CALTEX (INDIA) LTD. versus BHAGWAN DEVI MARODIA

Citation: [1969] 2 S.C.R. 238 · Decided: 26-09-1968 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Dismissed

Judgment (excerpt)

CALTEX (INDIA) LTD. 
v. 
BHAGWAN DEVI MARODIA 
September 26, 1968 
[S. M. SIKRI AND R. S. BACHAWAT, JJ.J 
Indian Contract Act (9 of 1872), s. 55-Lease of /and-Time as 
essence of contract-Intention if to be clearly stated. 
The respondent leased to the appellant a plot of land for a certain ·~ 
period and stipulated in ·the lease deed that the appellant would give 
A 
B 
notice of renewal of the lease within a certain 
time. The appellant 
C 
made the request for renewal of the lease 12 days after the time fixed. 
The respondent asked the appellant to vacate the premises stating, that 
the request being made1 out of time, was ineffective. 
The appellant filed 
a suit for a declaration. that he was entitled to the renewal, and stated 
that the delay in making the request be excused as (a) it was due to 
oversight; (b) the respondent had not altered her position for the worse 
or to her detriment within the space of 12 days; (c) neither party had 
treated the matter of time as being as the essence of the transaction; (d) 
D 
the appellaot had constructed a service station. for petroleum products of 
immense utility to the public of the locality; and ( e) the appellant was 
in possession of the land. The Court dismissed the suit, and this decision 
was affirmed in appeal. Dismissing the appeal, this Court, 
HELD : The lease fixed a time within which the application for re-
newal was to be made. 
The time so fixed was of essence of the bargain. 
The tenant Jost his ri~ht unless he made the application within the stipu-
E 
lated time. 
Equity will not relieve the tenant from the consequences of 
his own neglect which could well be avoided with reasonable1 diligence. · 
At common law stipulations as to time in a contract giving an option 
for renewal of a lease of land were considered to be of the essence of 
the contract e:ven if the¥ were not expressed to be so and were construed 
as conditions precedent. Equity followed the common. law rule in respect 
'F 
of such contracts and did not regard the stipulation as to time as not of 
the essence of the bargain, the reason being that a renewal of a lease is 
a privilege and if the tenant wishes to claim the privilege; he must do so 
strictly within the time limited for the purpose, [241 D, E] 
With regard to equitable relief against a failure of the tenant to 
give notice of renewal within the stipulated time the relief cannot be 
given in equity save under sp'ecial circumstances such as unavoidable 
G 
accident, fraud, surprise, ignorance, not wilful or inequitable conduct on 
the part of the lessor precluding him refusing to give the renewal. [241 F] 
Grounds (b) ·and (e) stated for the delay could not be regarded as 
special circumstances. As to ground (d) it was not shown that the 
service station was of immense public utility. The fact. that the appel-
lant constructed a service station was an irrelevant consideration. Ground 
(c) was not established.and it was not shown that the time was not the 
H 
essence of the bargain. As to ground (a) there was some evidence to 
show that the delay in giving the notice of renewal was due to over-
sight. But it was not shown th.at the delay was due to any unavoidable 
,.. . 
l 
• 
,_ 
' . 
• 
• 
• 
• 
CALTEX LTD. V. BHAGWAN DEVI (Bachawat, J.) 
239 
A 
accident, excus·able ignorance, fraud or surprise. 
The delay arose from 
mere neglect on the part of the appellant and could have been avoided 
by reasonable diligence. [242 El 
B 
c 
D 
E 
F 
G 
H 
Jamshed Khodaram Irani 
v. 
Durjorji Dhunjihhai, L.R. 43 I.A. 26, 
flare v. Nicoll, [1966] 2 Q.B. 131, 145; Eaton v. Lyon 3 Ves Jun. 690, 
692; Reid & Anr. v. Grave & Ors. 9 L.J.Ch. 245, 248, Ram Lal Dubey v. 
Secretary of State for India, 39 C.L.J. 
314 and Maharani Hemartta 
Kumari Devi v. Safatulla Biswas & Ors. 37 C.W.N. 9, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2347 of 
1966. 
Appeal from the judgment and decree, dated June 3, 1966 
of the Calcutta High Court in Appeal No. 251 of 1965. 
M. C. Chag/a and S. N. Mukherjee, for the appellant. 
S., V. Gupte, M. G. Poddar and D. N. Mukherjee, for the 
respondent. 
The Judgment of the Court was delivered by 
Bachawat, J. 
By an indenture of lease, dated February 17, 
1954 the respondent leased to the appellant a plot of land at pre-
mises No. 22, Jatindra Mohan Avenue, Calcutta, for a term of 
10 years commencing from February 1, 1954. Clause 3(c) of 
the deed provided for a renewal of the lease and was in the fol-
l

Excerpt shown. Read the full judgment & AI analysis in Lexace.