Surpat Singh and Others vs Sheo Prasad Gupta

Shearer, J.—This appeal arises out of a suit in which the plaintiff asked for and obtained a declaration that he was entitled to surrender a patni lease. The tenure in question comprises four villages in the district of Bhagalpur and was created in 1869 by the predecessor in interest of the defendants in favour: of one Mr. ,T. W. Bowers who was an indigo planter and was the owner, of an indigo factory situated in Hulas, one of the villages. It may be presumed that the reason why Mr. Bowers took the lease was that he wished to ensure an adequate supply of indigo plants for his factory, either by growing indigo himself on such bakasht or zerat land as there was in the villages, or by using his influence with the raiyats to induce or compel them to grow indigo for him. The learned Subordinate Judge has attached a good deal of weight to the circumstances that the indigo in dustry began to decline soon after the commencement of the present century and has now largely ceased to exist. Nothing, however, in my opinion, really turns on this. Neither in the patta nor in the kabuliyat is any mention made of the purpose for which the lease was taken, and it is quite impossible to presume that there was any understanding between the lessor and the lessee that the lessee would be entitled to surrender the lease in the event of indigo ceasing to be manufactured at his factory. Moreover, there is no evidence to show, and it is not even suggested, that the plaintiff or his immediate predecessors-in-interest ever grew or manufactured indigo or were the owners of the Inampur Indigo Factory which had belonged to Mr. Bowers. Mr. Bowers, and, after has death, his widow, remained in possession of the tenure until 1896 when it was sold in execution of a decree for money and was purchased by the Eastern Mortgage Company. In 1908, the Eastern Mortgage Company assigned the patni lease to the joint family, of which the plaintiff was then a member, and, in 1926, as a result of a partition, the plaintiff became the patnidar. In 1869 the Kosi river ran past one of the villages, and a stream known as the Chitauni dhar, which took off from the Kosi river, ran through that and also other villages comprised in the tenure. Soon after the plaintiff became the patnidar in 1926, the Kosi changed its course, and, as a result of this, a great volume of water began to flow through the Chitauni dhar which from having been a comparatively narrow stream, became a broad river. A great deal of land went out of cultivation and indeed remained submerged for several years. A certain number of houses in some of the villages were destroyed, and their owners left their homes and migrated elsewhere. The suit was instituted in 1939 and the trial began in 1941, and it was conceded that, before then, the Kosi had again changed its course and had begun to flow in another channel some seven or eight miles to the west of these villages. In 1937, one Shyam Sunder Missir took settlement of 5 bighas of land'' in one of them and executed a registered kabuli-yat (EX. A). It is, therefore, reasonable to assume that the subsequent change in the course of the river Kosi had occurred prior to 1937. The witnesses for the defendants said that it occurred soon after the earthquake of 1934, and their evidence on this point was corroborated by admissions obtained from two of the witnesses for the plaintiff, Hari Jha (P.W. 4) and Achal Singh (P.W. 7), in cross-examination.

It is true that it was not until 1940 that any considerable number of raiyats followed the example of Shyam Sunder Missir and came forward to take settlement of bakasht land. The explanation given for this, and I have no doubt myself that it was the correct one was that the raiyats were apprehensive that the river might swing back again. The plaintiff became the sole owner of the tenure in 1926, and he would seem to have had no difficulty in collecting rent in 1333 Fasli. At all events, he appears to have made a profit out of the tenure in that year. It was not until 1334 Fasli and the following years that his rent collections were poor and raiyats began to surrender or abandon their holdings. Considerable areas of land in each of the villages would seem to have been under water more or less continuously from 1334 to 1342 or 1343 Fasli, and although the river would seem to have receded in the latter year, a great deal of land was, at the time of the trial, still covered with sand and with kas and patet jungle. The process of reclamation had, no doubt, begun, but as yet had not made any very considerable progress. On the other hand, it is quite clear that no permanent damage had been done to the land and that raiyats, not merely were prepared to come forward and take settlement, but were also prepared to pay a salami and rent at rates considerably higher than were paid by raiyats having a right of occupancy in the land prior to its inundation. The plaintiff would not appear haye granted any remission of rent to those raiyats whose holdings diluviated or who were unable to meet their obligations. A very large number of rent suits were instituted, and, in execution of the decrees, which he obtained, the plaintiff purchased the holdings.

The plaintiff also took steps to obtain possession through the revenue Courts of any holdings which were abandoned, and induced a considerable number of raiyats either to surrender or to sell their holdings to him. The total area of land comprised in the tenure, as shown in the record of rights, was 4603 bighas, and there is documentary evidence on the record to show that the plaintiff has come into khas possession of no less than 1475 bighas. A number of kabuliyats (Ex. A series) were produced by the defendants, showing that, in 19,40, the plaintiff settled more than 100 bighas of this land. As I have, just said, the executants of these kabuliyats, not merely paid him a salami, but undertook to pay rent at ft considerably higher rate than had been paid for this land previously. So far, therefore, as this land is concerned, the plaintiff must either have already recouped any loss which he has sustained or will recoup that loss very shortly and will then make a very much larger profit out of it than he had done prior to 1834 Fasli. -Lochan Mandar (P.W. 9) said that men from Saran had taken settlement of land in Haripur, and Goghan Mian (P.W. ll) said that new tenants had settled in both Haripur and Hulas. Janak Bihari Lal (D. W. 2), a law clerk of the defendants, said that more land would have been settled but for the opposition of the raiyats who wished to take settlement of the land themselves and were opposed to its being settled with strangers, who, presumably, were prepared to pay a higher rate, of rent than they were. In 1938 the Bihar Seduction of Arrears of Rent and Restoration of Bakasht Lands Act was enacted, and, prior to that, Section 112A had been inserted in the Bihar Tenancy Act for the purpose of enabling raiyats having a right of occupancy in their land to apply, on one or other of a number of grounds, for the reduction of their rents. As a result of the former enactment, the plaintiff may now find it a matter of difficulty to settle any considerable portion of the 1475 bighas of land, which have come into his khas possession at high rates of rent. As a result of the latter enactment, the rent payable to him by a number of occupancy raiyats will be less than the rent which "they had to pay prior to the inundation. In other words, the plaintiff will be unable to carry to its logical conclusion the policy which he seems to have systematically pursued of attempting to turn to his own advantage the misfortunes of his tenantry. But that can clearly be no ground for his avoiding the lease. It is said that, from 1334 to 1345 Fasli, the income which the plaintiff derived from the tenure was very much less than the expenses which he had to incur in its management. That, I have no doubt, is correct. At the same time, I have also no doubt that one reason why the expenses so greatly exceeded the income was that the plaintiff entered into a great deal of litigation with the object of evicting many of his tenants. A patwari of the plaintiff said that, in 1347 Fasli, the amount of his commission was RS. 97-18-0 which shows that a sum of Rs. 4848 must have been collected as rent.

Over and above this, the plaintiff must have realized a considerable amount by way of salami for the new settlements which he made in that year. It is not very clear to me that, in 1847 fasli the plaintiff sustained any loss, and certainly, if he did sustain a loss, the loss must have been small. All that can, therefore, be said on behalf of the plaintiff is that, from 1884 to 1345 fasli, or even later, he has sustained a loss which, in certain years, has been very considerable, and that, while, in future in any particular year he may not sustain any actual loss, the profit which he is likely to make is not likely to be very consi. derable and will certainly be a great deal less than he himself anticipated. Is the plaintiff, however, on such a ground, entitled to surrender the lease? It is well settled that a patnidar has no right to throw up "or resign his lease at his own choice. This was pointed out as long ago as 1873 by Jackson J. in 20 w. R. 283 This decision was subsequently affirmed by another Divisional Bench of the Calcutta High Court in Judoonath Ghose v. Schoene Kilburn & Co. (83) 9 Cal. 671. That judgment was delivered by Field J. who was a''recognised authority on the land laws of Bengal. Mr. P. R. Das, for the respondent, does not dispute the proposition, but relies on certain observations made by Jackson J. in Heera Lal Pal v. Neel Monee Pal (73) 20 W. R. 383. That learned Judge there said:

We are clearly of opinion that, whether or not the civil Court might upon sufficient ground give relief in a suit brought to dissolve a oontract between the zamindar and his patneedar, it certainly is not open to a patneedar of his own choice to throw up the patnee and by so doing escape his liability to pay rent. We do not say that the contract is indissoluble, because many circumstances might arise in which the interference of a Court of justice might fairly be invoked to put an end to it; but the dissolution of such a contract must, we think, be an act of the Court and the result of proper enquiry, and cannot be taken by the patneedar alone, and pleaded in answer to a suit for rent.

I am inclined to think that, in making these observations, Jackson J. had in mind the principle of rescission of contracts. There is nothing to prevent the parties to a patni lease from agreeing that, on the expiry of a certain period, or on the happening of a certain contingency, the patnidar, is to be entitled to surrender the lease and, in such a case, it would be for a Court of justice to say whether the particular contingency which was contemplated had, in fact, arisen. Again, it is obvious that a patnidar may have been induced to accept a lease or to pay the rent stipulated for in it in consequence of some misrepresentation as to the prbperty or the income which he was likely to derive from it in which case also he would be entitled to avoid the lease. Mr. P. R. Das does not, however, rely on rescission of the contract, but on another and fundamentally different doctrine, namely, the doctrine which is usually spoken of as the doctrine of frustration. That doctrine, as I understand it, is that, when the performance or further performance of a contract has been rendered impossible or has been indefinitely postponed in consequence of the happening of an-event which was not and could not have been contemplated by the parties to the contract when they made it, a Court will con. sider what, as fair and reasonable men, the parties would have agreed upon if they had in fact foreseen and provided for the particular event, and if, in its opinion, they would have decided that the contract should be regarded as at an end, will discharge the party who would otherwise be liable to pay damages for non-performance of the contract. The application of the doctrine depends on the particular circumstances of the case in which recourse is sought to be had to it, and the circum-stances of the case, with which we are now concerned, are, in my opinion, quite dearly such that the doctrine can have no application whatever. The event relied on as operating to produce frustration of the contract ia the change which occurred in the course of the river Kosi in or about 1384 Fasli. But did this event, in fact, produce frustration of the contract ? The plaintiff remained in occupation of the tenure and continued to pay or was compelled to pay the rent. It is conceded that the reason why the plaintiff instituted the suit was not that he was unable to'' pay the rent, but that he was unable to pay it from the income which he derived from the property, and, in order to pay it, had to draw on his other resources: in other words, it has not become impossible for the plaintiff to discharge his obligation under the lease, but merely burdensome to him to do so. In (1647) 82 E. R. 8973 a lessee who had been driven out of his farm and had his crops destroyed by a body of insurgents sought on that ground but without success to avoid his liability for the rent. Lord Blackburn in River Wear Commissioners William Adamson (1877) 2 A. C. 743, in explaining the decision in Paradine v. Jane (1647) 82 E. R. 897 said:

Prince Rupert and his cavaliers, if they were to-be considered the King''s enemies, by driving away the defendant''s cattle and burning his crops, may have reduced the defendant to poverty, but did not render the payment of his rent to his landlord " impossible in any other sense than they rendered the payment of any other debt to any other creditor impossible.

Again, before the doctrine of frustration can be invoked, it must be shown that the event which has produced frustration was an event which the parties to the contract did not foresee and could not, with a reasonable diligence, have foreseen. Now, in 1869, when Mr. Bowers took this lease, the river Kosi ran past the leasehold property, and it must have been known to Mr. Bowers and his lessor that the river Kosi frequently changed its course. The possibility of the river washing away part of the land demised or flooding the land causing damage to it must have been present to their minds. That it was, in Tact, present to their minds is clear from the terms of the lease, as it was specifically provided that, in spite of land being lost by diluvion or of damage being caused by inundation, the lessee was to remain liable to pay the whole of the rent stipulated for. Even if the lease had not contained these provisions, I should have found it impossible to say that a fair-minded and reasonable lessor, who was granting a lease in perpetuity, would have agreed that, in the event of the river Kosi inundating the property and making it impossible for the lessee to derive any profit from it for a" period of 10 or 15 years or even longer, it should be at the option of his lessee to surrender the lease.

There have been cases in England, in which a lessee relied with far more justification than the plaintiff, and yet, without success, on the doctrine of frustration in answer to a claim for rent Whitehall Court, Limited v. Ettlinger (1920) 1 K. B. 680 and London, and Northern Rstates Company v. Schlesinger (1916) l K. B. 20 were both cases in which rent was sought to be recovered from a tenant who had been removed from possession of the premises demised under circumstances which could not possibly have been foreseen either by him or by his lessor when the lease was entered into. If, in England, a lease had been nothing more than a contract, by which the lessor granted to the lessee the use and enjoyment of the premises demised, and the lessee, in return, undertook to pay a stipulated rent, the lessee would, in both these cases, have been discharged or absolved from his liability to pay the rent accruing due subsequent to his dispossession. Under the law of Scotland a tack or lease

is a contract of location, where by the use of land, or any other immovable subject is set to the lessee or tacksman for a certain yearly rent, either in money, the fruits of the ground, or services": Brs-kine''s Principles of the Law of Scotland (21st Edn.) page 183.

Similarly, under the Roman Law, a lease was a contract of locatio conductio, the lessor granting to the lessee the use and enjoyment of the premises demised, and the lessee, in return, undertaking to pay rent. The lessee acquired no right in rem to the property demised. On the contrary in the eye of law, possession remained with the lessor, and, in the event of the lessee being dispossessed, the lessee had a right to recover damages. In fact, it was found necessary to provide that, when the dispossession of the lessee had been caused by damnum fatale or inevitable accident, the contract should be discharged, the lessor not being liable in damages and the lessee, of course, not being liable to pay the rent, which liability in any case was imposed only so long as he enjoyed the usufruct. Under the Common Law of England, however, a lease is not a mere contract, but is a transfer of an interest in immovable property. It necessarily follows that, when a lessee has been dispossessed, the dispossession being caused by some inevitable accident and not by the lessor or by title paramount, his interest in the leasehold property remains and his liability to pay rent continues. That was the reason which Lush J. gave for his decision in Northern Rstates Company v. Schlesinger (1916) 1 K. B. 20 and in the subsequent case in Matthey v. Curling (1922) 2 A. C. 180, his reasoning was endorsed by the Court of Appeal and subsequently by the House of Lords. No decision was cited at the bar in which the Courts in this country have applied the doctrine of frustration in the case of a lease. The decision most nearly in point and one which was relied on by the learned Subordinate Judge and has been relied on by Mr. P. R. Das, for the respondent, is Goculdas Madhavji v. Narsu Yenkuji 13 Bom. 630. In that case, the defendant undertook to pay a sum of money every month to the plaintiff which, in the contract, was described as rent and the plaintiff, in return, undertook to permit the defendant to enter on his land and blast and quarry for stone at such points on it as he might point out to him. In order to carry out the operations which he intended, the defendant had to obtain a license, and this license was refused him by the authorities concerned. The contract, into which the parties entered, resembled a mining lease, but, as Sargent C. J. in his judgment pointed out, it was not "a contract of letting." The defendant was held to be not liable to pay the rent on the ground that, in previous years, he had held a license and neither he nor the plaintiff had ever contemplated the possibility that this license would not be renewed. This decision, to my mind, is not at all in point in the present case, as, in view of the terms contained in the lease, it cannot possibly be said that the parties to it contracted on the basis that the river Kosi would not change its course or, at all events, would not flood and cause damage to the leasehold property.

Learned Counsel for the respondent obviously felt the difficulties involved in relying on tha doctrine of frustration, as, in the latter part of his argument, he invited our attention to Clause (e) of Section 108, T. P. Act, and endeavoured to persuade us that the principle underlying that section was an equitable principle and ought to be applied in favour of his client; The principle embodied in the section is not, however, a principle which was ever applied by the Courts of Chancery in England and appears to have been borrowed from the Roman law or from some other system of law, such as the Law of Scotland, which is largely derived from or based on the Roman law. If I had to construe the section, I should find some difficulty in knowing what precisely is the meaning to attach to the words "any material part" and also to the word "substantially" which occur in it. Under the Roman lawemphyteusis was a grant of land for ever or for a long period on the condition that an annual rent should be paid to the grantor and his successor, and that, if the rent was not paid, the grant should be forfeited, and in some respects, resembled a patni lease. Legislation was ultimately needed in order to decide what the respective liabilities of the grantor and the grantee should be in the case of permanent damage being caused to the property, and it was enacted that

if no agreement was made as to the risk the thing might undergo, the risk of a total loss should fall upon the owner and the detriment of a partial loss upon the occupier": Vide Sanders on the Institutes of Justinian (Edn. 8), page 371.

In Scotland, much the same result was arrived at, it being held that the lessee

is at the risk of the quantity and the value of the subject-matter, but he is not at the risk of the being or existence of it James Gowan v. B. Christie & Mrs. Christie (1870) 2 S& D A.C. 2739.

Fortunately, perhaps, it is not necessary for me to decide how far that and other decisions are of assistance in construing Clause (e) of Section 108, T. P. Act, as the section cannot be invoked except in cases where the parties to a lease have not themselves provided for the contingencies referred to. As I have just said, the parties to this lease specifically agreed that, in spite of land being lost by diluvion or damage being caused by flooding, the lessee was to remain liable to pay the whole of the rent stipulated for.

A large number of decisions were cited at the bar, but, for the most part, were cited in order to explain the scope and extent of the, doctrine of frustration. It is quite unnecessary for me to refer to them. I ought, however, I think, to refer to three decisions on which the learned Subordinate Judge relied in giving the plaintiff a decree and which, I may say, were mainly relied on by Mr. P. R. Das for the respondent. In or Taylor v. Caldwell (1863) 3 B.& S. 826, the plaintiff sued to recover damages from the defendant for breach of contract. The defendant had undertaken to place at the disposal of the plaintiff certain premises on certain specified days for the purpose of holding a series of concerts. Before the earliest of these days arrived, the premises were accidentally "burnt down and destroyed. In his judgment, Blackburn J" makes no mention of the doctrine of frustration which was not fully developed until the war of 1914-1918. The ground on which the defendant was held to be not liable in damages was that it had been an implied term of the contract that the premises should remain in existence and be available for the purpose contemplated by the parties.

Krell v. Henry (1903) 2 K. B. 740 was a case in which the plaintiff sought to recover from the defendant the balance of a sum which the defendant had contracted to pay in return for being permitted to have the use of certain premises on 26th and 27th June 1902, for the purpose of viewing the processions to be held in connexion with the Coronation of His Majesty the King Edward VII. The balance was, under the contract, to have been paid on 24th June 1902, and, prior to that, it had been announced that, in consequence of the illness of His Majesty, the processions would not take place. The defendant was absolved from liability on the ground that, in entering into the contract, the parties had proceeded on the footing that the processions would, in fact, take place, and had never contemplated the contingency which actually arose. It is clear from the decision and other decisions in similar case that, if the payment of the money had, under the contract, become due before the occurrence of the event which produced the frustration of the contract, the defendant would have been held to have been liable. The remaining decision relied on was Baily v. De Crespigny (1868) 4 Q. B. 180. That, it is true, was a case in which a lessor sought to avoid his liability under a covenant in the lease. The lessor had undertaken that

neither he nor his heirs nor his assigns should or would, during the term, permit to be built on a paddock fronting the demised premises ... any messuage or dwelling bouse, coach-house or stable, or other erection.

The defendant, in breach of this covenant, assigned the paddock to the London, Brighton and South Coat Railway Company, and the Company, after the assignment and during the term, erected and built a railway station on it. The Railway Company had, under an Act of Parliament, been given power to ac. quire land compulsorily, and, if the defendant had not assigned the land to them, the Railway Company could nevertheless, in exercise of its statutory powers, have entered on the land and done what they actually did on it. The defendant was absolved from liability and the ratio decidendi appears to have been that the general word ''assigns'' whielroccurred in the covenant, was not meant or intended by either of the parties to the deed to mean an assign by operation of law such as, in substance, the Railway Company was. Mr. P. R. Das, for the respondent, said that he strongly relied on this decision, but, in order to make it or indeed either of the other two decisions applicable in the particular case, he was compelled to argue that, when Mr. Bowers in the kabuliyat which he executed used the expressions ''diluvion'' and ''inundation,'' he contemplated ''partial erosion'' or ''occasional flooding'' and not any natural calamity such as occurred in 1344 Fasli. I find myself, however, quite unable to accept this view of the matter. The language which was used in the kabuliyat and also in the patta was comprehensive enough to embrace the event which actually occurred and on which the plaintiff now relies as having produced frustration of the contract. In any case, as I have already said, there was, in fact, no frustration whatever of this particular contract. The lower Court was, in my opinion, wrong in decreeing the suit, and I would allow the appeal and dismiss the suit with costs in this Court and in the Court below.

In the other appeal No. 55 of 1942, the question that arises is whether or not the Court below was correct in allowing interest at 6 1/4 per cent, per annum on arrears of rent which accrued due subsequent to the enactment of Bihar Act, 8 of 1937. The plaintiff, who is the appellant, asserted that it was a condition of the lease, that the lessee should pay interest at 12 per cent, per annum on arrears of rent and that this stipulation was not and could not be affected by Act, 8 of 1987. The latter contention is, of course, correct. The reason, however, why the lower Court allowed interest at the lower rate was that neither the patta nor the kabuliyat was produced in evidence. It appears that the documents were in another Court and that, before the commencement of the trial, the plaintiff was unable to obtain possession of them. The plaintiff could, however, have put in certified copies, and this he omitted to do. It is said that there was on the record a judgment in an earlier rent suit in which interest at 12 per cent, per annum had been allowed. This document has not, however, been printed in the paper-book and it is impossible to say whether in that suit any question arose as to the rate at which interest was legally payable, The learned advocate for the appellant asked that the suit should be remanded to the Court below, but, as, in my opinion, the plaintiff was guilty of negligence in not putting in a certified copy of the patta, I see no reason to do this. The appeal should, in my opinion, be dismissed with costs.

Fazl Ali, C.J.

I agree.