R. KEMPRAJ versus M/S. BARTON SON & CO.

Citation: [1970] 2 S.C.R. 140 · Decided: 29-08-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed
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Judgment (excerpt)

R. KEMPRA.J 
l'. 
MIS. BARTON SON & CO. 
August 29, 1969 
(J, C. SHAH, V. RAMASWAM! AND A. N. GROVER, JJ.j 
Transfer of Property Act, 4 of 1882, s. 14-Lease of premises with 
op1ion to lessee to renew it every ten years--Covena.'lt lvhether offends 
rule against perpetuity. 
A 
B 
The respondent by 'a deed executed in 1951 took on lease from the 
appellant certain premises in Bangalore. 
It was stipulated in the deed 
C 
that the lease would be for a period of 10 years in the first instance with 
an option to the lessee to rcne\V the, san1e every ten years so long as 
desired. 
When in 1961 the first 
period of ten years was 
about to 
expire the respondent asked for a renewal of the lease. 
On the appe11ant 
refusing to do so, the respondent filed a suit for specific performance, 
The suit was decreed by the trial court, the first appellate court and the 
High Court. 
Appeal in this Court was filed by special leave. The con· 
D 
tcntion of the appellant was that the lease in question being in the first 
instance for ten ye.a.rs only \Vas not a lease in perpetuity as contemplated 
by s. 105 of the Transfer of Property Act; however the clauses relating 
to renewal which were covenants that ran with the land offended the rule 
against perpetuity in s. 14 of the Act. 
HELD : The appeal must be dismissed. 
(a) Section 14 of the Act is applicable only where there is transfer 
of property. 
Even if creation of a lease hold interest is a transfer of a 
right in property and would fall within th• expression 'Jransfer ilf- pro-
per:y' the transfer was for a period of ten years only-by means of the 
indenture in the present case. 
The stipulation relating to renewal could 
not be regarded as transferring properly or any rights therein. [143 Bl 
E 
(b) The option of renewal given to the lessee 
did not contain 
a 
F 
covenant which created an interest in the property of the nature 
that 
would fall within the ambit of s. 14. (143 Fl 
Ganesh Sonar v. Purnendu Narayan SinRha & Ors. (1962) Pat. 201, 
applied. 
Woodall v. Clifton, (1905]2 Ch. 257, referred to. 
(c) In English law the court would. give effect to a covenant for 
perpetual renewal so long as the intention is clear and it will not be open 
to objection on the ground of perpetuity. 
In India the equitable n1le 
that the burden of a covenant runs with the land is to be found in s. 40 
of the Transfer of Property Act, but that section itself expressly says that 
the right of the covenantee is not an interest in the land bound by the 
covenant nor an easement. 
It is not ·an interest because the Act does 
not recognise equitable estate. [143 G; 144 F] 
Thus even on the footing that the clauses relating to renewal in the 
lease, in the present case, contained co,·enants running with the land the 
G 
H 
-
A 
KEMPRAJ V. BARTON SON (Gro\'er, !.) 
141 
rule against perpetuity contained in s. 14 of the Act \rould not be applicabk: 
as no interest in property had been created of the nature contemplated in 
the provision. [144 G] 
Muller v. Trafford, [1901]1 Ch. 54, Weg Motors Ltd. v. Ha/es & Ors. 
(19611 3 A.E.L.R. 181, 188 and London & South Wesiern R/y. v. Gomm, 
(1882) 20 Ch. D. 562, 580, referred to. 
B 
C1VIL AP!ELLATE JURISDICTION: 
Civil Appeal No. 1655 
of 1968. 
Appeal by special leave from the judgment and order dated 
December 20, 1967 of the Mysore High Court in Regular Second 
Appeal No. 811 of 1965. 
c 
A. K. Sen, Shyamala Pappu and Vineet Kumar, for the appel-
D 
E 
I 
G 
H 
lant. 
S. V. Gupte, Janendra Lal, B. R. Aganrnla and Kumar M. 
Mehta, for the respondent. 
The Judgment of the Court was delivered by 
Grover, J. 
This is an appeal by special leave from a judgment 
of the Mysore High Court in which the question involved 
i~ 
whether an option given to a lessee to get the lease, which is ini-
tially for a period of 10 years. renewed after every 10 years is hit 
by the rule of perpetuity and is void. 
The respondent entered into a deed of lease on October 26, 
1951 with the appellant in respect of premises Nos. 8 & 9, Ma-
hatma Gandhi Road, (South Parade), Civil Station, Bangalore. 
It was stipulated that the lease would be for a period of 10 years 
in the first instance with effect from November 1, 1961 "with an 
option to the lessee to renew the same as long as desired as pro-
vided". Clauses 9 and 10 which are material may be reproduc-
ed:-
"9. The lessee shall have the right to renew the lease 
of the scheduled premises at the end of the present pe-
riod of
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