RAGHURAM RAO AND ORS. versus ERIC P. MATHIAS AND ORS.

Citation: [2002] 1 S.C.R. 759 · Decided: 30-01-2002 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

) 
RAGHURAM RAO AND ORS. 
A 
v. 
ERIC P. MATHIAS AND ORS. 
JANUARY 30, 2002 
[M.B. SHAH AND R.P. SETHI, JJ.) 
B 
Transfer of Property Act, 1882: 
Section 111 (g)-Lease-Perpetual lease-Partial alienation of leasehold 
.. 
property-Forfeiture clause-Invoking of-Lease deed imposing express C 
prohibition on lessee from alienating the leasehold property-However, no 
express condition restraining partial alienation of property-Held, unless there 
is an express condition restraining partial alienation, forfeiture clause would 
not apply. 
Section 10-Lease-Perpetual lease-Prohibition restraining lessee from 
alienating the leasehold property-Held, not illegal or void. 
D 
Section J J J(g)-Lease-Termination of lease-Notice in writing-
Requirement of-Lease deed executed prior to the coming into force of the 
Transfer of Property (Amendment) Act, 1929-Held, notice in writing not E 
necessary for terminating the lease deed 
Section 1080) and (g)-Lease-Determination of-Partial alienation of 
leasehold property-Suit for possession by transferee of lessor's interest 
invoking forfeiture clause-Legal heirs of the original lessee not made parties 
to the suit-Effect of-Held, privily of contract is between the lessor and F 
lessee and not between the lessor and transferee-For determining the lease 
the lessees were necessary parties-Suit liable to be dismissed for non-joinder 
of necessary parties. 
Practice and Procedure: 
G 
Plea-New plea-Raising of-Perpetual lease-Partial alienation a/-
Provision restraining tenant to sublet or transfer the lease premises-Not 
applicable to tenant having a right to enjoy the premises in perpetuity-Plea 
that lessor not entitled to possession on the ground of partial alienation of 
property-Not raised before High Court-Held, not required to be considered H 
759 
760 
SUPREME COURT REPORTS 
[2002] I S.C.R. 
A by Supreme Court-Karnataka Rent Control Act, 1961-Section 23. 
B 
Words and Phrases: 
'Express condition '-Meaning of in the context of Section 111 (g) of the 
Transfer of Property Act, 1882. 
Original owner of the property in dispute created a permanent lease 
deed with an express condition that the lessee could not have right to 
alienate the leased property and if such alienation was effected the lease 
shall stand cancelled and the possession would be reverted back to the 
lessor. On the death of the lessee there was partial alienation of the 
C ~ieasehold prop~llty between the legal heirs of the lessee through a partition 
suit. Plaintiff. .. respondents transferee of lessor's interest did not invoke the 
forfeiture clause on the ground that the alienations were within the 
members of the family of the deceased lessee. However, when the legal 
heirs of the lessee sold certain portion of the leased property in favour of 
D defendants by various sale deeds, plaintiff-respondents filed suits for 
possession invoking the forfeiture clause. Trial court decreed the suit 
holding that though the lease deed does not specifically prohibit alienation 
of the part of the property but since there was an express condition not 
to alienate the whole leasehold property, portion of the leased property 
could not also be transferred by implication. On appeal, the First Appellate 
E Court held that as there was no condition which prohibits partial alienation 
of the property, it would not give right to the plaintiffs to enforce forfeiture 
clause; that the lessor has to seek the relief mainly against the lessee even 
though the lessee has assigned the property in favour of his assignee as 
by virtue of Section 108 of Transfer of Property Act, 1882, the liability of 
F the lessee would not extinguish by mere reason of such alienation. 
However, on second appeal, High Court set aside the judgment and decree 
passed by the First Appellate Court and held that the plaintiffs were 
entitled to recover the possession of leasehold property and decreed the 
suit accordingly. Hrnce the present appeals. 
G 
Allowing the appeals and setting aside the order of the High Court, 
the Court 
HELD : 1. Unless there is an express condition restraining partial 
"' 
alienation of the leasehold property, it would not be open to the transferee 
of the lessor's right to invoke the forfeiture clause for determining the 
H perpetual lease and such conditions cannot be inferred by implication. 
-
RAGHURAM RAO v. ERIC. P. MATHIAS 
761 
Section 11 l(g) of the Transfer of Property Act itself requires that for A 
forfeiture, lessee shoul

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