P L D 1970 Supreme Court 185 (PLP)

Date of hearing: 23rd December 1969. M. R. KHAN, J.-This appeal by special leave is from the judgment of a Division Bench of the High Court of East Pakistan in a second appeal arising out of a suit for recovery of khas possession of a land after evicting the defendant therefrom. The appeal raises the sole question whether the lease in respect of certain premises came to an end with the destruction of the huts covered by the lease. In order to appreciate the question raised, it is necessary to give a brief narrative of the material facts. By a deed of lease, dated the 15th June 1955-Eich. 1(a), Rezia Begum, the respondent herein granted a lease to the appellant in respect of the premises described in the schedule thereto for a period of two years from the first day of May 1955, at a monthly rental of Rs.

80. The lease was taken for the business purposes of the appellant. In that deed, the appellant was permitted to erect a temporary katcha but on the open space adjoining the katcha but which was already there in the premises. After taking the lease, the appellant erected one katcha but on the said adjoining open space. After the. expiry of this lease, a fresh lease deed Exh. 1 was executed by the parties in respect of the same premises on the 10th June 1957, for a further period of two years, commencing from the 1st May 1957, at a monthly rental of Rs.

100. During the subsistence of the second lease, the two hits comprised in the premises were completely destroyed by fire on the 19th May 1958. The respondent then asked the appellant to give up possession of the land on the assertion that with the complete destruction of the two huts the lease in respect of the premises came to an end. The appellant, it was alleged, took time from the respondent for vacating the land, but, instead of doing so, he surreptitiously constructed one katcha but on the land on which the burnt huts had stood. Thereupon, the respondent brought a suit for recovery of khas possession of the land after removing the but constructed thereon by the appellant. The appellant contested the suit by filing a written statement contending, inter alia, that th. lease included not only the two huts but also the land described in the deed of lease ; that the huts were partially destroyed by fire and that such partial destruction did not bring the lease to an end. It was also contended by him that he had constructed a new but on the old site with the consent of the respondent and -was in occupation thereof as tenant. The trial Court found that the subject-matters of the lease were only the two huts, but did not include the land. It was also found that both the huts were totally destroyed by fire. On these findings, the trial Court took the view that with the destruction of the huts the lease stood determined. Accordingly, a decree for khas possession was passed in the suit. The appellant appealed against the trial Court's decree. Agreeing with the findings of the trial Court, the first appellate Court dismissed the appeal. A second appeal by the appellant to the High Court was also dismissed on the ground that with the destruction of the two huts the lease came to an end. In taking this view, the learned Judges of the High Court proceeded on the footing that the subject-matters of the lease were only the two huts, but did not examine to construe the deed of lease in order to ascertain what exact subject-matters were covered by the lease. For a correct answer to the question under consideration in this appeal, it is necessary to ascertain the exact subject-matters of the lease and also the law by which the lease was governed. In the first deed of lease, dated the 15th June 1955-Exh. 1 (a), the demised premises was described in its schedule as follows :- "District Chittagong, P. S. Kotwali, Mouza Patherghata, within the jurisdiction of Chittagong Municipality Ward "C" under holding No.

situated within R. S. Plot number 402/404, Khatian Number

523. One katcha house of Bamboo chattai measuring 35' ft. x 18' ft. and its attached open space in the southern side measuring 35' ft. x 22' ft." This schedule was reproduced in the second deed of lease, dated the 10th June 1957, but in it two huts were mentioned instead of one and the number of the municipal holding which was missing from the schedule of the first lease deed was stated to be

166. The premises so described was obviously a municipal holding situated on R. S. Plot No. 402/404 within the Chittagong Municipality. Municipal holding, according to its definition in section 3 (21) of the Bengal Municipal Act, as it was in force at the relevant time, means land held under one title or a3reement and surrounded by one set of boundaries. It is thus pretty clear that the demised premises under the second deed of lease included not only the two huts but also the land described in the schedule of that deed. The trial Court took the view that "premises" means the house let out but can not include land. Although the first appellate Court did not agree with this view of the trial Court, that Court found that, in the instant case, the subject matters of the lease were only the two huts. It is not, however, correct to say that "premises" cannot include land. The term "premises" as defined in section 2 (6) of the East Bengal Premises Rent Control Act, 1953 (this Act was in force at the relevant time) is as follows :- "2(6). `Premises' means any building or part of a building or any but or part of a but which is, or is intended to be, let separately for residential or non-residential purposes or for both and includes,- (a) the garden, grounds and outhouses (if any) appertaining to such building or part of a building, or but or part of a hut, and (b) any furniture supplied by the landlord for use in such building or part of a building, or but or part of a hut, and also includes a room, part of a room, in any hotel, boarding house or lodging house." This definition of "premises" was retained in the subsequent enactment, namely, the East Pakistan Premises Rent Control Ordinance, 1963, which is for the time being in force. Thus, "premises", according to its definition, includes not only a building or but also grounds, among other things. The descriptions of the demised premises as given in the schedule of the second deed of lease leave no room for controversy that the said premises included the land as well. As regards the law by which the lease was governed, Mr. D. C. Bhattacharjee, learned counsel for the appellant made a feeble attempt to show that the lease in question was governed by the East Bengal Non-Agricultural Tenancy Act, 1949, but the learned counsel utterly failed to substantiate this. A non agricultural lease, according to the provisions of the said Act, is a lease in respect of non-agricultural land alone, but does not include any building or but occupied by a tenant if such building or but has been erected or is owned by the lessor. The lease here being in respect of both land and huts, the same is clearly outside the ambit of the Non-agricultural Tenancy Act. It appears that both the parties proceeded throughout on the basis that the lease in respect of the suit premises is governed by the East Pakistan Premises Rent Control Act and the Transfer of Property Act. In fact, the appellant as the lessee in respect of the suit premises had applied to the House Rent-Controller under the East Bengal Premises Rent Control Act for permission to deposit rent. Moreover, he took the plea in his written statement that the suit was not maintainable without the permission of the Rent-Controller and that the lease could not be determined except by a notice under section 106 of the Transfer of Property Act. Thus, on the appellant's own showing, the lease, in respect of the suit premises is governed by the Premises Rent Control Act and the Transfer of Property Act and not by the Non -Agricultural Tenancy Act. Section 111 of the Transfer of Property Act provides the various modes in which a lease in respect of immovable property may be determined. Under that section, the destruction of the whole or part of the subject-matter of a lease is not one of the grounds for which a lease in respect of immovable property comes to an end. Except section 111 of the Transfer of Property Act, there is no other provision either in that Act or in the premises Rent Control Act or its successor Ordinance with regard to the mode of determination of a lease in respect of immovable property. Section 108(e) of the Transfer of Property Act, of course, provides that if any material part of the demised property is wholly destroyed by fire, tempest or flood etc., the lease shall, at the option of the lessee, be void. Although the two huts of the suit premises were destroyed by fire, the lessee in this case far from exercising the option to avoid the lease, persisted that the lease continued in operation. It cannot, therefore, be said that with the destruction of the two huts included in the suit premises the lease automatically came to an end under any of the provisions of the laws by which the lease was governed. There is yet another aspect of the matter. When the lease included not only the huts but also the land, the Courts below were not correct in holding that the entire subject-matters of the lease were destroyed by fire, because the land itself remained unaffected by fire. If the respondent is not willing to construct any new but on the land, it is just possible for the appellant to utilise the vacant land for the purposes of his business till the lease is determined according to law. The learned Judges of the High Court proceeded on the erroneous view that the lease in question was in respect of the two huts alone which were destroyed by fire. Accordingly, they came to the conclusion that with the burning of the huts, the entire subject-matters of the lease were destroyed and conse quently section 108(e) of the Transfer of Property Act was not attracted to this case and the lease automatically came to an end. In support of this view, they relied on an earlier decision of the High Court of East Pakistan in the case of Golamar Rahman Sowdagar v. Emaratannissa Begum (P L D 1957 Dacca 372). In that case, the subject matter of the lease was only a but and not the land. As the but was completely burnt down, it was held in that case that the option under section 108(e) of the Transfer of Property Act was not available to the lessee and that the lease came to an end on the general principles of law. The learned Judges deciding the cited case did not, however, explain the general principles of law said to be applicable in that case. However, the facts of the aid present case are different in that the land which is also the subject-matter of the lease was not destroyed and, as such, there was no complete destruction of the demised premises. The appel lant as lessee had, therefore, an option under section 108(e) of the Transfer of Property Act to take the stand that the lease is not void. Even if it is assumed that the entire subject-matters of the lease in question were destroyed, the appellant had still the option to avoid or not to avoid the lease under section 108(e) of the Transfer of Property Act. The said section runs thus "if by fire, tempest or flood, or violence of any army or of a mob or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void." The learned Judges of the High Court as also the learned Judges who had decided the case of Golamar Rahman Sowdagar v. Emaratennissa Begum appeared to be of the view that section 108(e) is attracted only in a case where the subject-matter, of a lease is partially destroyed and that the said section has no application in the case of destruction of the entire subject-matter. The relevant expression occurring in the said section which appeared to have weighed with the learned Judges in taking that view is "any material part of the property be wholly destroyed". The word "any" occurring in the said expression does not necessarily mean only a part ; it is a word of wider connotation and implies the whole as well. The word "any", as stated by Fry, L. J. in the case of Duck v. Dates (13 Q B D 843) is a word which excludes limitation or qualification. The word "any" occurring in a lease came to be construed by the House of Lords in the case of Liddy v. Kennedy (L R 5 H L 134). In that case, the lease gave a power to the lessor to resume "possession of any portion of the premises demised". In that case, there arose a controversy with regard to the construction of the word "any" occurring in the above-quoted expression. It was contended that the word "any" implied that the demised property was resumable piecemeal and not all at al time. The House of Lords rejected that contention and construed the word "any" as implying not only a part but also the whole. Accordingly, it was held in that case that the landlord had the power of resuming either the whole or any portion of the demised property. This construction put on the word "and" is equally apt in this case. If the lessee has the option under section 108(e) of the Transfer of Property Act to avoid a lease on i the ground of partial destruction of the demised properly and thereby relieve himself of the liability to pay rent, it does not stand to reason why he shall not have the option to avoid the lease if the whole of the demised property is destroyed. If the option under the said section be not available to the lessee in the event of destruction of the whole of the demised property, he shall, in spite of non-existence of the, subject-matter of the lease continue to remain liable for rent during the entire period of the lease and for all time to come if the lease is a perpetual one, whereas in the case of partial destruction of the demised property he can get rid of his liability to pay rent by avoiding the lease by exercising his option under section 108(e). The unjust conse quences as indicated above may ensue if section 108(e) be not held to be applicable-also in the case of destruction of the whole of the subject-matter of a lease. It is the duty of the Court to put such construction on statutory provisions as it appears to it to be most in accord with reason, justice and fairness and to avoid such construction as may cause hardship and injustice. We, therefore, think that section 108(e) of the Transfer of Property Act does not admit of any narrow construction and that a fair and reasonable construction of that section warrants its applica tion also in the case of destruction of the entire subject-matter of a lease. Mr. Ahmad Sobhan, learned counsel for the respondent submits that the lease in respect of the suit premises was frustrated according to the provisions of section 56 of the Contract Act. The doctrine of frustration, as embodied in the said section is applicable only to executory contracts whereunder performance or further performance of a promise is outstanding, but does not apply to a transaction which is complete and has already created a right in immovable property in favour of a party. In the present case, the lease in respect of the suit premises was a completed transaction. Under the lease, the appellant got possession of the premises paid rent therefor to the respondent. Thus, the lease created an estate in immovable property in favour of the appellant. This is manifest from the definition of `lease' in section 105 of the Transfer of Property Act, which runs thus :- "A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms." In view of this definition the lease clearly created a right in rem in favour of the appellant, however transient that right may be. After the accrual of this right under the lease, nothing more remained to be performed by either party to the lease. Hence, section 56 of the Contract Act does not, in terms, apply in this case. Mr. Ahmad Sobhan then invoked the doctrine of frustration under the English Common Law in support of his contention that the lease in favour of the appellant came to an end under that doctrine. He cited the case of Denny, Mott & Dickson Ltd. v. James B. Fraser & Co. Ltd. (1944 A C 265) for this purpose. In that case, an executory contract was held to have been frustrated by operation of law. That case is therefore, of no assistance here. Even in England, the doctrine of frustration has not been definitely held to be applicable to a lease creating an estate in immovable property. The question whether under the English Common Law this doctrine applies to lease or not was exhaustively) dealt with by the House of Lords in Cricklewood Property and Investment Trust Ltd. v. Leightons Investment Trust Ltd. (1945 A C 221). Lord Russel and Lord Goddard were definitely of the opinion that the doctrine of frustration cannot apply to a lease in respect of immovable property as it creates an estate in such property. Lord Simon and Lord Wright agreed that generally speaking the doctrine of frustration is inapplicable to a lease, but expressed the view that it is only in rare and exceptional circumstances that the doctrine might apply. Lord Porter who was also a party to the decision in the cited case did not, however, express any opinion on this point. This question came up for consideration in a later case, namely, Denman v. Brise ((1949) 1 K B 22). In view of the divergent opinions expressed by the House of Lords in the case of Cricklewood Property and Investment Trust Ltd. v. Leightons Investment Trust Ltd. the Court of Appeal preferred to take its own decision in the case of Denmen v. Brise on the question of applica tion of the doctrine of frustration to a lease. In that case, a house in occupation of a tenant was destroyed by a bomb. The tenant accordingly ceased to occupy the premises, but there was no evidence to show that he abandoned or surrendered the lease. The landlord constructed a new house on the old site. There after, the tenant wanted to get possession of the new house, but the landlord refused. On an action by the tenant for possession, the Court found the tenant to be entitled to occupy it. In another identical case, namely, Simper v. Combs ((1948) 1 All E R 306), Denning, J. sitting on the King's Bench Division held: "The position at common law is plain. She had a contractual tenancy, and that tenancy has never been determined by due notice to quit. It, therefore, continues in existence. The destruction of the house by a bomb did not determine the tenancy. It is well settled that the destruction of a house does not by itself determine the tenancy of the land on which it stands. The result is that there has been nothing at common law to determine the tenancy. The fact that a new house has been erected on the site does not make any alteration to the legal position." Thus, the doctrine of frustration was not applied even in such extreme cases. It is not necessary to refer to other English decisions inasmuch as the question whether the doctrine of -frustration applies to a lease does not appear to have been finally resolved so far in England by any authoritative decision of the House of Lords. Section 56 of our Contract Act lays down as rule of positive law relating to frustration of contract by reason of supervening impossibility or illegality of the act agreed to be done by the contracting parties. Next, section 111 of the Transfer of Property Act provides the various modes for the, determination of a lease in respect of immovable property of the kind involved in this case. In view of these statutory provisions, there is really no scope for importing the doctrine of frustration under the English Common Law, although the English decisions possess persuasive value and may be helpful in showing how Courts in England decide cases under circumstances similar to those which have come before our Courts (see A I R 1930 P C 59). The subject-matters of the lease in this case, as already stated, were not completely destroyed, for the demised land remained unaffected by fire. The appellant did not walk out and abandon the land after the destruction of the huts. Nor did he exercise the option under section 108(e) of the Transfer of Property Act with a view to avoiding the lease. A lease may be, avoided on the happening of a contingency as contemplated by its terms, express or implied. No provision is there in the lease deed in this regard. It cannot, therefore, be said that the lease in question came to an end with the destruction of the two huts comprised in the demised premises. Although the lease did not come to an end, the appellant was not authorised to raise a structure of his own on the old site except with the consent of the respondent. Having failed in his attempt to invoke successfully the doctrine of frustration under the English Common Law, Mr. Ahmad Sobhan contended that the respondent was nevertheless entitled to a decree for possession on the ground of expiry of the lease. This contention is of no avail. The lease in question which was for a period of two years expired as early as the 30th April 1959. The suit was brought on the 9th September 1959. In the suit, possession of the demised land was claimed only on the ground of determination of the lease by the destruction of the huts and not on the ground of expiry of the lease. This is abundantly clear from paragraph 9 of the plaint where it was expressly stated that the cause of action for the suit arose because of the destruction of the huts. When the suit was brought more than four months after the expiry of the lease, the respondent could have asserted that the lease was determined by efflux of time and claimed possession on that ground. But she intention ally refrained from taking that stand. This was perhaps due to the fact that a legal bar though not absolute, is there under the East Bengal Premises Rent Control Act, 1953 and its successor Ordinance to eject a tenant only on the ground of expiry of the lease. The respondent cannot, therefore, get a decree for posses sion in this suit on the ground of determination of the lease by efflux of time. This, -however, will not debar her from seeking relief in an appropriate action that may be brought on the ground of expiry of the lease, if such action is maintainable in law. In the result, we allow the appeal and set aside the judgment of the High Court. In the attending circumstances of the case, we do not, however, make any order as to costs. K.B.A. Appeal accepted.