Calcutta High Court
Ansuman Mullick vs Mallika Investment Co. (P.) Ltd. And ... on 13 May, 2004
Equivalent citations: AIR2004CAL316, AIR 2004 CALCUTTA 316, (2005) 1 RENCR 588, (2005) 1 RENTLR 151, (2005) 1 ICC 807
Author: Jayanta Kumar Biswas
Bench: Jayanta Kumar Biswas
ORDER Jayanta Kumar Biswas, J.
1. This is the plaintiffs application for interim reliefs in his pending suit.
2. The plaintiffs case, in a few words, is this. The first, fifth and sixth defendants have no right, title and interest in the suit property (i.e. the property at 5, C.R. Avenue, Kolkata). The lease dated February 14th, 1970, whereunder it was let out to the first defendant for ten years, was not validly renewed. Since the lease expired by efflux of time, the first, fifth and sixth defendants are not entitled to collect and appropriate rent from the third and fourth defendants who have been occupying it as tenants. The property is in a bad state of repair, rates and taxes payable for it have remained unpaid for long. Hence, it is necessary that a receiver should be appointed for protecting his interests in the suit property during pendency of the suit.
3. Mr. Hirak Mitra, senior advocate, appears for the plaintiff. His first contention is the following one. Although the registered lease dated February 14th, 1970 contained terms and conditions for its renewal, it was not renewed according to law. It could have been renewed only by a fresh registered lease, and admittedly no fresh lease was executed and registered. The option for renewal exercised by the first defendant by its letter dated November 2nd, 1979 was not followed up by execution and registration of a fresh lease. The letter dated February 2nd, 1980 written by the second defendant to renew the lease for a further term of sixty years on same terms and conditions would not renew the lease in law. As was held in Rasiklal M. Mehta v. The Hindustan Photo Films Manufacturing Co. Ltd., AIR 1976 Mad 194; Hindustan Petroleum Corporation Ltd. v. Vummidi Kannan, (DB); and Bharat Petroleum Corporation Ltd. v. V. Ashvinraj, , a lease in force can be renewed only by executing and registering a fresh lease, and not by any other means.
4. Mr. Bhaskar Sen, senior advocate, appears for the first and sixth defendants. His submissions in reply are these. For renewal of the lease execution and registration of a fresh lease was not required at all, because according to its terms and conditions the period of lease was to stand automatically extended on the basis of unilateral exercise of the option for its renewal by the first defendant. In the lease no right was reserved to the lessor to refuse the renewal. In the capacity of executor of the Will of the lessor, the second defendant was not required to do anything in response to the letter dated November 2nd, 1979, whereby the first defendant exercised the option for renewal of the lease. The renewal was not dependent upon agreement of the second defendant. So his letter dated February 2nd, 1980 can be simply ignored. The position of law has been discussed in Mulla's the Transfer of Property Act, 1882 (9th edn., p. 1011). In view of the decisions in Lalit Mohan Dey v. Smt. Satadalbasini Dasi, (DB); and Ranjit Kumar Dutta v. Tapan Kumar Shaw, , it cannot be said that in the present case the lease required a renewal by execution and registration of a fresh lease.
5. Mr. S.P. Sarkar, senior advocate, appears for the second defendant. To refute Mr. Mitra's contention he has made the following submissions. According to the terms and conditions of the lease its term was to stand automatically extended on unilateral exercise of the option for renewal by the first defendant. The position of law would appear from the decisions in Baker v. Merckel, (1960) 1 All ER 668; Dutta and Associates v. State of West Bengal, ; and J. Thomas and Co. Pvt. Ltd. v. Pawan Kumar Tebriwala, 1998 (2) Cal HN 502 (DB). It was held in these cases that neither consent of lessor for exercise of option by the lessee for renewal of a lease is required, nor is the renewal of a lease dependent upon any express exercise of option for it by the lessee.
6. Since several decisions have been cited at the bar regarding the necessity of execution and registration of a fresh lease for renewal of the original lease, I think it will be proper to deal with them for ascertaining the legal position, before the question is taken up for consideration on merits.
7. In Baker v. Merckel, (1960) 1 All ER 668 the original lease was made on February 17th, 1947; the demise was for seven years from November 1st, 1946. On March 23rd, 1949 the lessor and the lessee made a supplemental deed; it was in the following terms:--
"This deed made March 23, 1949, between the within named Frederick Jonas Baker (the lessor) of the one part and the within named Henry Walter Merckel (the lessee) of the other part is supplemental to the within written lease. Whereas it has been agreed between the parties hereto that the term granted by the within written lease shall be extended for a further period of four years at the option of the tenant. Now this deed witnesseth and it is hereby agreed and declared that if the tenant shall give notice in writing to the landlord before Nov. 1, 1952, of such his desire the within written lease thereupon shall be read, construed and take effect as though the term thereby granted was for a period of eleven years from Nov. 1, 1946, and that the tenant shall paint the external wood and iron work of the demised premises with two coats of good oil paint and in a workmanlike manner in the fifth, eighth and last years of the term and not as provided in Clause 2(e) of the within written lease."
It was in the context of the above terms of the fresh lease the Court of Appeal held that by a consensual variation embodied in the supplemental deed indorsed on the lease there was built into the original lease of seven years, an option, which changed the demise from one of seven years to one which might extend to eleven years on the exercise of the option; and since the exercise of the option was not a consensual matter, the extension caused by the exercise of the option was not dependent on the lessor's consent.
8. In Lalit Mohan Dey v. Smt. Satadalbasini Dasi, (DB) the original lease for twenty years contained a renewal clause providing that at the option of the lessee the demise would be renewed for a further term of six years and the lessor should execute and register a fresh lease for such term. After twenty-six years the lessee did not quit possession. In the lessor's suit for ejectment the lessee took the plea that after expiration of the twenty year term no document was executed and registered to renew the term of the original lease, and hence a new tenancy stood created in view of her holding over the demised premises within the meaning of Section 116 of the Transfer of Property Act, 1882. On such facts it was held that even in the absence of execution and registration of a deed to renew or grant fresh lease the possession of the lessee after expiration of twenty years was referable to the original lease under its renewal clause, as the parties acted upon the renewal clause; and the plea of holding over was not sustainable.
9. In Rasiklal M. Mehta v. The Hindustan Photo Films Manufacturing Co. Ltd., AIR 1976 Mad 194 the learned Judge of the Madras High Court held as follows :--
".........once the option is exercised either by the lessor or by the lessee, a valid lease as such does not come into existence unless a registered document is executed, if the renewed lease in question satisfies the requirements of Section 107 of the Transfer of Property Act. After all, the option conferred either on the lessee or on the lessor is more or less in the nature of a pre-emption and neither the conferment of such option itself nor the exercise thereof automatically or of its own force brings into existence a new lease irrespective of other statutory provisions regarding the form procedure or the modalities by which alone such a lease can be brought into existence."
In holding as above the learned Judge considered various authorities, and referred to Ballentine's Law Dictionary (2nd edn.) to ascertain the meaning of the phrase "renewal of lease", which is :--
'There is a distinction between a stipulation in a lease to renew it for an additional term and one to extend it, in that a stipulation to renew requires the making of a new lease, while a stipulation to extend does not".
10. Dutta & Associates v. State of West Bengal, was decided relying on the division bench decision of this Court in Lalit Mohan Dey v. Smt. Satadalbasini Dasi, to hold that the tenant continuing in possession after expiration of the original term fixed in a lease that contained a renewal clause, would be considered to be in possession under the renewal clause even when the option for renewal had not been exercised, and such a case would not be a case of holding over under Section 16 of the Transfer of Property Act, 1882.
11. In Hindustan Petroleum Corporation Ltd. v. Vummidi Kannan, (DB) while approving the proposition discussed in Rasiklal M. Mehta v. The Hindustan Photo Films Manufacturing Co. Ltd., AIR 1976 Mad 194 a division bench of the Madras High Court held as under :--
"....................... But, a bare exercise of option for renewal could not be of any avail to the defendant, because the law is well settled that a covenant for renewal contained in a lease does not ipso facto extend the tenure or term of the lease but only entitles the lessee to obtain a fresh lease. If there is a clause for renewal in the original lease, and that clause has been taken advantage of and any option pursuant thereto has been properly exercised it only gives a lever for the lessee to obtain a new lease in accordance with and in due satisfaction of the law governing the making of leases. If to the renewed lease, the requirements of the first part of Section 107 of the Transfer of Property Act are attracted, as obviously are in the present case, no valid lease would come into existence unless the said requirements are satisfied. So far as present case is concerned, even if the defendant is stated to have exercised its option for renewal, which position we have accepted, it has not improved the lot of the defendant to say that there had been a renewed lease, which had enured in its favour, because admittedly the requirements of Section 107 of the Transfer of Property Act were not satisfied................"
While holding as above the bench referred to the Supreme Court decision in Delhi Development Authority v. Durga Chand Kaushish, , and quoted from it the following :--
"A renewal of a lease is really the grant, of a fresh lease. It is called a 'renewal' simply because it postulates the existence of a prior lease which generally provided for renewals as of right. In all other respects, it is really a fresh lease."
12. Bharat Petroleum Corporation Ltd. v. V. Ashvinraj, was decided by the learned Judge of the Madras High Court relying on the previous decisions in Hindustan Petroleum Corporation Ltd. v. Vummidi Kantian, (DB) and Rasiklal M. Mehta v. The Hindustan Photo Films Manufacturing Co. Ltd., AIR 1976 Mad 194.
13. In Ranjit Kumar Dutta v. Tapan Kumar Shaw, by the lease dated October 1st, 1956 the property was demised for fifteen years. Option was given to the lessee to seek its renewal for a further period of fifteen years. Under the relevant covenant on exercise of the option the lessor was bound to renew it. One of the covenants was that at the termination of the tenancy after the period of fifteen years, or thirty years if the period was extended, the lessee should yield up quiet and peaceful possession of the demised premises. The lease clearly provided for its extension and the lessor was bound to-extend it on exercise of option for it by the lessee. After expiry of initial period the lessee remained in possession. For renewal of the lease no document was executed and registered. After expiry of thirty years the lessor called upon the lessee to deliver vacant possession of the demised premises. As the lessee refused to oblige, the lessor filed the suit. On facts, it was held that since it was a case of extension of lease, execution and registration of a fresh lease was not required.
14. In J. Thomas & Co. Pvt. Ltd. v. Pawan Kumar Tebriwala, 1998 (2) Cal HN 502 (DB) the lease was for a term of twenty-one years with option to renew for another term of five years. Without exercising option the lessee remained in possession. In the ejectment suit filed after twenty-six years the lessee took the plea that since no lease had been executed in terms of the renewal clause, a new tenancy stood created. The plea was rejected on the ground that the possession was referable to the renewal clause of the lease. Their Lordships examined the decision in Burmah Shell Oil Distributing v. Khaya Midhat Noor, AIR 1983 SC 1470, and found its ratio to be the following :--
"............a renewal clause, if exercised, cannot override the provisions of Section 107 of the Transfer of Property Act requiring leases above one year to be registered............"
15. The legal position, therefore, is that renewal of lease and extension of lease are two distinctly separate concepts. While extension does not create a fresh or new lease, renewal does. If It is a renewal and hence a fresh lease, it must be created according to provisions in Section 107 of the Transfer of Property Act, 1882. Whether the option clause contained in a lease provides for renewal or extension is to be ascertained primarily from its terms and conditions. If there is uncertainty or ambiguity, the other covenants of the lease would be read to find out the intention of the parties. Oral evidence led by the parties at the trial would help to resolve the issue. But at interim stage the Court has to find out the answer only from the lease and other undisputed pieces of admissible evidence.
16. In this case from the lease dated February 14th, 1970 I find that the suit property was let out to the first defendant for a period of ten years. The property let out was a five-storied building standing on a piece of land measuring about 11 (eleven) cottahs and 8 (eight) chittaks. The first defendant was to pay rent at the rate of Rs. 1000/- (one thousand only) per month; municipal rates and taxes were, however, to be paid by it. It was to take possession of the property through attornment of tenancies by the tenants thereof. The property was in actual physical possession of the tenants previously inducted by the lessor. The terms and conditions for renewal of the term of the lease were mentioned in its Clause 3 (iii); it reads as follows :
"That the lessee paying the rent and otherwise observing the terms herein contained shall on written notice being served in that behalf 3 months before the expiry of the term hereby rented shall (sic) be entitled to a renewal of the term hereby created for further terms (sic) of 50 years on the same terms and conditions."
17. The question whether the lessor could have executed the lease validly, when admittedly the property to be demised was not in his actual physical possession, has not been raised by the learned counsel for the plaintiff. Hence there is no scope to express any opinion on this question.
18. I find that except in its Clause 3 (iii) nowhere in the lease anything was mentioned about its renewal. In the entire lease nothing was mentioned about extension of the term of the lease beyond the period of ten years. On the contrary, Clause 2 (iii) of the lease provided that on termination of the tenancy or sooner determination thereof the first defendant would yield up the demised premises in a clean and tenantable condition and in a reasonable state of repairs. Therefore, the question whether the lease would have entitled the first defendant to an automatic extension for a further period of sixty years once it served a written notice in terms of its Clause 3 (iii), has to be decided solely on the basis of the purport conveyed by the terms and conditions contained in its Clause 3(iii). They only spoke about the lessee's entitlement to a renewal on same terms and conditions. The requirement of execution and registration of a fresh lease was not expressly dispensed with. It could not have been dispensed with without paying such stamp duty payable on the deed as was payable on a lease for a term of seventy years. There is nothing on record to show that such stamp duty was paid. It rather seems that stamp duty paid was such as would have been payable, on a lease for a term not exceeding ten years.
19. From the above facts it is apparent that the parties never intended the lease to be one for seventy years. I am therefore of the prima facie view that the renewal clause did not give any right to the first defendant to enjoy automatic extension of the term of the lease by unilateral exercise of the option for renewal. The renewal required execution and registration of a fresh lease.
20. The lessor (Aviram Mullick) died on March 20th, 1978. During his lifetime he executed a Will dated November 19th, 1965. He bequeathed all his properties in favour of his two sons (the plaintiff and the second defendant) in equal shares, subject to some limited provisions for his wife. He appointed one Birendra nath Mullick (one of his brothers-in-law) and the second defendant the joint executors of his Will. Birendra renounced executorship. Consequently the second defendant applied for probate of the Will, and probate was granted on June 28th, 1982.
21. A director of the first defendant wrote a letter dated November 2nd, 1979 to the second defendant, who was described as executor of the estate of late Aviram Mullick. The letter was regarding the lease executed by late Aviram Mullick with respect to the suit property. It reads as follows :--
"The aforesaid lease dated 14th February, 1970 will expire on 13th, February 1980. In terms of Clause 3 (iii) of the said Lease we hereby give you this notice for renewal of the said Lease for a further term of 60 years as contained in the said Lease dated 14-2-1970."
22. As executor of the estate of late Aviram Mullick the second defendant wrote a reply letter dated February 2nd, 1980. The letter reads as follows :--
"With reference to your letter No. MI/CA/79 dated 2nd Nov. 1979, I as executor to the estate of Aviram Mullick Deceased, renew your lease for a further terms (sic) of 60 (sixty) years on the same terms and conditions as contained in the Lease dated 14-2-1970 as proposed in your above letter."
23. From the acts of the parties, as mentioned above, it is clear that the proposal for renewal of the original lease was made by the first defendant by its letter dated November 2nd, 1979, and though the proposal was accepted by the second defendant, no fresh lease was executed and registered. I am, therefore, of the prima facie view that the lease dated February 14th, 1970 was never renewed in accordance with law.
24. Mr. Mitra's next contention is founded on three factual aspects. The first one is this. Under the corporate veil of the first defendant one Mr. J.N. Bose, since deceased, procured the utterly unconscionable lease from the plaintiffs father. The relationship between Sri Bose and the plaintiffs father was one of solicitor and client. Behind promotion of the first defendant Sri Bose was the key person. In fact the first defendant was an alter ego of Sri Bose, and this will be clear once the corporate veil is pierced by applying the principle laid down in Delhi Development Authority v. Skipper Construction Pvt. Ltd., AIR 1996 SC 2003. The first defendant was not engaged in any kind of business activity. It was created only for the purpose of grabbing the suit property from the plaintiffs father by exercising undue influence. For no apparent reasons the huge property at a prime place of the city of Kolkata, which at present generates lakhs per month as rent income, was shown to have been let out by the plaintiffs father on a rent of Rs. 1000/- per month for ten years, with an option for renewal of the lease for a further period of sixty years on the same terms and conditions.
25. The second aspect is this. The second defendant was appointed the executor of the Will left by the lessor. When the question arose for renewal of the lease, he did not utter a single word regarding the propriety, reasonableness and fairness of the demand made by the first defendant for renewal. While as executor, in discharge of his fiduciary obligations, the second defendant was reasonably expected to question the entitlement of the first defendant to get renewal of the lease for a period of sixty years on a monthly rental of Rs. 1000/- only, he remained completely silent. He did not raise any question, because he was also intimately associated with Sri Bose, and the relationship between them was also one of solicitor and client.
26. The third aspect is the following one. The extent of the executor's powers has been explained in Paruck's the Indian Succession Act, 1925 (9th Edn., p. 1174). At the material point of time in the absence of probate of the Will, as executor, the second defendant had no authority or power to represent the estate of the decease'd testator (the lessor); position of law regarding this was discussed in Bibhuti Bhusan Roy v. Narendra Narayan Ghosh, (DB).
27. Pointing out the above facts Mr. Mitra has made the following submissions. The renewal of the lease granted by the second defendant in the capacity of executor of the Will of the lessor will not amount to a valid and lawful renewal. In view of the settled position of law regarding transactions between a solicitor and his client, it cannot be said that there was either a valid lease or it was validly renewed. The position of law in this regard will appear from the discussions on the subject in Cordery's Law Relating to Solicitors (5th Edn., ch. 7, p. 118) and Halsbury's Laws of England (4th Edn., Vol. 44, Para 118, p. 89). Because of the relationship between the parties, now the onus is entirely on the first, second, fifth and sixth defendants to prove that the actions regarding the lease of the suit property are lawful,, just and sustainable.
28. Submissions made by Mr. Sen, in reply, are these. The Advocates Act, 1961 did not prohibit the transaction. An advocate's duties to his client have been specified in Rule 49 (1) (c) of Chapter (ii) of the Bar Council of India Rules. The rules also did not prohibit the transaction. Sri Bose was only one of the two promoters of the first defendant. In his capacity of solicitor he did not commit any breach of the confidence reposed in him by his client. When the statute did not prohibit the transaction, no other consideration can be the basis or guide to question it, because such an exercise will be against the mandate of law. During his lifetime the lessor never raised any objection regarding the lease. When the question of renewal arose the second defendant had in fact no duty, because the lease was to stand automatically extended on the unilateral act of the first defendant. So there was no scope for the second defendant to raise any objection or question regarding the renewal of the lease. His relationship with Sri J.N. Bose and his sons (the fifth and sixth defendants) was absolutely immaterial and irrelevant. Hence the ground of solicitor client relationship has nothing to do with the question of validity of the renewal of the lease.
29. Regarding the solicitor client relationship and its effect on the renewal of the lease, Mr. Sarkar's contentions are these. The plaintiff has made bald allegation of undue influence. In terms of Order 6 Rule 4 of the Code of Civil Procedure, 1908, he was required to give necessary particulars of undue influence. In his pleading he has given nothing. As was held in Bishundeo Narain v. Seogeni Rai, in cases of fraud, undue influence and coercion, the party pleading it must set forth full particulars. The legal position regarding transactions between a solicitor and his client was reviewed in Bireswar Sen v. Ashalata Ghose, (DB).
30. I find that the legal position regarding transactions between a solicitor and his client, and their consequences, has been clearly explained in the authorities relied on by the learned counsel for the parties.
31. In Cordery's Law Relating to Solicitors (5th Edn., ch. 7, p. 118) while dealing with the aspect of disabilities of a solicitor, the scope and consequences of the confidential relationship arising from retainer were discussed in the following language :--
"The relationship existing between a solicitor and his client is recognised in equity as a fiduciary one imposing on the solicitor special obligations. In his dealings with his client the solicitor must exercise the utmost good faith, and in any financial transaction with his client (save as to costs for work done) there will be a presumption that such transaction should not be upheld unless the solicitor can establish that it was effected by the free exercise of the client's Will and without any influence on the part of the solicitor. Thus a solicitor is bound to give his client disinterested advice, and the mere fact that the solicitor, by becoming personally interested in a transaction of the client's, has put it out of his power to give that advice, will entitle the client, as against the solicitor, to have that transaction set aside unless the solicitor has disclosed his interest to his client. So also, when advising a client, a solicitor will be bound to make full and honest disclosure of facts within his knowledge, and he cannot excuse a failure to discharge this duty to one client by showing that a due discharge would have constituted a breach of duty to another. Whether the transaction is in substance a gift by the client to his solicitor a stricter rule applies than in transactions of purchase and sale.
As a consequence of these rules, transactions which between a solicitor and a stranger would be unobjectionable, may, between a solicitor and his client, be neither enforceable by the solicitor nor, subject to considerations of delay and confirmation, sustainable by him when impeached by the client."
32. In Halsbury's Laws of England (4th Edn., Vol. 44, Para 118, p. 89) the general principles regarding transactions between a solicitor and his client were discussed; and they are the following :--
"118. General principles. A solicitor who enters into a transaction with a client, or on whom a client confers a substantial benefit other than the solicitor's proper remuneration, by disposition inter vivos, will not be able to uphold the transaction or will not be permitted to retain the benefit, if the transaction is called in question by the client, unless the solicitor can prove to the satisfaction of the Court that he disclosed all material facts within his knowledge to the client, and that the transaction was effected by the Client in the free exercise of his Will and unaffected by any influence which the solicitor either in fact possessed or in law was deemed to possess. The stringency of the burden of proof thus placed on the solicitor varies with the circumstances. In the case of a gift, the burden of proof is more difficult to discharge than in the case of a sale or purchase, and similarly where the client is young, the solicitor's duty to him if not stronger is at least more obvious. The relationship of solicitor and client is regarded in equity as a fiduciary relationship, and the rule of equity that a transaction inter vivos is presumed to have been procured by undue Influence until the contrary is 'shown applies to transactions between a solicitor and his client. Accordingly, the question in each case is not merely whether the client understood and intended what he actually did but rather how his intention was procured, and decisions which show how the burden of proof may be discharged in the case of other fiduciary relationships are relevant when considering the position as between solicitor and client.
Apart from this equitable doctrine, it is the duty of a solicitor, when contracting with his client for a sale or purchase or other transaction, to make full disclosure of all material circumstances known to the solicitor, and failure to make such disclosure may lead to the transaction being set aside.
A transaction in relation to which the solicitor cannot, discharge the burden of proof placed on him by the rule is voidable but is not void. Thus, it can be confirmed by acquiescence or ratification when the solicitor's influence has ceased and the parties are on equal terms, or it may be set aside against the solicitor or volunteers claiming under him but cannot be avoided as against purchasers for value unless they took with notice. Rescission can only be obtained where restitution to the original position is possible.
In all transactions which may come within these principles one solicitor should not act for all parties."
33. In Bireswar Sen v. Ashalata Ghose, (DB) in the context of a gift by a person to his pleader's wife, a division bench of this Court in effect held that Court would not interfere with merely trifling gifts and set them aside upon the mere fact of confidential relationship and the absence of proof of competent and independent advice. It was observed that a gift made by a person of ample fortune would be a triffle one, when much more than his need would remain even after the gift.
34. The scope and extent of the powers of an executor of a Will probate whereof is yet to be obtained was examined in Bibhuti Bhusan Roy v. Narendra Narayan Ghosh, (DB). In it a division bench of this Court held that in the absence of probate the executor would not be empowered and entitled to represent the estate of the deceased testator in a suit originally filed against the testator during his lifetime.
35. It seems to me that the questions raised by the plaintiff regarding the transaction that took place through the letter dated November 2nd, 1979 written by the first defendant and the letter dated February 2nd, 1980 written by the second defendant are not liable to be rejected summarily. It is apparent that late Sri J.N. Bose was the key person behind the first defendant, and he was also the solicitor of the lessor. There is no dispute that the relationship between Sri Bose and the second defendant was also one of solicitor and client. The terms and conditions of the lease, and its renewal, apparently between the solicitors (acting under a corporate veil) and their clients, are bound to cause any person of reasonable prudence raise his eyebrows. Probate of the Will was also not obtained at the material point of time. In view of the proposition of law laid down by the division bench of this Court "in Bibhuti Bhusan Roy v. Narendra Narayan Ghosh, (DB), it is an open question whether without obtaining probate the second defendant was legally empowered to represent the estate for the purpose in question. There is nothing to show that the proposal for renewal of the lease was brought to the notice and knowledge of Birendra or of the plaintiff. It is quite surprising that the proposal for renewal of a ten year term lease for a further period of sixty years on the same terms and conditions did not evoke any reaction in the mind and conduct of the second defendant. He was ready to oblige the first defendant. If he was not required to do anything, as is now contended, then what prompted him not to write it has remained undisclosed. It is therefore apparent that the stand now taken by him is afterthought, and both he and his solicitors (now the fifth and sixth defendants, who are the sons of late Sri J. N. Bose) owe the obligation to justify their acts. Time for this will come when the suit is taken up for trial.
36. Mr. Sen and Mr. Sarkar have raised the plea of waiver, acquiescence and limitation. Their submissions are these. By partition deed dated July 12th, 1991 the plaintiff and the second defendant amicably partitioned the properties, which included the suit property. It is also the admitted position that the plaintiff signed the letter dated July 12th, 1991 jointly with the second defendant, and by this letter the first defendant was directed to ttorn in favour of the plaintiff. There is also no dispute that the plaintiff received rent from the first defendant from the year 1991 till before the filing of the present suit.
37. Regarding waiver and acquiescence Mr. Mitra's reply is this. The facts pointed out will not stand in the way of the plaintiffs challenging the validity of the renewal of the lease. All the material facts were concealed from the plaintiff by the second defendant and his solicitors. In view of the relationship of the parties, the plaintiff was not only entitled to be informed about the basic facts of the lease, but he was also entitled to be informed about the basic facts of the lease, but he was also entitled to be informed about his right to rescind it. At no point of time the material facts regarding the lease and its alleged renewal on utterly unconscionable terms and conditions were made known to the plaintiff by any of the defendants or by late Sri J.N. Bose. Foundation of waiver is knowledge of the person who is said to have waived. This is the legal position as was held in Talbot & Co. v. Haricharan Halwasiya, . When the plaintiff was not informed both about the basic facts connected with the renewal of the lease and his right of rescission, no question of his waiving the right to challenge the validity of the renewal could arise. The legal position will appear from the decision in Peyman v. Lanjani, (1984) 3 All Er 703.
38. The plea of limitation Mr. Mira has refuted in the manner following. The cause of action is not barred by the law of limitation as alleged by the defendants. From the statements in Paragraph 15 of the plaint, read with provisions in Section 17 of the Limitation Act, 1963, it will clearly appear that the cause of action is not barred by limitation. Immediately after acquiring knowledge of the fraud committed by the defendants, the plaintiff filed the suit. The facts connected with the renewal of the lease were within the special knowledge of the second defendant who was acting as executor. The allegations made by the plaintiff in the application regarding concealment of the material facts by him have not been answered by him by disclosing all the relevant facts which are within his special knowledge. Hence the allegations made by the plaintiff have to be treated as admitted, and at this stage they have to be accepted at their face value. The decision in Sahu Jain Ltd. v. Deputy Secretary, Ministry of Finance, 70 CWN 399 discussed and legal position regarding this.
39. I find that in Talbot & Co. v. Haricharan Halwasiya, the suit was filed alleging forfeiture of the lease on the ground of sub-letting in breach of the relevant covenant. The defendants took the defence that there was a waiver of the forfeiture. In this context the learned Judge held that since there was nothing to show that before issuing the notice under Section 111(g) of the Transfer of Property Act, 1882 the plaintiff had knowledge of the sub-letting there was no waiver of the forfeiture, because the foundation of waiver is knowledge of the person who is said to waive his rights, and there cannot be waiver in ignorance.
40. In Peyman v. Lanjani (1984)3 All ER 703 the plaintiff (Peyman) who sought to exercise the right to rescind an agreement was faced with the plea of waiver of such right by him. In such coniext while dealing with the proposition that a waiver must be an intentional act with knowledge two questions arose for consideration :-- (1) Knowledge of what? (2) Will an intention be presumed where there was none in fact ? After examining a large number of authorities the Court of Appeal held as follows :---
".......... knowledge of the facts which give rise to the right to rescind is not enough to prevent Mr. Peyman from exercising that right, but he must also know that the law gives him that right yet choose with that knowledge not to exercise it."
41. In Sahu Jain Ltd. v. Deputy Secretary, Ministry of Finance and Ors., 70 CWN 399 the respondents in the writ petition filed affidavit-in-opposition stating that the allegations made in it were not admitted by them. They also pleaded lack of knowledge regarding some allegations. It was held by the learned judge that while "not admitted" is no denial, bare denial also does not serve any purpose, where an allegation of fact need be specifically denied.
42. In my view, the questions regarding waiver, acquiescence and limitation can be adjudicated in this case only after recording evidence at the time of trial. From the statements in the pleading the suit does not appear to be barred by the law of limitation. The partition deed, the letter of attornment, and the fact of receipt of rent by the plaintiff, without there being anything more, are not such materials and facts as can non suit the plaintiff on the grounds of waiver and acquiescence. In my opinion, in a case where the transaction of the solicitor with his client fills the till of the solicitor and empties the client's, and the executor plays the Agent of the solicitor, the affected beneficiary should not be denied relief by the Court in the absence of a clearly proved case of waiver.
43. Mr. Mitra has further submitted that the first dependant has not paid the rates and taxes for a long period, and the property is in a bad state of repair. Both Mr. Sen and Mr. Sarkar have disputed the correctness of the submission.
44. I find that in twelfth paragraph of the application the plaintiff has alleged that the corporation rates and taxes payable for the property have not been paid since 1984-85, and the property is also in a bad state of repair. In its opposition the first dependant has very casually denied only the allegation regarding the rates and taxes; it has not said that all the rates and taxes were duly paid. Regarding the state of repair of the property it has said nothing. In his opposition the second defendant has said nothing about the allegations. In his opposition the sixth defendant also was not specific and clear while answering the allegations. Hence the allegations made by the plaintiff simply cannot be brushed aside. It is possible that there is sufficient element of truth in the allegations. In any event the defendants concerned have not come out with a clean case.
45. In view of the facts and circumstances discussed above, and the position of law as already examined, I am of the opinion that the plaintiff has made out a case for appointment of receiver over the suit property. The first defendant is claiming right to collect and appropriate rent from the tenants in the property, it claims the right on the basis that the lease giving it such right was renewed for sixty years. I have already found that the challenges thrown by the plaintiff regarding the validity of the claimed renewal have force and merit. If he is otherwise found entitled to the final reliefs, they will not be refused only on the ground that for a long period the first defendant has collected and appropriated rent from the tenants. Rather it may suffer appropriate decree for making refund. If during pendency of the suit a receiver is appointed, the defendants, and particularly the first defendant, shall not suffer any greater loss or prejudice than the one the plaintiff is likely to suffer if his prayer is rejected. In my view, on the facts and in the circumstances, it will be just and convenient to appoint a receiver as prayed for.
46. For the foregoing reasons this application is allowed. The Official Receiver of this Court is hereby appointed the receiver over the suit property. He shall at once take its symbolic possession. He shall collect rent from all the tenants and keep them in a separate account to be opened in any nationalized bank. The third and fourth defendants shall pay all arrears, if any, and current rent for their tenancies to the receiver. The receiver shall pay all statutory dues out of the amounts collected. He shall carry out such repair of the property as is and will be necessary for keeping it safe and in a reasonably good condition. He shall not encumber the property in any manner. He shall not induct any one in any portion of the property without obtaining prior leave from the Court. All necessary expenses shall be defrayed by him from the rent collected. This order shall remain in force till the disposal of the suit.
47. Costs of this application shall be the costs in the suit.
48. Urgent certified xerox copy of this judgment and order may be supplied to the parties, if applied for.