Jojy George Koduvath

Abstract

Right of Forfeiture is a Right Arose in Common Law

Section 111, Transfer of Property Act, 1882 says as to forfeiture as to lease. It being based on the common law principles as to justice, equity and good conscience, the principles can be applied to ‘grants’ also; for, (i) the provisions of the Transfer of Property Act are not applicable to ‘grants’ and (ii) no provision of law (as regards grant) stands contrary these principles (Vasudeva Menon v. K.J. Plantation, 2012 (3) KerLT 730).

Section 111, Transfer of Property Act reads as under:

• 111. Determination of lease – A lease of immoveable property determines—
• (a) …  to … (f)
• (g) by forfeiture; that is to say,
  • (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter; or
  • (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or
  • (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event;
• and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease;
• (h) …

Sec.117 of the Transfer of Proper Act provides as follows:

• “117. Exemption of leases for agricultural purposes – None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Government may by notification published in the Official Gazette declare all or any of such provisions to be so applicable in the case of all or any of such leases, together with, or subject to, those of the local law, if any, for the time being in force.
• Such notification shall not take effect until the expiry of six months from the date of its publication.”

The right of forfeiture (for claiming title as owner, by tenant) being a right that arises in common law (that is, on the principles of justice, equity and good conscience (Maharaja of Jaipore  v. Rukmini Pattamahadevi, 46 Ind App 109; AIR 1919 PC 1; Ratan Lal v. Vardesh Chander AIR 1976 SC 588), it can be applied in “agricultural leases” also, if no express prohibition.

KM Joseph, J. held in  Vasudeva Menon v. K.J. Plantation, 2012 (3) KerLT 730 (when he dealt with Sec. 116) as under:

• “Whether the principle of Sec. 116 of the Transfer of Property Act will apply in regard to agricultural lease in view of Sec.117 Act ? …
• … But there we may notice that the principle of Sec. 116 would apply even to agricultural leases on the basis of it embodying principles of equity, justice and good conscience. In this connection we may refer to a Bench decision of the Delhi High Court in Amrit Lal v. Mamleshwar (AIR 1973 Del. 75).”

The relevant passage in Amrit Lal v. Mamleshwar (AIR 1973 Del. 75) reads as under:

• “16. Shri Bindra placed reliance on Section 117 of the Transfer of Property Act which exempts leases for agricultural purposes from the provisions of Chapter V of the Transfer of Property Act. In Anantmal v. Lala, AIR 1964 Raj 88, it was held that the principle underlying Section 116 of the Transfer of Property Act is based upon considerations of equity, justice and good conscience and in the absence of anything to the contrary the provisions are applicable to cases not governed by the Transfer of Property Act. The principles of Section 116 are applicable to leases of agriculture lands. Similarly in Alphanso Pinto v. Thukru Hengsu, AIR 1955 Mad 206, it was held if there is no agreement fixing the terms of a new lease, the terms of the old lease must be deemed to be applicable. Where the tenant holds over after the expiration of the term, he holds subject to all the covenants in the lease which are applicable to the new situation. Therefore, clause 9 must be held to be one of the terms of the tenancy by holding over. The tenancy must be held to be one subject to the covenants in respect of Sardarkhti rights contained in the original lease deed. The rule that principles of equity, justice and good conscience apply to agricultural leases and that the principle contained in Section 116 of the Transfer of Property Act is a principle of equity, justice and good conscience has been enunciated in a number of rulings, for example in
  • Krishna Shetti v. Gilbert Pinto, 2nd 42 Mad 654 (AIR 1919 Mad 12),
  • Gangamma v. Phommakka, (1910) 33 Mad 253,
  • Mt. Kesarbai v. Rajabhau Sadasheo Rao, AIR 1944 Nag 94, 
  • Nanjappa Goundan v. Rangaswami Gounda, AIR 1940 Mad 410, 
  • Moore v. Makhan Singh, Air 1919 Pat 254,
  • Eayo George v. Kacki Muthaliyar, AIR 1953 Trav-Co 299, 
  • Bainani Properties Private Ltd. v. M. Gulamali Abdul Hossain and Co., and
  • Namdeo Lokman Lodhi v. Narmadabai, AIR 1953 SC 228.)”

Forfeiture on Claim of Ownership By ‘Grantee’

There is no specific provision for forfeiture of grant for claiming ‘title as owner’, by grantee (similar to the forfeiture of tenancy for claiming ‘ownership’ by a tenant under Sec. 111(g) of the TP Act).

Will claim of ownership (over the granted-property) by grantee amount to forfeiture?

The answer is – Yes. Following are the reasons:

• 1. Applying the Principles of ‘Forfeiture of Tenancy’ it being on principles on justice, equity and good conscience. The right of forfeiture (for claiming title as owner, by tenant, under Sec. 111(g), TP Act) is a right that arises in common law (that is, on the principles of justice, equity and good conscience (Maharaja of Jaipore  v. Rukmini Pattamahadevi, 46 Ind App 109; AIR 1919 PC 1; Rattan Lal v. Vardesh Chander AIR 1976 SC 588).
• 2. Analogy to Holding-over in Agricultural lease. The right of ‘holding over’ on termination of lease (if lessor accept rent even after termination of the lease period) is provided under Sec. 116 of the TP Act. Though Sec. 117 of the TP Act exempts ‘leases for agricultural purposes’ (from the whole Chapter), it is pointed out in a good number of decisions that the principles thereof (holding over) would apply to agricultural leases also, if no express prohibition, for it contains the principles of justice, equity and good conscience. (See: Amrit Lal v. Mamleshwar, AIR 1973 Del. 75.)
• 3. Analogy to Forfeiture (itself) in Agricultural lease. Agricultural leases, being specifically exempted in Sec. 117 (it may be argued), the principles on justice, equity and good conscience may not apply to them as regards forfeiture (under Sec. 111). But, the principles thereon definitely apply to grants, for it is not governed by the TP Act (See: Namdeo Lokman Lodhi v. Narmadabai, AIR 1953 SC 228.)

Grants Act, 1895 and Eviction of tenants from Govt. Lands

By the advent of the Grants Act, 1895, provisions of the TP Act were not applicable to govt. lands. Therefore, (i) no statutory notice – under Sec. 106 TP Act – was necessary for evicting tenants from Govt. lands; (ii) no bar to apply the provisions in Sec. 111 (g) of the TP Act to invoke forfeiture provision (for claiming title or violating any provision in the agreement) with respect to agricultural tenancy lands owned by Govt.; for, the right of forfeiture is a right that arises in common law (that is, on the principles of justice, equity and good conscience (Maharaja of Jaipore  v. Rukmini Pattamahadevi, 46 Ind App 109; AIR 1919 PC 1; Rattan Lal v. Vardesh Chander AIR 1976 SC 588).

Note: Grants Act apply to all States except to the “Part B States”. Under States Reorganisation Act, 1956, Part B states were Patiala and East Punjab States Union (PEPSU), Hyderabad, Jammu and Kashmir, Travancore-Cochin. Madhya Bharat, Mysore, Rajasthan, and Saurashtra.

Read Blog: Grant in Property Law

Should Notice Similar to S. 111(g) Necessarily be Issued to Grantees

“Notice in writing to the lessee of his intention to determine the lease” is essential under Sec. 111(g) (on their claiming title). Whether it is required to be issued to (i) agricultural tenants and (ii) grantees on forfeiture of tenancy/grant (on their claiming title)?

The answer is, No.

The potential argument in favour ‘notice in writing is essential’ is the following –

• The notice in writing under Sec. 111(g) of the TP Act embodies a principle of justice, equity and good conscience and therefore there can be no forfeiture unless notice in writing is given to (i) agricultural tenants and (ii) grantees though the statutory provisions of the Transfer of Property Act are not made applicable to such transactions.

But, the following are pointed out (in various decisions) in support of the view that no written notice is needed in cases of (i) agricultural tenants and (ii) grantees –

• This provision was introduced by 1929 Amendment only.
• This provision was not in force in English law.
• Institution of suit itself is a notice to (i) agricultural tenants, (ii) grantees, etc.
• It is not equitable to argue that a tenant or grantee, who wilfully forfeited the transaction, is entitled for a notice, on principles of equity.

Plantation activity is not a simple “agriculture” activity

There are ever so many decisions of our courts saying that that plantation activity is a business activity and it is not simple “agriculture” activity (that falls under Sec. 117 TP Act). See:

• AIR 2001 SC 2672,
• 2016(8) JT 287; 2016 (7) SCALE 4,
• 2018(1) Ker LT 84,
• 2016(3) Ker LT 592,
• 1999(3) Ker LT 300.

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