KRISHNA SHETTI ALIAS KRISHNAYYA (DECEASED) Vs. GILBERT PINTO

JUDGEMENT

(1.) This is a Letters Patent appeal from the decision of Sadasiva Aiyar, J., who held (Bake-well, J. dissenting), that the court has power to relieve against a provision in a mulgeni or permanent lease, a form of agricultural lease in use in South Canara for re-entry by the landlord on breach of a covenant or condition against any alienation by the lessee of his mulgeni right except in the manner therein provided. The lease, which is inartistically drawn, provides in substance that, if the lessee or his representatives have to sell or mortgage their mulgeni right, they are first to give a written notice to the lessor or his heirs, and, if they fail to act on it or to reply thereto, the lessee is to be free to make the alienation, but that alienations in contravention of these provisions are to be void, and the lessor is to be at liberty to re-enter and enjoy the land inclusive of improvements. This we read as meaning that the lessee is to give notice to the lessor of the terms of any transaction which he proposes to effect by way of sale or mortgage of his mulgeni right, and that the lessor is then entitled to become himself the purchaser or mortgagee on those terms, and as in fact conferring a right of pre-emption.

(2.) Two question arise in the case whether the court has any general jurisdiction to relieve in a case of this kind, and if not, whether such jurisdiction has been conferred upon it by the amendment to Section 74 of the Indian Contract Act.

(3.) As regards the first question, it is well settled that a court of equity could not relieve against a right of re-entry or forfeiture under any provision or stipulation in a lease for a breach of any covenant in the lease except the covenant for payment of rent. The history of this question is most lucidly explained by Kay, L.J., in Barrow v. Isaacs and Son (1891) 1 Q.B. 425 : " Courts of Equity " he says "assumed jurisdiction to relieve against forfeitures and penalties where the only object was to secure payment of a definite sum of money, even though there was no fraud, accident, surprise or mistake. On this principle it relieved against the payment of the whole penalty on a money bond before the Statutes of 4 and 5 Anne Ch. XVI Sections 12, 13 and 8 and 9 Wm. 3, C, 11, which enabled the courts of law to give the same relief. Also against forfeiture for non-payment of rent, and by statute 4 Geo.2 C. 28, its powers in this respect were somewhat restricted by limiting the time for their exercise to six months after execution in ejectment. At first there seems to have been some hesitation whether this relief might not be extended to other cases of forfeiture for breaches of covenants such as to repair, to insure and the like where compensation could be made, but it was soon recognised that there would be great difficulty in estimating the proper amount of compensation and since the decision of lord Eldon in Hill v. Barcklay (1811) 18 Ves. 56 it has always been held that equity would not relieve merely on the ground that it could give compensation upon breach of any covenant in a lease except the covenant for payment of rent. But of course this left unaffected the undoubted jurisdiction to relieve in case of breach occasioned by fraud, accident, suprise or mistake."