2021 INSC 0512
              REPORTABLE
   IN THE SUPREME COURT OF INDIA
   CIVIL APPELLATE JURISDICTION
    CIVIL APPEAL NOS.5117­5118 OF 2021   
(Arising out of SLP(Civil) Nos. 879­880/2016)
The State of Kerala & Ors.                .…Appellant(s)
Versus
M/s Joseph & Company                   ….  Respondent(s)
With
CIVIL APPEAL NO.5120/2021 @ SLP(C) No.9661/2017
CIVIL APPEAL NO.5119/2021 @ SLP(C) No.18760/2016
J U D G M E N T
A.S. Bopanna,J.
   
 1.      Leave granted.
2. The   appellant­State   of   Kerala   is   assailing   the   order
dated   10.07.2015   passed   by   the   High   Court   of   Kerala   at
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Ernakulam   in   W.A.   No.369/2011   and   W.A.   No.   375/2011.
The   said   appeals   had   arisen   out   of   the   proceedings   in   Writ
Petition   No.1207/2005   wherein   through   the   order   dated
17.01.2011,   the   petition   was   disposed   of   to   the   extent   of
quashing the order declining value of usufructs (Ex.41). The
order   (Ex.39)   by   which   the   lease   in   favour   of   Respondent
had been terminated was upheld. It is in that view, the writ
petitioner­M/s. Joseph  & Company  as  also the  respondent­
State of Kerala had filed the Writ Appeals to the extent they
were   aggrieved.   The   learned   Division   Bench   of   the   High
Court   through   the   impugned   order   dated   10.07.2015   has
allowed the appeal filed by M/s. Joseph & Company, thereby
setting aside the order terminating the lease and the appeal
filed by State of Kerala was dismissed. It is in that light, the
appellant­State   of   Kerala   claiming   to   be   aggrieved   is   before
this court. 
3. The   genesis   of   the   case   is   that   erstwhile   Travancore­
Cochin   Government   had   by   a   notification   in   the   year   1953
auctioned   certain   abandoned   portions   of   Beatrice   estate.
One   Mr.   P.I.   Joseph­responded   to   the   said   notification   and
offered his bid to an extent of 246.26 acres out of the South
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Block and took possession on 10.05.1955. However, no lease
agreement   was   entered   into   between   him   and   the
government.   In   the   meanwhile,   the   said   Mr.   P.I.   Joseph
assigned   the   said   property   in   favour   of   Mr.   K.K.   Joseph.
Pursuant to such transaction dated 28.02.1974 between Mr.
P.I. Joseph and Mr. K.K. Joseph, the Government of Kerala,
executed a lease deed dated 15.12.1979 in favour of Mr. K.K.
Joseph. Though the lease deed was executed in favour of Mr.
K.K.   Joseph,   it   is   contended   by   the   lessee   that   Mr.   K.K.
Joseph   was   representing   the   partnership   firm   registered   in
the   name   and   style   M/s.   Joseph   &   Company,   of   which   he
was the Managing Partner. 
4. The   said   Mr.   K.K.   Joseph   thereafter   executed   a
registered sale deed dated 16.12.1983 transferring an extent
of   50   acres   from   the   land   leased   in   his   favour,   to   one   Mr.
Raghavan. Subsequent thereto, Mr. K.K. Joseph is stated to
have retired from the partnership firm after which Ms. Meera
Scaria   had   become   the   Managing   Partner   representing   the
firm.   The   said   Ms.   Meera   Scaria   as   the   Managing   Partner
had   addressed   a   letter   dated   26.06.1990   seeking   leave   to
rectify the defect of transferring a portion of the lease land to
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Mr.   Raghavan.   The   said   request   had   not   been   considered
since the government  through  their  letter  dated 27.05.1989
had   indicated   the   intention   to   terminate   the   lease.
Subsequent   thereto   the   notice   dated   19.02.1992   intimated
the   lessee   about   the   order   to   terminate   the   lease   and   to
prepare the inventory to take over possession. 
5.      But the same was kept in abeyance as certain events of
a general consideration regarding regularisation of all leases
in   the   area   was   under   process.   However,   said   process   had
come to an end on 26.02.1999 whereby the government had
cancelled   its   earlier   proposal   of   a   general   regularisation
which   was   under   consideration.   In   that   background,   the
notice   dated   15.11.1999   was   issued   to   Mr.   K.K.   Joseph   to
show   cause   why   the   lease   in   respect   of   the   whole   area   of
246.50   acres   should   not   be   terminated   as   contemplated
under clause 14 of the lease deed. Mr. K.K. Joseph replied to
the same on 29.11.1999 indicating that he has retired from
the   partnership   firm   and   that   Ms.   Meera   Scaria   is   the
present   Managing   Partner   who   is  to   be  notified.   In  the   said
process, the first round of litigation commenced challenging
the   action   of   the   State   Government   to   terminate   the   lease.
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The   Writ   Petitions   bearing   O.P.   No.   20508/2002   and   O.P.
No.   30224/2002   filed   by   M/s.   Joseph   &   Company   and   Mr.
Raghavan   respectively   were  set  in  motion.   The said  process
after the Writ Appeal had resulted in the proceedings before
this   Court   in   C.A.   No.   4169/2004.   This   Court   through   the
order   dated   16.07.2004   permitted   the   appellant­State   of
Kerala to  issue fresh  show  cause notice regarding  proposed
termination  of   lease  and   the  respondents   were   permitted   to
file   their   reply   to   the   show   cause   notice.   In   the   above
background,   the   present   round   of   proceedings   commenced
with   the   issue   of   the   notice   dated   29.07.2004   and
conclusion of the process. 
6 . In the said notice the appellant­State of Kerala referred
to two aspects to allege breach of terms of the lease. The main
aspect alleging breach is in relation to entire leased property.
It   is   alleged   that   Mr.   K.K.   Joseph   had   transferred   his
leasehold   right   to   M/s.   Joseph   &   Company   without   the
approval of the lessor with the intention to nullify the effect of
clause 14 of the lease deed and he has thereafter retired from
the firm in 1988. The other aspect alleging breach of the term
is   that   an   extent   of   the   leased   land   measuring   50   acres   has
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been sold without consent of the lessor, to one Mr. Raghavan.
It   is   in   the   said   premise,   the   lease   was   sought   to   be
terminated.   The   respondent­M/s.   Joseph   &   Company
submitted a detailed reply dated 14.08.2004 seeking to justify
their   action   and   to   contend   that   they   had   not   committed
breach   of   the   terms   of   lease   deed.   The   respondent   was   also
provided   the   opportunity   of   hearing,   pursuant   to   which   an
order dated 26.11.2004 was passed whereby the termination
of the lease in respect of the entire extent measuring  246.26
acres of reserve forest land was confirmed. 
7 . The   respondent   being   aggrieved   by   the   same   had
preferred   the   Writ   Petition   as   indicated   supra.   The   learned
Single Judge did not interfere with the order terminating the
lease   and   the   writ   petition   was   dismissed   to   that   extent.
Insofar as the aspect relating to the breach alleged regarding
the transfer of lease to M/s. Joseph & Company by Mr. K.K.
Joseph,   the   various   circumstances   were   referred   more
particularly  the documents which  were at exhibits P10, P11,
P12, P13 and P16 to P20 to indicate that the government had
for all intents and purposes treated M/s. Joseph & Company
as   the   lessee   under   the   lease   deed   which   was   Exhibit   P7   to
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the   Writ   Petition.   However,   in   respect   of   the   transfer   of   50
acres in favour of Mr. Raghavan, the learned Judge was of the
opinion   that   the   finding   relating   to   breach   due   to   such
transaction being a finding of fact, did not call for interference
in the Writ Petition.  
8 . The   learned   Division   Bench   had   negatived   the
challenge   to   the   first   part   by   the   State   of   Kerala   and   the
conclusion   of   the   learned   Single   Judge   that   M/s   Joseph   &
Company   is   the   lessee   was   held   to   be   valid   and   was   not
interfered.   Further,   insofar   as   the   sale   in   favour   of   Mr.
Raghavan,   the   learned   Division   Bench   had   taken   note   of
Clause 12 contained in the lease deed between the appellant­
State   of  Kerala  and   M/s  Joseph   &  Company   which   provided
that   the   default   if   any   committed   could   be   remedied   if   the
lessee   is   put   on   notice.   The   default   can   be   confirmed   only   if
the same is not remedied despite notice. It is in that view, the
learned Division Bench was of the view that the requirement
in   Clause   12   of   the   lease   agreement   had   not   been   complied
with   by   the   appellant­State   of   Kerala.   Therefore,   the   learned
Division Bench set aside the order terminating the lease.
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9 . We   have   heard   Mr.   Jaideep   Gupta,   learned   senior
counsel for the appellant­State of Kerala, Mr. Joseph Markos,
learned   senior   counsel   and   Mr.   Thomas   P   Joseph,   Learned
Senior   Advocate   on   behalf   of   the   respondents   and   perused
the   appeal   papers   including   the   writ   appeal   records   which
had been secured from the High Court.
10 . On   the   first   aspect   relating   to   the   breach   alleged   in
view   of   the   transfer   of   lease   in   favour   of   M/s   Joseph   &
Company  by  Mr. K.K. Joseph­the lessee, Mr. Jaideep Gupta,
learned senior  counsel has taken us through  the documents
to   indicate   the   sequence   that   the   property   in   fact   was
auctioned   in   favour   of   Mr.   P.I.   Joseph   who   had   transferred
the   lease   in   favour   of   Mr.   K.K   Joseph   through   the   sale   deed
dated 28.02.1974. Though the government has subsequently
validated   the   said   transaction   by   executing   a   lease   deed   in
favour   of   Mr.   K.K.   Joseph,   the   subsequent   transfer   by   Mr.
K.K Joseph to M/s Joseph & Company, a new lessee without
prior   consent   of   the   government   would   constitute   breach   is
his contention. 
11 . Having   noted   the   contention,   we   find   that   the   said
issue need not detain us for long. At the outset, a perusal of
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the lease deed dated 15.12.1979 would no doubt disclose that
Mr.   K.K.   Joseph   in   his   individual   name   is   referred   to   as   the
lessee of the other part.  The recital in the lease deed however
depicts   that   the   earlier   transaction   in   favour   of   Mr.   P.I.
Joseph   and   the   document   executed   by   Mr.   P.I   Joseph   in
favour of Mr. K.K Joseph to assign the lease is referred in the
document.   In   that   backdrop,   a   reference   to   the   sale   deed
dated   28.02.1974   by   which   the   sale   was   made   by   Mr.   P.I.
Joseph   to   Mr.   K.K.   Joseph   indicates   that   the   purchaser   Mr.
K.K.   Joseph   has   been   described   as   the   Managing   Partner,
M/s   Joseph   &   Company,   a   registered   partnership   firm.   The
said aspect would   ex­facie   indicate that the contention of the
appellant   that   M/s   Joseph   &   Company   had   come   into
existence subsequently  as a ploy  to overcome and defeat the
bar   contained   in   Clause   14   to   the   lease   deed   cannot   be
accepted.   Further,   as   already   taken   note,   the   learned   Single
Judge as also the learned Division Bench has referred to the
various   other   documents   more   particularly   at   Exhibits   P10,
P11, P12, P13 and P16 to P20 in the writ proceeding records
to indicate that the Government, for all intents and purposes
had treated M/s. Joseph & Company as the lessee. Therefore,
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to   the   said   extent   on   the   first   aspect,   the   same   does   not
constitute breach. Hence the conclusion reached by the High
Court on that aspect does not call for interference. 
12 . The next aspect which arises for consideration is as to
whether the sale to an extent of 50 acres from out of the lease
area would amount to breach of clause 14 of the lease deed.
For   better  appreciation,   it  would  be  appropriate  to   take  note
of   Clause   12   and   14   in   the   lease   deed   dated   15.12.1979,
which have been referred. The same read as hereunder: ­
“12.   In   the   event   of   the   lessee   making   default   in   the
observance   of   fulfillment   of   any   of   the   covenants   herein
contained   the   Lessor   shall   be   at   liberty   at   any   time,
thereafter,   after   giving   notice   to   the   lessee   and   hearing
him   in   person   or   through   his   agent   or   vakil   duly
appointed about  the failure of the lessee to remedy  such
default   that   may   be   reported   to   the   Lessor   from   time   to
time by the Chief Conservator of Forests, to terminate the
lease   and   lessee   shall   forthwith   vacate   the   land   hereby
leased   and   demised   and   notwithstanding   such
termination of this lease, the lessee shall be liable for any
loss   which   the   lessor   may   sustain   by   reasons   of   such
default   and   all   such   improvements   made   by   the   Lessee
on   the   land   hereby   leased   and   demised   as   exist   at   the
time   of   vacating   the   same   must   be   left   intact   and   no
compensation   can   be   claimed   by   the   lessee   for   such
improvements.”
“14.   The   lessee   shall   not   be   entitled   to   sublet   or   assign
his   interest   in   the   said   lease   except   with   the   previous
permission in writing of the lessor.” 
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13 . From   a   perusal   of   the   relevant   clauses   in   the   lease
deed   it   is   seen   that   clause   14   thereof   provides   that   the
lessee shall not be entitled to sublet or assign his interest in
the said lease except with the previous permission in writing
obtained   from   the   lessor.   In   that   backdrop,   the   breach
alleged   against   the   respondent   is   that   the   lessee   has
assigned   the   interest   in   the   leased   land   to   an   extent   of   50
acres   in   favour   of   Mr.   Raghavan   without   the   previous
permission   of   the   lessor.   The   fact   that   such   sale   has   taken
place   cannot   be   in   dispute   nor   is   it   in   dispute.   The   said
assignment   has   been   made   under   the   registered   sale   deed
dated   16.12.1983.   The   question   therefore   is;   whether   the
same would constitute breach of the terms in the lease deed
so as to entail termination of the lease. 
14 . Mr. Joseph Markos, learned senior counsel contended,
though   such   sale   deed   was   executed,   the   possession   of   the
property had not been handed over to Mr. Raghavan and the
lessee   M/s.   Joseph   &   Company   had   continued   to   pay   the
lease   rentals   in   respect   of   the   entire   property.   It   was   next
contended   that   even   assuming   that   the   execution   of   the
document had constituted default, the lessee ought to have
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been   notified   to   remedy   such   default   and   only   if   the   same
was not done, the lease could be terminated. In that regard,
the   learned   senior   counsel   contended   that   the   lessee   had
submitted a letter to the government on 17.03.1990 seeking
to rectify the default and if the same was accepted in terms
of   Clause   12,   the   breach   contemplated   in   Clause   14   would
not   survive.   It   is   his   further   contention   that   the   right   to
forfeit   the   lease,   in   the   present   circumstance,   would   fall
under Section 111(g) of the Transfer of Property Act (‘TP Act’
for   short)   which   calls   for   strict   construction   against   the
lessor.   In   that   event   the   termination   of   the   entire   lease
would   not   be   sustainable   for   breach  in   respect  of   a   portion
of the leased land. Reference is also made to Section 112 of
the  T.P.  Act to  contend that  the acceptance  of lease rentals
by   the  lessor,  including  for   the  said  extent  of  50  acres  sold
to Mr. Raghavan would constitute waiver of forfeiture.
15 .  While   taking   note   of   the   contention   on   behalf   of   the
respondent­M/s.   Joseph   &   Company   regarding   the   benefit
available   to   them  under   Clause  12   of   the   lease   deed   which
had   not   been   complied   by   providing   an   opportunity   to
remedy   the   default,   it   is   necessary   to   note   as   to   whether
Page  12  of  33

such benefit is available to rectify the breach alleged under
Clause 14 of the lease deed as well and whether Clause 12
makes it mandatory to issue notice to rectify before action is
taken.   In   order   to,   gather   the   intention   of   the   parties,   the
nature   of   the   transaction   and   the   document   as   a   whole   is
necessary   to   be   considered.   While   on   this   aspect,   what   is
striking to be noted is that the word employed in Clause 12
is ‘default’ and not  breach. If this  aspect  is taken  note  and
the   remaining   terms   contained   in   the   lease   deed   are   taken
note,   keeping   in   view   the   admitted   position   that   the   leased
land   is   situate   in   a   reserve   forest,   the   clauses   in   the
agreement   commencing   from   clause   No.   5   to   11   indicates
that   the   right   reserved   by   the   lessor   and   the   obligations
imposed on the lessee are with regard to the compliance, to
retain   the   characteristics   of   forest   area   and   continue   such
other   activities   including   collection   of   minor   forest   produce
and   the   forest   officials   have   been   granted   the   right   to
regulate   the   same   notwithstanding   plantation   was   the
permitted use. 
16 . If in that context, Clause 12 is taken note, it indicates
that   the   issue   of   notice   is   contemplated   in   the   event   of   the
Page  13  of  33

lessee   committing   default   and   the   liberty   to   terminate   the
lease   is   exercised.   The   concession   provided   is   to   rectify   the
default   before   the   notice   is   issued.   If   there   is   failure   of   the
lessee   to   remedy   such   default   that   may   be   reported   to   the
lessor from time to time by the Chief Conservator of Forests.
Before  termination  of the  lease a  notice  is  to  be  issued  and
be   heard   about   the   default   if   the   default   has   not   been
remedied.   The   same   would   clearly   indicate   that   the   default
referred to, the issue of notice there for and the fact that the
same   is   based   on   the   report   to   the   lessor   (State   of   Kerala)
from   Chief   Conservator   of   Forests   is   that   the   rectification
permitted   is   in   respect   of   the   default   relating   to   deviation
from   the   obligations   contained   in   the   covenants   relating   to
maintaining   the   nature   of   the   property   and   default   should
be of rectifiable nature. The Dictionary meaning of   ‘default’
is;   failure   to   fulfil   an   obligation,   while   the   meaning   of
‘breach’   is   an   act   of   breaking   a   law,   agreement   or   code   of
conduct. If the said distinction is kept in view, the breach if
committed by  subletting  or  assigning   as provided in  Clause
14, the same would lead to its consequences and the liberty
to   remedy   the   same   is   not   mandatory.     All   that   Clause   12
Page  14  of  33

signifies   is   that   if   default   is   reported   and   if   such   default   is
not   remedied   then   termination   can   be   made   after   issue   of
notice   and   hearing.     The   cause   for   termination   will   be   the
default   and   permitting   to   remedy   the   same   is   only   an
indulgence   to   be   shown.   Therefore,   the   learned   Division
Bench was not justified in its conclusion that the non­issue
of   notice   and   not   providing   opportunity   to   remedy   the
default is fatal. In the instant facts, the reading of the lease
deed as a whole would indicate that the right reserved to the
lessor   under   Clause   14   is   independent   of   Clause   12   and   if
the breach of that nature   occurs, it is irreversible and it will
have   to   be   taken   to   its   logical   conclusion   unless   the   lessor
waives the right thereunder.
17 . For better appreciation on the legal contention, we take
note of Section 111(g) and Section 112 of the T.P. Act which
was referred.  They read as hereunder: ­ 
“ 111.   Determination   of   lease   —   A   lease   of   immoveable
property determines—
(a) xxxxxxx
(b) xxxxxx
(c) xxxxxx
(d) xxxxxxx
(e) xxxxxxx
(f) xxxxxxxx
Page  15  of  33

(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   re­enter ;   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 re­enter 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;
112.   Waiver   of   forfeiture   —A   forfeiture   under   section
111, clause (g) is waived by acceptance of rent which has
become   due   since   the   forfeiture,   or   by   distress   for   such
rent, or by any other act on the part of the lessor showing
an intention to treat the lease as subsisting: 
Provided that the lessor is aware that the forfeiture
has been incurred: 
Provided also that, where rent is accepted after the
institution   of   a   suit   to   eject   the   lessee   on   the   ground   of
forfeiture; such acceptance is not a waiver.”
18 . The   contention   of   the   learned   senior   counsel   for   the
respondent   that   a   question   of   law   could   be   raised   at   any
stage is well taken and we do not see the reason to refer to
the   precedents   relied   on   that   proposition.   Even   that   be   so,
the provisions contained in Sections 111 and 112 of the T.P.
Act   though   taken   note,  in   our   opinion,   the   same  cannot   be
considered   in   abstract   without   reference   to   the   factual
foundation.   So   far   as   the   contention   that   the   lessee   had
continued   to   pay   the   lease   rentals   in   respect   of   the   entire
property   despite   the   sale   of   50   acres   to   Mr.   Raghavan,
whether   such   acceptance   of   the   lease   rentals   by   the   lessor
Page  16  of  33

was with knowledge of default by condoning the breach, is a
question   of   fact   which   will   have   to   be   urged   in   the   original
proceedings   and   the   material   will   have   to   be   placed   on
record   so   as   to   enable   the   original   authority   to   take   a
decision on that aspect and render a finding on fact so that
the   Court   at   a   later   stage   in   the   process   of   judicial   review
can   reassess   the   same   and   determine   as   to   whether   the
benefit of Section 112 T.P.Act will be available. Therefore, in
the   instant   case,   the   contention   that   the   lease   rentals  were
being paid in respect of the entire extent cannot be accepted
outright   as   no   contention   was   urged   and   details   were   not
laid   in   the   original   proceedings.   Further,   in   a   matter   of   the
present   nature   when   the   entire   lease   area   measured   vast
extent   of   246.26   acres   and   the   allegation   is   of   parting   with
the lease hold right of 50 acres from such lease area and in
that   circumstance   when   the   lease   rental   in   any   event   was
being   paid   to   the   remaining   extent   of   196.26   acres,   the
lumpsum   payment   of   lease   rental   cannot   be   taken
advantage of to contend that the lease rental was continued
to be paid and seek waiver of forfeiture.
Page  17  of  33

19 . When   there   was   breach   providing   the   right   to
terminate the lease in respect of the entire leased land, even
if   the   lease   rental   paid   by   the   lessee   has   been   accepted   by
the   appellant­lessor,   it   has   not   been   shown   that   the
requirement of the conditions in the proviso to Section 112
of the T.P. Act is satisfied. In the present situation, the land
is   leased   by   the   government   and   when   the   breach   had
occurred the competent authority had issued the notice and
the   proceedings   was   initiated.   Once   the   proceedings   had
been initiated even if the lease rental was received the same
is  saved  under  the  second  proviso.  Further  the  situation  is
also that the payment of the rental made to the government
would   in   any   event   be   accepted   as   different   functions   are
performed by different offices and any amount tendered will
be   received.   That   cannot   give   any   advantage   to   the   lessee
merely   because   the   rent   has   been   tendered   in   the
government   office   and   the   same   has   been   innocuously
accepted without there being specific reference to waiver. 
20 . On   the   question   of   waiver,   it   would   be   profitable   to
refer   to   the   decision   of   this   court   in   the   case   of   Sarup
Page  18  of  33

Singh   Gupta   vs.   S.   Jagdish   Singh   and   Others   (2006)   4
SCC   205   wherein   the   contention   relating   to   waiver   due   to
acceptance of rent was considered, though in the context of
Sections 111(h) and 113 of the T.P. Act, wherein it was held
as hereunder: ­
“6.       Learned Senior Counsel also relied upon a decision
of   a   learned   Single   Judge   of   the   Calcutta   High   Court,
reported in AIR 1926 (Calcutta) 763, wherein It was held
that   where   rent   is   accepted   after   the   notice   to   quit,
whether   before   or   after   the   suit   has   been   filed,   the
landlord thereby shows an intention to treat the lease as
subsisting   and,   therefore,   where   rent   deposited   with   the
Rent Controller under the Calcutta Rent Act is withdrawn
even after the ejectment suit is filed, the notice to quit is
waived.   In   our   view,   the   principle   laid   down   in   the
aforesaid judgment of the High Court is too widely stated,
and cannot be said to be an accurate statement of law.  A
mere perusal of   Section 113   leaves no room for doubt
that   in   a   given   case,   a   notice   given   under   Section
111 ,   Clause   (h),   may   be   treated   as   having   been
waived,   but   the   necessary   condition   is   that   there
must be some act on the part of the person giving the
notice   evincing   an   intention   to   treat   the   lease   as
subsisting.   Of  course,  the   express  or  implied   consent
of the person to whom such notice is given must also
be established. The question as to whether the person
giving the notice has by his act shown an intention to
treat  the   lease   as  subsisting   is   essentially   a   question
of fact. In reaching a conclusion on this aspect of the
matter, the Court must consider all relevant facts and
circumstances,   and   the   mere   fact   that  rent  has  been
tendered and accepted, cannot be determinative.
7.     A   somewhat   similar   situation   arose   in   the   case   in
Shanti   Prasad   Devi   v.   Shankar   Mahto.   That   was   a   case
where   the   landlord   accepted   rent   even   on   expiry   of   the
period of lease. A submission was urged on behalf of the
tenant in that case that   Section 116 ,   Transfer of Property
Act   was attracted and there was a deemed renewal, of the
Page  19  of  33

lease.   Negativing   the   contention,   this   Court   observed
that   mere   acceptance   of   rent   for   the   subsequent
months   in   which   the   lessee   continued   to   occupy   the
premise   even,   after   the   expiry   of   the   period   of   the
lease,   cannot   be   said   to   be   a   conduct   signifying   his
assent   to   the   continuing   of   the   lease   even   after   the
expiry   of   the   lease   period.   Their   Lordships   noticed
the   conditions   incorporated   in   the   agreement   itself,
which provided for renewal of the lease and held that
those   conditions   having   not   been   fulfilled,   the   mere
acceptance   of   rent   after   expiry   of   period   of   lease   did
not signify assent to the continuance of the lease.”
                                           (Emphasis supplied)
In   that   view,   the   waiver   as   contended   by   the   learned   senior
counsel for the respondent­lessee is unsustainable.
21 . That apart, the contention that the lessee­ M/s. Joseph
& Company had continued in possession of the said extent of
50   acres   even   after   sale   and   therefore   there   is   no   default
cannot   be   accepted   for   more   than   one   reason.   To   decipher
this   aspect,   a   perusal   of   the   sale   deed   dated   16.12.1983
which was produced as exhibit R3(b) in the writ proceedings
would indicate the relevant recitals as follows: ­ 
“I   have   absolute   right   to   sell   the   property   in   the
schedule.   I   have   decided   to   sell   you   50   acres   of   the
land   in   the   schedule   below   along   with   the   right   to
travel   through   the   rest   of   the   land   in   my   possession.
The   amount   decided   as   the   price   of   he   said   land   is   Rs.
45000.   Having   received   the   full   payment   of   Rupees
forty   five   thousand,   I   give   you   absolute   right   and
possession   over   the   aforesaid   land   in   the   schedule
Page  20  of  33

along   with   the   rights   of   transportation   through   the
rest of the property . 
The property described in the schedule below belongs
to   the   Cochin   Government   and   I   have   leasehold   right   over
the same. 
From today on I have no objection in you keeping
in   possession   and   enjoying   the   absolute   right   of   the
property   described   in   the   schedule   together   with   the
right of  transport.   Hereon you shall pay the lease rent
directly   to   the   Government.   All   taxes   to   the
Government may henceforth be paid by you.  Myself, the
company   or   any   of   our   successors   may   have   no   right
over schedule property. 
I   affirm   that   I   will   not   obstruct   your   travelling
through   the   rest   of   Beatrice   Estate.   By   this   deed   you
have   the   right   to   avail   yourselves   of   the   right   to   such
transport.  
I hereby assure you that I have the right for the sale of
this property and that there are no arrears of lease rent due
to the Government as any other dues or attachment of civil or
revenue nature relating to the property and in case any loss
is sustained by the purchaser  against this assurance. I shall
be responsible for such loss.”
      (Emphasis supplied)
 
22 . A   perusal   of   the   extracted   portion   from   the   sale   deed
dated   16.12.1983   would   indicate   the   outright   nature   of   sale
of   a   portion   of   the   leased   land.   It   is   sold   for   a   sale
consideration despite knowing that the property belonging to
the   government   is   granted   under   lease.   The   recital   in   fact,
categorically indicates that the absolute right and possession
has   been   given   and   it   has   also   been   stated   therein   that
henceforth   the   purchaser,   Mr.   Raghavan   is   to   pay   the   lease
rent   directly   to   the   government   and   all   taxes   to   the
Page  21  of  33

government   are   also  to  be  paid   by   him.  Further,  neither   Mr.
K.K.   Joseph   nor   the   partnership   firm   has   retained   any   right
over   the   property   sold   under   that   document.   Therefore,   the
document   itself   would   indicate   the   intention   of   the   parties
and also the fact that possession was parted without consent
of   the   lessor   which   was   a   clear   breach   of   Clause   14   in   the
lease deed.
23 . In   addition,   in   the   reply   dated   29.11.1999   from   Mr.
K.K.   Joseph,   to   the   notice   dated   15.11.1999   from   the
Divisional Forest Officer, he has stated that even after he had
retired from the firm, the firm was pursuing its efforts to get
the said 50 acres assigned to Mr. Raghavan, reassigned to the
firm   and   thereby   remedy   the   default   as   contemplated   in
Clause 12 of the lease deed. Therefore, the fact that there was
a   breach   committed   was   also   within   the   knowledge   of   the
lessee though they were seeking to take shelter under Clause
12. That apart, the letter dated 26.06.1990 addressed to the
government   by   M/s.   Joseph   &   Company   through   Ms.   Meera
Scaria,  inter­alia  states as follows: ­   
“If   this   reconveyance   is   effected,   the   entire   property
included in the lease deed  executed by Sh. K.K. Joseph and
registered   as   document   No.1983   of   1979   of   Nenmara,   Sub
Page  22  of  33

Registry   Office   will   come   back   to   the   possession   of   M/s.
Joseph & Company which is the original lessee .” 
   (Emphasis supplied)
The   said   statement   would   clarify   that   the   possession   had
been   parted   and   it   was   only   being   indicated   that   on   re­
conveyance   being   made,   the   possession   would   come   back   to
the lessee. Therefore, the contention put forth by the learned
senior counsel for the respondent that the possession had not
been   parted   and   the   lease   rental   was   being   paid   by   them
cannot   be   accepted   as   a   mitigating   factor   in   the   facts   and
circumstances of this case.
24 . Though   an   attempt   is   made   to   contend   that   an
opportunity ought to have been granted to remedy the default
in   view   of   the   provision   contained   in   Clause   12   of   the   lease
deed   in   which   event   the   default   would   stand   remedied,   the
same cannot come to the aid of the respondent for the reason
stated   supra.   Further,   factually   also   it   is   to   be   noted   that
except   addressing   the   letter   dated   26.06.1990,   the   lessee­
M/s.   Joseph   &   Company   did   not   take   any   concrete   steps   to
either   cancel   the   sale   deed   or   to   physically   indicate   that   the
possession   is   back   with   the   lessee   and   the   transaction   has
Page  23  of  33

been   nullified.   Be   that   as   it   may,   even   otherwise   in   the
instant   facts   the   breach   was   not   of   the   nature   which   was
contemplated for rectification as provided under Clause 12 of
the   lease   deed.   Therefore,   it   is   too   late   in   the   day   for   the
respondent   to   contend   that   there   was   non­compliance   of
Clause 12 before the right of the lessor to terminate the lease
as provided under Clause 14 is exercised.
25 . The   alternate   contention   urged   by   the   learned   senior
counsel for the respondent­lessee is that even if the breach is
held against the lessee, the entire lease cannot be forfeited in
view of the provision in Section 111(g) of T.P. Act. The learned
senior   counsel   in   order   to   persuade   us   on   this   aspect   has
referred   to   certain   decisions   which   will   be   adverted   to   here
below.
26 . Having noted the contention, firstly, a perusal of clause
14   no   doubt   does   not   state   ‘a   part   thereof’   as   contended   by
the learned senior counsel. However, that does not mean that
a   breach   committed   in   respect   of   a   part   of   the   leased   land
cannot   be   construed   as   breach   and   would   disentitle   the
lessor   to   exercise   the   right   thereunder.   Secondly,   Section
111(g)   does   not   suggest   that   in   respect   of   the   lease   as   a
Page  24  of  33

whole,   the   forfeiture   should   be   limited   only   to   the   portion
regarding   which   the   breach   is   alleged.   The   breach   is   of   not
adhering   to   the   assurance   given   to   lessor   in   respect   of   the
property belonging to the lessor, be it the whole or a part of it.
In   this   regard,   the   decision   relied   on   in   the   case   of   Sh.
Shiam Behari Lal Gour and Others vs. Madan Singh   AIR
(32)   1946   Allahabad   298   is   a   circumstance   where   the   suit
was   decreed   for   a   declaration   that   the   lease   rights   of   the
defendants in the leased land have been determined and the
plaintiff   is   entitled   to   possession.   In   that   circumstance,   the
point which arose for consideration is, whether the plaintiff is
in   the   events   which   have   happened,   entitled   to   such
declaration and whether in that circumstance there has been
forfeiture.   No­doubt   as   contended   by   the   learned   senior
counsel,   the   issue   that   was   settled   is   that   the   law   leans
against   forfeiture.   Such   consideration   in   the   said   suit   was
after   noting   the   nature   of   right   that   was   claimed   to   the
property   by   the   lessor   wherein   there   was   rival   claims   of
succession to the property. 
Page  25  of  33

27 . In the case,   A. Venkataramana Bhatta and Ors. vs.
Krishna   Bhatta   and   Ors   AIR   1925   Madras   57,   the   High
Court   no   doubt   considered   the   case   against   forfeiture   of   the
entire lease when there was partial alienation by taking a leaf
from   the   construction   adopted   in   England,   based   on   the
general   principles   of   equity   and   the   same   was   followed   in
India. In the said case, the equitable principle was applied in
a   circumstance   where   the   lessee   himself   in   fact   was   the
owner   of   the   property.   He   had   mortgaged   the   same   and   had
obtained lease of a portion of the mortgage property from his
mortgagee. From such property which was obtained on lease,
a   portion   thereof   was   again   mortgaged   by   him   to   a   different
mortgagee which was termed as breach of the terms of lease.
In   that   circumstance,   the   forfeiture   was   limited   only   to   the
portion which was mortgaged to a third­party mortgagee after
obtaining on lease from the first mortgagee. 
28 . In the case,  Grove vs. Portal  1902 1 CH 727, the lease
given   was   of   fishing   in   certain   portions   of   the   river   but   with
the  condition  not  to   sublet  without   the  consent   of  the  lessor
in   writing.   When   breach   was   alleged,   the   lessee   contended
that he granted authority to another person only to the extent
Page  26  of  33

as provided in the lease. The lessor, however, contended that
it constituted breach as the lessee assigned it to third person.
In   that   situation,   it   was   held   that   the   covenant   did   not
expressly apply  to any part of the premises as well as to the
whole   since   the   lessee   was   not   precluded   from   granting
license   to   another   person   (limited   to   two   rods)   to   fish   in   the
river   during   the   residue   of   the   term.   The   consideration
therein would not be relevant in the instant case. In the case,
Cook vs. Shoesmith   (1951) 1 KB­752, it was the case where
the   dwelling   house   was   let   to   the   tenant   wherein,   he   agreed
that   he   will   not   sublet.   However,   the   tenant   had   sublet   two
rooms   of   the   house   due   to   which   the   landlord   filed   the   suit
for   possession   alleging   breach   of   the   agreement.   The   court
relied   on   the   dictum   of   Lord   Elson   in   Church   vs.   Brown
wherein  it  was  held  that   the  principle  of  an  undertaking  not
to   sublet   the   premise   was   not   broken   since   ‘the   premise’
described   the   whole   of   what   is   demised   and   there   are   no
words such as a tenant had agreed not to sublet any part of
it. In that circumstance, it was held that there was no breach
of the agreement. 
Page  27  of  33

29 . In,   Swarnamoyee   Debya   vs.   Aferaddi   and   Ors.   AIR
1932 Calcutta 787, it was a case where ejectment was sought
for   unauthorised   transfer   by   the   defendant   which   was
contended   to   have   broken   the   condition   in   the   document
creating   the   tenancy.   In   that   circumstance,   it   was   held   that
the usufructuary mortgage was not of the entire holding and
upon the covenant in the lease, no forfeiture was incurred by
the   transaction.   The   question   which   was   considered   therein
was   with   regard   to   the   construction   of   the   lease   which   had
arisen in that case and a decision to that effect was taken. In
the   case,   Keshab   Chandra   Sarkar   and   Ors.   vs.   Gopal
Chandra   Chanda   AIR   1960   Calcutta   609,   the   plaintiff   had
sued   for   recovery   of   possession   contending   unauthorised
transfer   of   the   leased   land   without   the   consent   of   lessor
which   amounted   to   breach   of   condition   of   the   lease.   The
general principles relating to forfeiture as had been laid down
was   taken   note   and   in   that   circumstance   by   strictly
construing   the   right   of   forfeiture   against   the   lessor   in   the
absence  of  express  stipulation  had   arrived  at   the   conclusion
that   the   transfer   made   of   the   entire   extent,   though   consent
Page  28  of  33

had   been   obtained   to   transfer   a   part   would   not   amount   to
breach.   Certain   other   decisions   relied   on   by   the   learned
senior counsel are also to the same effect and we see no need
to   refer   to   each   of   them.   But,   what   is   necessary   to   be   taken
note   is   that   the   general   principles   of   equity   as   laid   down   in
Grove   vs.   Portal   (supra)   has   been   the   basis   for   the
conclusion reached in almost all the noted cases. 
30 . In   contradistinction   to   the   facts   which   arose   for
consideration in the cited cases where essentially the dispute
was   inter­se   between   the  private   owners   of   the   property   and
their   lessees   and   the   nature   of   transaction,   in   the   instant
case,   the   leased   land   is   the   property   which   belong   to   the
government and the leasehold right has been auctioned so as
to   earn   revenue   for   the   state,   which   is   to   the   interest   of   its
citizens and one citizen or a group is permitted to exploit the
land   to   the   exclusion   of   all   others.   Additionally,   such
government property is located in an area notified as reserve
forest.   In   such   circumstance,   when   the   lessee   is   given   the
benefit   of   such   property   and   the   breach   of   the   condition
imposed   is   alleged,   the   strict   construction   of   the   forfeiture
clause against the lessor in all circumstances would not arise
Page  29  of  33

as   otherwise   it   would   render   the   clause   in   the   lease   deed
otiose.   The   principle   contained   in   Section   111(g)   of   the   T.P.
Act though noticed, the parties are governed by the terms in
the   contract   and   as   such   the   lessee   cannot   claim   benefit
under   the   said   provision.   Further,   as   already   noted   the
consideration   under   Section   111(g)   is   based   on   equitable
principles   which   will   have   to   be   applied   depending   on   the
facts   and   circumstances   obtained   in   each   case.   While
applying   the   equitable   principles,   the   maxim   he   who   seeks
equity   must   do   equity   cannot   be   lost   sight   of.     It   is   said,   a
court will not  assist a lessee in  extricating  himself or  herself
from   the   circumstances   that   he   or   she   has   created,   in   the
name   of   equitable   consideration.   In   the   instant   facts   as
already   noted   when   public   largesse     is   bestowed   on   certain
terms and conditions, a term of the lease deed is to be strictly
adhered to and when Clause 14 provides that the lessee shall
not   be   entitled   to   sublet   or   assign   his   interest   in   the   lease
except with the previous permission in writing of the lessor, it
does   not   matter   as   to   whether   the   breach   committed   is   by
assigning a portion of the leased land or the whole when such
interest   of   the   lessee   has   been   transferred   without   previous
Page  30  of  33

permission of the lessor. Further, in all the cases referred to
by   the   learned   senior   counsel,   the   breach   alleged   was   either
of creating mortgage or subletting the property. In the instant
case,   despite   being   a   lessee   the   respondent   has   executed   an
absolute sale deed in respect of the leased land which belongs
to the government and such breach cannot be condoned. 
CIVIL   APPEAL   NO.5120/2021   @   SLP(C)   No.9661/2017
AND   CIVIL   APPEAL   NO.5119/2021   @   SLP(C)
No.18760/2016
31. The Appellant­State of Kerala in both these appeals are
assailing   the   interim   orders   passed   by   the   learned   single
judge   in   W.P.   No.35832/2015.   The   said   order   had   been
confirmed   by   the  learned   Division   Bench   through   the   orders
dated   11.01.2016   and   25.01.2017.   Considering   that   the
learned   single   judge   had   made   an   interim   arrangement
protecting   the   interest   of   both   the   parties     which   will   be
subject to ultimate result in the writ petition and also taking
note   that   this   Court   while   directing   notice   in   SLP
No.9661/2017,   on   21.04.2017   had   directed   the   parties   to
maintain   status   quo   as   it   existed   on   that   day   and   the   said
order has continued till this day, it would be appropriate that
the   said   position   shall   continue   and   the   High   Court   shall
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dispose   of   the   writ   proceedings   in   accordance   with   law,   if
already not considered and disposed of. We make it clear that
we have  refrained from  interfering  with  the impugned  orders
since they are interim in nature. We have also not adverted to
the   merits   of   the   rival   contentions   arising   in   these
proceedings. As such  the  High  Court shall  consider  the case
on its own merits. 
32.     For all the aforestated reasons, the following order;
(i) The   order   dated   10.07.2015   passed   by   the
learned   Division Bench in W.A.No.369/2011 and
W.A.No.375/2011 is set aside.
(ii)     The order dated 17.01.2011 passed by the learned
Single Judge in W.P.No.1207/2005 is restored.
(iv)    The   appeals   arising   out   of   SLP(C)   Nos.879­
880/2016 are allowed in part with no order as to
costs.
(v)      The appeals arising out of SLP (C) No.9661/2017
and SLP(C) No.18760/2016 are disposed of.
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(vi)       Pending application, if any, shall stand disposed
of.
.…………………….J.
(HEMANT GUPTA)
                                                     ……………………….J.
                                               (A.S. BOPANNA)
New Delhi,
September 03, 2021 
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