exhibit B-12, and the previous relationship was determined. After the execution of Exhibit B-12 the plaintiff was no longer bound to pay his father any rent under Exhibit B-8 or perform the other covenants contained therein and the father could not enforce the terms of Exhibit b-8 against the plaintiff. Under Exhibit B-12 the plaintiffs rights under Exhibit B-8 ceased, the status quo ante was restored and the plaintiff agreed to his father leasing out his ten annas share which he would have no right to do if Exhibit B-8 subsisted at the time of Exhibit B-
12. If Exhibit B-8 were in force, the plaintiff should have leased for 1947-1948 a fourteen annas share under Exhibit B-12 inclusive of the eight annas share of his father leased to him under Exhibit B-
8. He should also have been entitled to a fourteen annas share of the rent. The basis of exhibit B-12 is therefore inconsistent with the survival of Exhibit B-
8. It was argued for the respondent that even if Exhibits B-8 and B-12 were inconsistent or incompatible, the operation of Exhibit B-8 would remain suspended only during 1947-1948 at the end of which the term of Exhibit B-12 would expire and that Exhibit B-8 would continue to be in force from 1948-1949 onwards till 1962-1963 according to its tenor. Reliance was placed on the following observations of Ramesam J. , in Manavadan Thirumalapad v. Parry and Co. , (1925) 49 M. L. J. 390 : I. L. R. 48 Mad. 815, 819:"even where the leases are of the same kind, they are overlapping and the terms of the second are somewhat inconsistent with the terms of the first, all that is necessary to imply is a cancellation of the first, only for the period which is overlapped by the second. In the present case even assuming that the mining lease is not totally consistent with coffee plantation, it seems to me that all the necessary implication is a cancellation of the first lease for a period of 36 years and no more. "
( 17 ) THIS observation of the learned Judge was obiter and was not necessary for the decision of the case. In that case Spencer, J. , was of the opinion that there was no incompatibility or inconsistency between the two leases, the earlier one being a lease for agricultural purposes and the later a mining lease. In other words, the subject-matter of the two leases was different and the two leases could be enjoyed simultaneously by the lessee. A surrender by operation of law determines the lease and involves an extinction of the rights of the lessee in respect of the properties surrendered as from the date of the surrender. On a surrender, the estate vesta immediately in the lessor and it is not possible, therefore, to hold that Exhibit B-12 operated to supersede the earlier lease Exhibit B-8 only for the year 1947-1948.
( 18 ) IN Woodfall on Landlord and Tenant, 25th Edition, page 969 the law is thus stated :"if a lessee for years accepts a new lease by indenture of part of the lands, it is a surrender for that part only and not for the whole, and though a contract for years cannot be so divided, as to be avoided for part of the years and to subsist for the residue, either by act of the party or act in law, yet the land itself may be divided, and the tenant may surrender one or two acres, either expressly or by act of law, and the lease for the residue will stand good and untouched. "i am unable to verify the reference cited in support of this proposition but I accept it as laying down the principle of law correctly. It has been held in England that even though the new lease is for a shorter term than the residue of the old term, there would be an implied surrender if a lessee takes a new lease from the lessor to continue during the term of the old lease: Dodd v. Acklom, (1843) 6 Man and G. 672, 67
9. For these reasons, I am of the opinion that the plaintiffs father was entitled to a ten annas share of the oil mill in spite of the lease Exhibit B-8, which, in my opinion was validly surrendered to him when Exhibit B-12 was granted to the 2nd defendant. It follows that Exhibit B-26, dated 29th January, 1947, was a valid lease of the ten annas share of the plaintiffs father.
( 19 ) THE lessee under Exhibit B-12 raised a defence that even after the expiry of the term of the lease he was entitled to continue in possession of the Kanaka Durga groundnut Oil Mill under the Provisions of the Madras Buildings (Lease and Rent control) Act. Though -the plea was raised in the Court below, no arguments on this point were addressed and the lower Court has therefore held that this plea must, be taken to have been abandoned by the lessees. The contention was repeated at the hearing of the appeal before us and since it raised a question of law, we felt bound to hear the arguments advanced on behalf of the lessee. The question is whether a lease of an oil mill consisting of buildings, machinery and plant used and intended to be used for the purpose of manufacturing oil is governed by the provisions of the Madras Buildings (Lease and Rent Control) Act, 1949, and whether the tenant is protected from eviction under section 7 of that Act. In section 2 of the Act building has been defined so as to include gardens, grounds and outhouses appurtenant to the building and any furniture supplied by the landlord for use in such building. The case before us is not a lease of a mere building or of a building with compound and furniture of the sort covered by the definition. The lease is, of the Kanaka Durga Groundnut Oil Mill comprising the site, the buildings thereon and the machinery and plant of considerable value installed in the building, all being required and used for the purpose of manufacturing oil out of groundnuts and other oil seeds. The property leased is really a factory and the terms and conditions of the lease Exhibit B-12 shows that the machinery and the oil expellers were considered to be important components of the property leased. The rent payable under Exhibit B-12 is a consolidated rent of Rs. 12,250 per annum for the entire factory as such without being split up into separate portions payable as rent for the ground and buildings and for the hire of machinery and plant. In cases of this kind, it is not possible to separate the lease of the building from the lease of the machinery and plant and both of them form a composite unit worked as a factory.
( 20 ) IT cannot be said that the lessees would be entitled to remain on the land and building but could not have possession of the machinery, plant, etc. , by invoking the application of Madras Act XXV of 194
9. To split up a composite lease such as Exhibit B-12 into separate contracts of lease of the buildings and hire of the machinery would be to destroy the lease altogether and frustrate its object. The mere fact that a factory consists of land and buildings where the machinery and plant are housed which cannot be installed or worked except in a building, does not make it a non-residential building within the meaning of section 2 of the madras Act XXV of 194
9. The learned advocate for the lessee referred to a decision of the Madras High Court in J. H. Irani v. Chidambaram Chettiar, (1952)2 M. L. J, 221, for the position that where the subject-matter of a lease consisted of a site and a cinema building erected thereon together with certain small sheds at one end of the premises and the vacant space within the compound, the provisions of the Madras buildings (Lease and Rent Control) Act would be attracted. The definition of building in section 2, clause i of the Act is not very helpful because a building is defined in terms of a building. The question is what is meant by a building within the meaning of the Act. There is an immense variety of structures which could be styled buildings and we are unable to accede to the proposition that every enclosure of brick, stone work or mud walls covered in by a roof irrespective of the purpose for which it is used and let, is a building within the meaning of the Act. So to construe the Act would bring within its operation all factories and mills which are invariably located in buildings. The question in each case would be what is the dominent part of the demise and what is the purpose for which the building was constructed and let out. Our attention has been drawn to a recent decision of this court in A. S. Nos. 323 and 743 of 1949 where Chandra Reddi and Umamaheswaram, JJ. , held that where the lease was not merely of the building and its furniture but of the cinema theatre with all the equipment necessary for the exhibition of films, the provisions of the Madras Buildings (Lease and Rent Control) Act had no application. To the same effect is the judgment of a Bench of the Madras High court in Raja Chetty v. Jagannathadas Govindas, (1949) 2 M. L. J. 694, which, however, has not been referred to in the judgment in J. H. Irani v. Chidambaram Chettiar, (1952) 2 M. L. J. 221. Evidently, the learned Judges in J. H. Irani v. Chidambaram Chettiai proceeded on the basis that what was let out in that case was only the structure fit for cinema Exhibition. Here we have a lease of a running factory comprising costly machinery intended to be used for the manufacture of oil. In our opinion, the provisions of the Madras buildings (Lease and Rent Control) Act do not govern the rights of the parties under the lease, Exhibit B-12.
( 21 ) I agree with the decretal portion of the judgment of my learned brother and with his direction as regards costs payable in these appeals. Krishna Rao, J.-These appeals arise out of four suits which were tried together and disposed of in a common judgment by the Subordinate Judge of Vijayawada. The dispute in three of the suits, O. S. Nos. 134/47, 208/48 and 204/49, centred round the validity of a lease granted by one Tammana Narayanamurthi on 29th january, 1947, about 15 months prior to his death on 30th April, 194
8. In the remaining suit, O. S. No. 75/49, the dispute related to the validity of a codicil dated 15th January, 1947 and a gift deed dated 17th July, 1947, executed by the said narayanamurthi. Narayanamurthi owned an eight annas share, his divided eldest son Peda Venkata Subba Rao owned a four annas share and his second sons widow venkatalakshminarasamma owned the remaining four annas share in the Kanaka durga Groundnut Oil Mill at Vijayawada. Venkatalakshminarasamma leased out her four annas share on 12th December, 1943, to the other two co-sharers for their joint lives, with the result that Narayanamurthi held a ten annas share and Peda Venkata Subba Rao held a six annas share in the Mill. Under a registered deed Exhibit B-8 dated 20th July, 1946, Narayanamurthi leased his eight annas share in the Mill to Peda Venkata Subba Rao for a period of 15 years from 10th October, 1947 to 9th October, 1962. Some time later, under a registered deed exhibit B-12 dated gth October, 1946, both Narayanamurthi and Peda Venkata subba Rao jointly leased the entire mill to Konijeti Venkayya for a period of two years from 10th October, 1946 to 9th October, 194
8. Under a subsequent registered deed Exhibit B-26 dated 29th January, 1947, Narayanamurthi made a further encroachment into the term of Exhibit B-8 and leased his ten annas share in the mill to Konijeti Venkayya and Gurram Venkataswami for a period of two years from 10th October, 1948 to 9th October, 19
50.
( 22 ) PEDA Venkata Subba Rao instituted the first suit O. S. No. 134 of 1947 on 6th august, 1947, for a declaration that the lease deed Exhibit B-26 is not valid and binding upon him. His case was that on gth October, 1946, when he took possession of the Mill cancelling a prior lease to a third party, Narayanamurthi obtained an agreement from him confirming the lease under Exhibit B-8, that Narayanamurthi fell ill with blood pressure in July, 1946 and was mentally deranged from january, 1947, that Exhibit B-26 said to have been executed by Narayanamurthi came into existence while he was in this condition, and that Narayanamurthi was not entitled to lease out his ten annas share for the period from 10th October, 1948 to 9th October, 1950 as he had already leased an eight annas share to the plaintiff under Exhibit B-8 for the period from 10th October, 1947 to 9th October, 1962. After Narayanamurthi died during the pendency of the suit, the plaintiff took an additional plea that Narayanamurthis two annas share under the lease of 12th december, 1943, passed to him and that he became exclusively entitled to the entire rights under that lease. The 1st defendant in the suit was Narayanamurthi, defendants 2 and 3 were the lessees Konijeti Venkayya and Gurram Venkataswami respectively, and the 4th defendant was Krishnamurthi Narayanamurthis minor undivided son by his second wife Lakshmikanthamma impleaded as his legal representative. Defendants 1 and 2 contended that no agreement confirming Exhibit b-8 was obtained from the plaintiff on 9th October, 1946, as alleged by him and that on the other hand, the plaintiff surrendered on 9th October, 1946, the lease under exhibit B-8 in accordance with an arrangement by which the 1st defendant contributed rs. 6,585 for a ten annas share in the expenses of a foundry installed by the plaintiff in the Mill and paid the plaintiff an additional sum of Rs. 5,4
50. It was in pursuance of this arrangement that the plaintiff and the 1st defendant jointly leased the Mill to the 2nd defendant on the same date under Exhibit B-12 for a period of two years expiring on 9th October, 194
8. Although the 1st defendant fell ill, he was in a sound and disposing state of mind and duly executed Exhibit b-26 to the knowledge of the plaintiff. Even assuming that the lease of the 1st defendants eight annas share under Exhibit B-8 remained in force, the plaintiff was not entitled to question Exhibit B-26 so far as it related to the 1st defendants remaining two annas share and this share devolved on the 4th defendant upon the ist defendants death. Defendants 2 and 3 raised a further contention that the lease to the plaintiff under Exhibit B-8 was nominal. This contention was negatived by the learned Subordinate Judge and needs no further consideration as it was not put forward or relied upon at the hearing before us. As observed by the learned subordinate Judge in paragraph 37 of his judgment the only basis for the contention was that Exhibit B-8 was not mentioned in Exhibit B-12 and this omission has no probative force and there is the positive evidence of D. Ws. 1 and 4 supporting that of the plaintiff that Exhibit B-8 was intended to be operative and not nominal. The second suit O. S. No. 208 of 1948 was brought on 29th November, 1948 by Konijeti Venkayya and Gurram Venkataswami, the two lessees under Exhibit b-26 for a permanent injunction restraining Peda Venkata Subba Rao from disturbing their possession of the Oil Mill factory. Their case was that the 1st plaintiff konijeti Venkayya did not surrender possession of the factory when the lease to him under Exhibit B-12 expired on 9th October, 1948, that he was entitled to continue in possession under the provisions of the Madras Buildings (Lease and rent Control) Act, 1948, that both the plaintiffs had obtained a fresh lease under exhibit B-26 of Narayanamurthis five-eighths share and that the defendant Peda venkata Subba Rao, who was entitled to only a remaining three-eighths share was trying to forcibly dispossess them. The defendant raised the same contentions as in his suit O. S. No. 134 of 1947 attacking Exhibit B-26 and alleged that the possession of the factory on the expiry of Exhibit B-12 was vested in him as part owner and lessee of the factory.
( 23 ) THE third suit O. S. No. 204/49 was filed on 7th November, 1949, by Krishnamurthi through his guardian and mother Lakshmikanthamma to recover from the lessees Konijeti Venkayya and Gurram Venkataswami the rent which became due from them on 10th October, 1948 and 10th October, 1949, under the terms of Exhibit b-2
6. These lessees defendants 1 and 2, admitted their liability to pay the rent and pleaded that they were not liable for interest or costs, as they were unable to pay it on account of the proceedings in O. S. No. 134 of 194
7. Peda Venkata Subba rao was impleaded as the 3rd defendant in the suit on the ground that he was seeking to set aside Exhibit B-26 and claiming exclusive possession of the factory. He raised the same contentions as in O. S. No. 134 of 1947, namely, that he did not surrender the lease to him under Exhibit B-8, that he became entitled to Narayanamurthis two annas share under the lease of 12th December, 1943 on Narayanamurthis death and that Exhibit B-26 is not valid.
( 24 ) O. S. No. 75 of 1949 was instituted by Peda Venkata Subba Rao on 26th March, 1949, against Krishnamurthi and his mother Lakshmikanthamma to recover possession of about 920 acres of land belonging to deceased Narayanamurthis estate in Pondugala Agraharam. He based his claim on a registered will Exhibit B-10 made by Narayanamurthi on 29th July, 1946, which provided among other things that the property should pass to him after the testators death. His case was that the testators registered codicil Exhibit B-21 (a) dated 15th January, 1947, by which the provisions of the will were modified, and subsequent registered dakhal deed Exhibit B-41 dated 17th July, 1947, by which Narayanamurthi gifted the properties to Lakshmikanthamma, were not genuine and valid as the testator was of unsound mind throughout from 9th January, 1947, until his death on 30th April, 194
8. Defendants 1 and 2, Krishnamurthi and Lakshmikanthamma, contended that Narayanamurthi executed Exhibit, B-21 (a) and B-41 while in a sound and disposing state of mind and that the plaintiff was therefore not entitled to the properties. Besides the plaintiff, there were two other executors appointed under the will, namely Godavarthi Purushotham and Kurmala Sesharao. These impleaded as supplemental defendants 3 and 4, supported the case of defendants i and 2.
( 25 ) THE main contesting parties in all the suits were Peda Venkata Subba Rao, the plaintiff in O. S. No. 134 of 1947, and deceased Narayanamurthi, Konijeti Venkayya, gurram Venkataswami and minor Krishnamurthi represented by his mother lakshmikanthamma defendants 1 to 4 respectively in that suit. They will be referred to hereafter with reference to their array in O. S. No. 134 of 1947 and the other parties will be referred to by their names.
( 26 ) THE learned Subordinate Judge found that the plaintiff did not surrender the lease granted to him under Exhibit B-8 that the agreement of 9th October, 1946, set up by the plaintiff confirming Exhibit B-8 is true and that Narayanamurthis two annas share in the Mill under the lease of 12th December, 1943, devolved on krishnamurthi and not on the plaintiff. On this basis, he held that the lease under exhibit B-26 of Narayanamurthis ten annas share was not valid to the extent of an eight annas share and was valid only to the extent of a two annas share. With regard to the plaintiffs contention that Narayanamurthi executed Exhibit B-26 while of unsound mind, he held that as Exhibit B-26 was valid only to the extent of a two annas share which devolved on the 4th defendant and as the 4th defendant did not attack Exhibit B-26 it was unnecessary to go into the contention. Defendants 2 and 3 did not show that the lease under Exhibit B-12 was governed by the provisions of the Madras Buildings (Lease and Rent Control) Act nor were any arguments addressed in that behalf and this contention of theirs was negatived as having been abandoned. The learned Subordinate Judge further held that they were not entitled to an injunction against the plaintiff, as the latter was a co-owner who could not be excluded from possession. As a result of these findings, O. S. No. 134 of 1947 was decreed, declaring that the lease deed Exhibit B-26 was invalid and not binding on the plaintiff to an extent of an eight annas share. O. S. No. 208/48 was dismissed and O. S. No. 204/49 was decreed against defendants 2 and 3 in favour of the 4th defendant for a sum of Rs. 2,500 being the two annas share of the rent due to him.
( 27 ) AGAINST the decision in O. S. Nc. 134 of 1947, defendants 2 and 3 have preferred the appeal, Appeal No. 13 of 1951 and the 4th defendant has preferred the appeal, appeal No. 14 of 1951. They contend that Exhibit B-26 is valid and binding on the plaintiff as he expressly surrendered on gth October, 1946, the lease under exhibit B-8 and even otherwise his joining in Exhibit B-12 operated as an implied surrender. They submit that the agreement set up by the plaintiff confirming exhibit B-8 is not true and that an alleged copy of the agreement Exhibit A-3 filed by him to prove it is a false document inadmissible in evidence. The plaintiff has filed a memorandum of cross-objections in Appeal No. 14 of 1951 reiterating his contentions that Exhibit B-26 was vitiated by the 1st defendants unsoundness of mind and that he became entitled to the 1st defendants two annas share under the lease of 12th December, 1943, upon the 1st defendants death and claiming half the costs of suit disallowed to him by the lower Court. Defendants 2 and 3 have preferred the appeal, Appeal No. 55 of 1952 from the dismissal of their suit O. S. No. 208/48 and the 4th defendant has preferred the appeal, Appeal No. 97 of 1951 claiming the rent due for an eight annas share which was not decreed to him in O. S. No. 204 of 194
9.
( 28 ) IN O. S. No. 75 of 1949, the learned Subordinate Judge found that the 1st defendant narayanamurthi was not of sound mind at the time of the execution of the codicil Exhibit B-21 (a) and of the gift deed Exhibit B-41 and that these documents did not affect the plaintiffs right under the will Exhibit B-
10. He also found that even if the codicil were upheld, the plaintiff would be entitled to the alternative relief claimed by him under the terms thereof, declaring his right to take possession of the suit properties with absolute rights immediately after the 4th defendant attained majority. He decreed the suit in favour of the plaintiff for the main relief of possession together with mesne profits from 30th April, 194
8. Against this decision, lakshmikanthamma, the and defendant in the suit, has preferred the appeal, appeal No. 642 of 1951 on the ground that Narayanamurthi was of sound mind and had testamentary capacity when he executed Exhibits B-21 (a) and B-41. In order to appreciate the contentions of the parties it is necessary to set out some of the facts which are not now in dispute. The 1st defendant Narayanamurthi was a leading Vysya merchant at Vijayawada and acquired extensive properties by his own labour and industry. He had a daughter and two sons by his first wife. The first son was the plaintiff born in or about 1916, and the second son was Venkata subba Rao born about a year later. The first wife died when the younger son was less than six months old and the sons were brought up by Lakshmikanthamma whom narayanamurthi married as his second wife at the time. Lakshmikanthamma gave birth to the 4th defendant in 1942. The two elder sons, who had got married, desired to live separately from the father. Accordingly they entered into a family settlement deed Exhibit B-1 on 16th June, 1943, by which the 1st defendant gave properties valued in the document at Rs. 34,375 to the plaintiff and the properties valued at Rs. 33, 875 to the second son Venkata Subba Rao. The deed recites that all the properties were the fathers self-acquisitions in which the sons had no right, and this fact is not disputed. It further recites that none of the parties had any right to ask for a change or reconsideration of the arrangement and settlement and that the two sons had absolute rights in respect of the properties settled on them. Even after Exhibit B-1, the plaintiff continued to live in the same house as the 1st defendant, though in a separate portion, and the two were having a joint mess until April, 194
7. The second son Venkata Subba Rao died on 12th November, 1943, bequeathing his properties by a will to his wife Venkatalakshminarsamma. One of the properties belonging to them was the Kanaka Durga Groundnut oil Mill at Vijayawada. Under Exhibit B-1, the 1st defendant gave a four annas share in the Mill to each of the two sons who became divided and retained an eight annas share for himself. After the second son died, the four annas share which devolved on his widow Venkatalakshminarasamma was taken on lease by the 1st defendant and by the plaintiff under the registered deed Exhibit B-2 dated 12th december, 194
3. The period of the lease was from 10th October, 1944, for the entire life-time of the two lessees and the annual rent stipulated was Rs. 300 in addition to the municipal tax. It is common ground that the 1st defendant and the plaintiff were equally entitled to the benefit of the lease and that each of them was paying a one half of the stipulated rent to Venkatalakshminarasamma. But it is contended on behalf of the plaintiff that under the terms of Exhibit B-2, he became entitled, on the 1st defendants death, to the two annas share demised to the 1st defendant. The practice of the 1st defendant and his sons was to lease out the Mill and run it in partnership with the lessees. In 1936-1938 it was leased out to one Javaji lakshminarayana for a rent of Rs. 5,000 per year. Only in 1938-1940, it was run without being leased to others and there was loss during this period. Thereafter it was being leased out for successive periods to a clerk Gopaluni Narasimharao. The plaintiff began to work in the Mill from 1936 and was the managing partner since 1940. The 1st defendant was the financing partner. The last lease to gopaluni Narasimharao was under Exhibits B-5, B-6 and B-7 dated 15th October, 1945, for the period from 10th October, 1945 to 9th October, 194
7. Before this lease expired, by a resolution Exhibit B-9 dated 25th July, 1946 of the partnership, it was decided to dissolve the firm and surrender the lease with effect from 4th October, 194
6. Meanwhile under a registered deed Exhibit B-8 dated 20th July, 1946, the 1st defendant leased the eight annas share owned by him to the plaintiff for a period of 15 years from 10th October, 1947 to 9th October, 1962. The stipulated annual rent was Rs. 2,200 in additional to municipal tax and insurance premium and was payable on the 10th of October, every year with interest at 6 per cent, in the event of default. The deed contained a detailed description of the Mill and its equipment and elaborate provisions for ensuring the surrender of the property in tact on the expiry of the lease.
( 29 ) ON 29th July, 1946, the 1st defendant executed a will Exhibit B-10 bequeathing all his undisposed of properties to the 4th defendant. It appears that he had fallen ill at the time on account of blood pressure. The will recites that he was aged about 60 years and had been ill for the previous two or three days. Under the will, he appointed the plaintiff, his sisters son Godavarthi Purushotham and his wife Lakshmikanthammas sisters husband Kurmala Sesharao as executors for managing his estates until the 4th defendant attained majority. The plaintiff was to be the treasurer in charge of the management, and the trusted clerk D. W. 1 Suryanarayanamurthi was appointed on a salary of Rs. 50 per month to maintain the accounts and advise the executors. D. W. 1 was given an additional monthly remuneration of Rs. 25 for attending to the affairs and the accounts of an educational endowment to be managed by the plaintiff. There was further a bequest of Rs. 1,000 to him as a present. Out of the estate, one half of the amounts collected from the assets and liabilities in the account books, and Ananthapuram Agraharam, hamlet of Ponddugala, were bequeathed to the plaintiff. There was a bequest of Rs. 10,000 to the plaintiffs second son Narayanarao. A sum of Rs. 10,000 was bequeathed to the testators wife Lakshmikanthamma, and a sum of Rs. 1,500 to his daughter venkata Subbamma. It is unnecessary to refer to the other provisions of the will. Exhibits B-8 and B-10 were both got registered at Narayanamurthis house on 30th july, 194
6.
( 30 ) AFTER getting a lease of the 1st defendants eight annas share under Exhibit b-8, the plaintiff attempted to lease out the entire Mill to two Marwaris. This was objected to by the 1st defendant as soon as he came to know about it. The marwaris issued a lawyers notice Exhibit B-56 dated 2nd October, 1946, alleging that the plaintiff had received an advance of Rs. 2,100 on 27th September, 1946 and demanding the execution of the lease for the agreed period of two years. The 1st defendant gave a prompt reply Exhibit B-75 dated 4th October, 1946, denying that he was a party to the agreement and declining to be bound by any agreement got from the plaintiff. He also pointed out in Exhibit B-75 that he was entitled to the major share of ten annas in the Mill while the plaintiff was entitled only to a six annas share. It may be noted that this was the position, because his lease under Exhibit B-8 to the plaintiff was to commence only about a year later, on 10th october, 1947.
( 31 ) A few days later, under the registered deed Exhibit B-12 dated 9th October, 1946, the 1st defendant and the plaintiff jointly leased out the entire Mill to the and defendant, for a period of two years from 10th October, 1946 to 9th October, 194
8. The 2nd defendant was a partner of the 1st defendant since 1925 in another concern, viz. , the Sobhandri Rice Mill. The lease under Exhibit B-12 was taken by the and defendant for the purpose of carrying on the business of the Mill in partnership with the 1st defendant, the plaintiff and 9 other persons-Exhibit B-55. Exhibit B-12 recites that the 1st defendant and the plaintiff were entitled to twelve annas share in the property in their own right and to the remaining four annas share by virtue of the lease under Exhibit B-2. The stipulated annual rent Was rs. 12,250 besides municipal tax. In respect of the rent payable for the year from 10th October, 1946 to 9th October, 1947 Rs. 7,656-4-0 representing 1st defendants ten annas share was acknowledged as having been received by cheque, and Rs. 4593-12-0 representing the plaintiffs six annas share was acknowledged as having been received in cash by them respectively. With regard to the rent for the period from 10th October, 1947 to 9th October, 1948, the lessee was directed to pay Rs. 7,656-4-0 to the 1st defendant and Rs. 4,593-12-0 to the plaintiff on 10th October, 194
7. On the expiry of the two years term, the lessee was directed to deliver the property to both the ist defendant and the plaintiff. The property demised comprised not only the Mill, but also a foundry in the premises and its equipment. Only the upstairs portion of the Mill building covered by the lease under Exhibit B-8 was not included in the lease under Exhibit b-
12. The evidence is that the foundry in the premises had been constructed on his own by the plaintiff between October, 1945 and July, 1946, at an expense of about rs. 10,000. On 9th October, 1946, the date of the lease under Exhibit B-12, the 1st defendant purchased a ten annas share in the foundry from the plaintiff by paying the latter the proportionate expenditure of Rs. 6,000 and odd. He also paid an additional sum of Rs. 5,450 to the plaintiff. These payments were effected by appropriate book adjustments in their accounts. The relevant entries at page 257 of the 1st defendants day book have been marked as Exhibit B-76 and show that Peda venkata Subba Rao was credited with Rs. 6,585 for the ten annas share in the foundry and with a further sum of Rs. 5,450 mentioned as having been agreed to be paid to him gratis. The case of the 1st defendant is that he really paid the Rs. 5,450 in consideration of the plaitiff surrendering the lease under Exhibit B-
8. On the other hand, the case of the plaintiff is that the lease to him under Exhibit B-8 remained unaffected and the Rs. 5,450, represented merely the rounded off difference between the sum of Rs. 7,656-4-0 which was directed to be paid to the 1st defendant under exhibit B-12 and the sum of Rs. 2,200, which was due to the 1st defendant under exhibit B-8 for the period from 10oth October, 1947 to 9th October, 1948, the first year of the term of Exhibit B-
8.
( 32 ) IN support of his case that far from his having agreed to surrender Exhibit B-8 the agreement between him and the 1st defendant was that the operation of Exhibit b-8 should remain unaffected. The plaintiff filed Exhibit A-3, the genuineness of which was denied by the defendants. Exhibit A-3 is a plain paper copy, said to have been prepared by the 2nd defendants clerk Poornachandra Rao, of an unregistered agreement alleged to have been executed by the plaintiff and delivered to the 1st defendant at the time of Exhibit B-
12. It purports to have been executed in order to allay the 1st defendants apprehensions that the plaintiff might lease the Mill without the 1st defendants knowledge and consent and proceeds on the basis that Exhibit b-8 will be operative. Its genuineness depends solely on the plaintiffs oral evidence, because D. W. 1 Suryanarayanamurthi, the alleged scribe of the original of Exhibit A-3 and D. Ws. 5 and 9, the alleged attestors to it, have denied that there was any such agreement. We shall deal with its evidentiary value later in the course of our judgment. The contention of the defendants is that even apart from the plaintiff having actually agreed to surrender Exhibit B-8, his execution of Exhibit b-12 jointly with the 1st defendant has the legal effect of an implied surrender of Exhibit B-
8.
( 33 ) ON 4th January, 1947, the 1st defendant was taken fromhis house at Vijayawada to a relatives house at Chirala for consultation and treatment for his blood pressure. On 8th January, 1947, while at Chirala, he got a stroke of paralysis and was treated by Dr. Gross of the Mission Hospital there. This doctors report Exhibit A-1, dated 9th January, 1947, shows that the 1st defendant was mentally deranged for some hours after the stroke but improved with rest and sedatives. On 9th January, 1947, the 1st defendant was brought back to his house at Vijayawada. Thereafter he was treated by P. W. 2 Dr. Lakshmikanta Sastri until 25th January, 1947 and again between May and July, 1947, by D. W. 8 Ramaswami Naidu between the last week of January and the end of April 1947, and by D. W. 7 Dr. Madhava Rao between july, 1947 and April, 194
8. He appears to have got a second stroke in the latter part of September, 1947 and he died on 30th April, 194
8. The plaintiffs case is that throughout the period after gth January, 1947, the 1st defendant was mentally deranged and was unconscious or semi-conscious. The defendants case is that he recovered his full mental faculties on 10th January, 1947, that he was improving in health until he got the second stroke in September, and that even afterwards he was of sound mind until about a week prior to his death.
( 34 ) ON 15th January, 1947, the 1st defendant executed a codicil Exhibit B-21 (a), which was registered at his house by D. W. 10 the Sub-Registrar on 23rd January 194
7. Under the Codicil, the provisions of the will Exhibit B-10 were modified in various respects. Lakshmikanthamma was appointed as the fourth executor and was constituted the treasurer and managing executor in the place of the plaintiff, the bequest to the plaintiff out of the amounts realised from the book assets and liabilities was reduced from one-half to one fourth. Ananthapuram Agraharam properties were to pass to the plaintiff only on the 4th defendant attaining majority and the plaintiff was directed to pay meanwhile the income from the properties to the 4th defendant. The bequest of Rs. 10,000 to the plaintiffs second son Narayana rao was made conditional on the boy being adopted by the daughter-in-law Venkatalakshminarasamma.
( 35 ) THE codicil also authorised Lakshmikanthamma to lease the testators share in the Mill after the expiry of Exhibit B-12, on 9th October, 1948, until the 4th defendant attained majority. As the testator was not able to sign owing to paralysis of his right side, he affixed his thumb impression to the document. The scribe of Exhibit B-21 (a) was D. W. 1 Suryanarayanamurthi and the attesiors were the testators father-in-law Modadugu Venkatarathnam who died before the trial and one of the testators clerks D. W. 4 Krishnamurthi.
( 36 ) ON 29th January, 1947, the 1st defendant executed Exhibti B-26 over his thumb impression leasing out his ten annas share in the Mill to defendants 2 and 3 for a period of two years from 10th October, 1948 to 9th October, 1950, for an annual rent of Rs. 6,250, besides municipal tax. The scribe was D. W. 1 and the attestors were Modadugu Venkataratnam, and three clerks D. W. 4 Krishnamurthi, D. W. 5 ramayya and one Tavva Venkateswarlu, a clerk in the Sobhanadri Rice Mill. Exhibit B-26 was registered at the 1st defendants house by D. W. 10 the Sub-Registrar on 10th February, 194
7.
( 37 ) ON 17th July, 1947, the 1st defendant executed over his thumb impression the gift deed Exhibit B-41 giving the Ananthapuram Agraharam properties to his wife lakshmikanthamma and providing that the will Exhibit B-10 and the codicil Exhibit b-21 (a) should not take effect as regards these properties. The document was written by D. W. 1 and attested by D. W. 7, by Modadugu Venkataratnam and by one Jonnavittala Venkatachalapathi. It was registered at the 1st defendants house by another Sub-Registrar D. W. 12 on 12th September, 194
7. The plaintiff attacks all the three documents Exhibits B-21 (a), B-26 and B-41 on the ground that the 1st defendant was incapacitated by unsoundness of mind throughout that period, it will be convenient to deal (in Appeal No. 642 of 1951) with this common ground of attack although the question as regards Exhibit B-26 arises only in the other appeals.
( 38 ) THE plaintiffs case is that throughout the period from 9th January, 1947, until the 1st defendant died on 30th April, 1948, the 1st defendant had completely lost his soundness of mind and that taking advantage of his condition, the clerk D. W. 1 suryanarayana Murthi, the second wife D. W. 14 Lakshmikanthamma, her father modadugu Venkataratnam and some others brought into existence Exhibit B-21 (a), b-26 and B-41 and got these documents registered. The case of the other side is that the1st defendant was in a sound and disposing state of mind from about 10th january, 1947, until his condition deteriorated about the end of January, 1948 and that he executed the documents of his own free will. By Exhibits B-21 (a) and b-41, the 1st defendant modified the dispositions in his admitted will Exhibit B-10 and the onus of establishing the 1st defendants mental capacity to validly execute exhibits B-21 (a) and B-41 is undoubtedly on the 4th defendant and Lakshmikanthamma who rely on them. No doubt, Exhibit B-26 came into existence between the dates of Exhibits B-21 (a) and B-41 and this part of the plaintiffs attack on Exhibit b-26 proceeds on the footing that the 1st defendant was mentally deranged even when he executed Exhibit B-21 (a) a fortnight earlier. But, as urged by Sri V. Rangarchari, the learned counsel for the plaintiff, the capacity of the 1st defendant to execute Exhibits B-21 (a) and B-41 has to be scrutinised with stricter standards than in the case of Exhibits -2
6. In the case of Exhibits B-21 (a) and B-41, it has to be established that when he executed them, the 1st defendant was possessed of testamentary capacity as explained in the decisions, that is to say, that he was aware of the nature and extent of his properties and had the intelligence to form his own judgment regarding the claims of all his relations and any other persons on his bounty. His Lordship then discussed the evidence.
( 39 ) IN our judgment, the 1st defendant was in a sound and disposing state of mind when he executed Exhibits B-21 (a) and B-41 as also when he executed Exhibit B-a
6. We reverse the finding of the lower Court as regards Exhibit B-21 (a) and B-41. Appeal No. 642 of 1951 is allowed and O. S. No. 75 of 1949 is dismissed with costs throughout. With regard to the remaining four appeals, the questions raised are dealt with in the judgment of my learned brother, and I am in complete agreement with the reasoning and the conclusions therein. We find that the first defendants two annas share in the leasehold interest under Exhibit B-2 devolved not on the plaintiff but on the 4th defendant, that the agreement of 1946 set up by the plaintiff and sought to be proved by the spurious document Exhibit A-3 is not true, that on the other hand the plaintiff expressly surrendered on 9th October, 1946, his leasehold interest under Exhibit B-8 to the 1st defendant and that by the execution of exhibit B-12 there was in law also an implied surrender by the plaintiff of the lease under Exhibit B-
8. Appeals Nos. 13 and 14 of 1951 are allowed wih costs (one set)and the plaintiffs memorandum of cross-objections are dismissed with costs. It follows that the plaintiffs suit O. S. No. 134 of 1947 must be dismissed with costs throughout. Appeal No. 97 of 1951 is allowed to the extent of decreeing O. S. No. 204 of 1949 for Rs. 12,500 in modification of the decree for Rs. 2,500 passed by the lower Court. As the dispute in this suit was covered by the dispute in the other two suits O. S. Nos. 134 of 1947 and 208 of 1948 and the appellant could have got adequate relief by getting himself impleaded in O. S. No. 208 of 1948 in which the leasehold right was sold in auction by the Court, we confirm the lower Courts order that the parties should bear their own costs and direct that the parties bear their own costs in appeal No. 97 of 1951.
( 40 ) OUR finding with reference to appeal No. 55 of 1952 is that the Madras Buildings (Lease and Rent Control) Act does not apply to the lease under Exhibit B-
12. The lessees, who brought the suit O. S. No. 208 of 1948 asked for a permanent injunction against Peda Venkata Subba Rao on the footing that they were exclusively entitled to the possession of the Mill factory and that Peda Venkata Subba Rao had no right to possession. But the result of our findings is that they were entitled to possession of only a 5/8th share during the term of Exhibit B-26 and that Peda Venkata Subba rao was a co-owner entitled to the remaining 3 /8th share and to joint possession.
( 41 ) IT is contended that as Peda Venkata Subba Rao, who claimed the right to possession of the entire Mill after his fathers death was undoubtedly attempting to dispossess the lessees as found by the lower Court, the lessees are entitled to an injunction in respect of their 5/8th share. But that was not the basis on which the suit was brought, and in the circumstances, we agree with the lower Court that the lessees were not entitled to an injunction. The lease under Exhibit B-26 expired on 9th October, 1950 and the lessees have to apply to the lower Court by way of restitution in so far as their rights under Exhibit B-26 were infringed on account of the entire mill having been auctioned by the lower Court during the pendency of the suit. The amount to be restituted will carry interest at six per cent. For these reasons, Appeal No. 55 of 1952 is dismissed with costs. Appeals Nos. 13 and 14 of 1951 allowed. Appeal No. 97 of 1951 allowed in part. Appeal Mo. 642 of 1951 allowed. Transferred Appeal No. 55 of 1952 dismissed.
Advocates List
For the Appearing Parties D.P. Narayana Rao, K. Ranganadhachari, M. Sitarama Rao, N. Bapiraju, S. Srinivasachari, V. Rangachari, Advocates
For Petitioner
- Shekhar Naphade
- Mahesh Agrawal
- Tarun Dua
For Respondent
- S. Vani
- B. Sunita Rao
- Sushil Kumar Pathak
Bench List
HON'BLE MR. JUSTICE VISWANATHA SASTRI
HON'BLE MR. JUSTICE KRISHNA RAO
Eq Citation
AIR 1957 AP 619
LQ/TelHC/1955/231
HeadNote
In a dispute over a leasehold interest in an oil mill, the High Court of Andhra Pradesh held: 1. The surrender of a leasehold interest may be express or implied. An express surrender occurs when the lessee yields up his interest under the lease to the lessor by mutual agreement between them. An implied surrender arises by operation of law when the conduct of the parties is inconsistent with the continuance of the existing lease. 2. If a lessee enters into a new lease of the property leased during the continuance of an existing lease, such a lease may operate as a surrender of the original lease if it is accepted by the lessor and the lessee delivers possession to the new tenant. 3. A joint lease executed by the lessor and the lessee may operate as an implied surrender of a prior lease between the same parties if the terms of the joint lease are inconsistent with the continuance of the prior lease. 4. The Madras Buildings (Lease and Rent Control) Act does not apply to a lease of an oil mill consisting of buildings, machinery, and plant used for the purpose of manufacturing oil.