A) ABSTRACT / HEADNOTE

This case adjudicates a dispute regarding specific performance of an agreement to assign leasehold rights. The defendant, a leaseholder, agreed to assign his rights to the plaintiff, provided he would obtain the lessor’s consent before completion. The lease deed allowed assignment only with prior written consent of the lessor, but that consent was not to be unreasonably withheld when the proposed assignee was a respectable or responsible person. Upon the defendant’s failure to obtain such consent—primarily due to the lessor’s refusal—the defendant claimed the agreement had become void. The plaintiff, a respectable individual, contested that the lease provision merely qualified the lessee’s covenant and did not impose a standalone condition. The Supreme Court held the agreement was valid and enforceable. The consent condition was not a condition precedent for the agreement’s existence but a term to be fulfilled. Since the refusal of consent by the lessor was unreasonable, the defendant remained bound by the agreement, and the plaintiff was entitled to specific performance—even without the lessor’s consent.

Keywords: Leasehold assignment, Specific performance, Consent of lessor, Reasonable refusal, Covenant, Contract law

B) CASE DETAILS

i) Judgement Cause Title: Raja Kamala Ranjan Roy v. Baijnath Bajoria

ii) Case Number: Civil Appeal No. 4 of 1950

iii) Judgement Date: 1st December 1950

iv) Court: Supreme Court of India

v) Quorum: Chief Justice Harilal Kania, Justice Patanjali Sastri, Justice S.R. Das

vi) Author: Justice S.R. Das

vii) Citation: AIR 1950 SC 444; [1950] SCR 841

viii) Legal Provisions Involved: Section 10 and Section 21 of the Specific Relief Act, 1877 (now Specific Relief Act, 1963); Contract law principles concerning conditionality and enforceability; leasehold assignment rules

ix) Judgments overruled by the Case: None mentioned

x) Case is Related to which Law Subjects: Contract Law, Property Law, Civil Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The case presented a nuanced legal conundrum on the nature of lease assignments contingent upon third-party consent. The specific clause in the lease deed prevented assignment without the lessor’s prior written consent, albeit with a caveat that such consent must not be unreasonably withheld in cases involving respectable or responsible individuals. Such clauses are frequent in urban lease agreements and trigger disputes when parties disagree on the necessity or effect of third-party consent. The court was called to decide whether such a clause transformed the entire contract into a conditional one or if the contract stood independent of the lessor’s willingness. This issue carried significant legal implications for both commercial lease arrangements and contract enforcement standards in India.

D) FACTS OF THE CASE

The Maharaja of Cossimbazar owned Premises No. 374, Upper Chitpur Road, Calcutta, leased in 1931 for 51 years to Madan Gopal Daga under terms restricting assignment without the written consent of the lessor. The clause contained an exception—if the assignee was a respectable or responsible person, the consent should not be unreasonably withheld.

In 1943, Daga, with written consent, assigned the lease to the defendant, Baijnath Bajoria, who became the tenant. Subsequently, Bajoria agreed through correspondence in early 1945 to assign the leasehold interest to Raja Kamala Ranjan Roy for ₹1,80,000. The agreed terms required Bajoria to obtain consent from the landlord before completing the sale. However, the lessor refused consent, citing the prior termination of the lease due to non-payment of rent. After the defendant regularized rent dues and got the lease revived, the lessor still refused consent without providing reasons. Bajoria then attempted to cancel the agreement, citing the lack of consent.

Raja Kamala Ranjan Roy filed a suit seeking specific performance of the agreement, asserting that the landlord’s refusal was unreasonable and did not absolve the defendant from his obligations. The trial court and the High Court both upheld the plaintiff’s right, decreeing specific performance of the contract without requiring the lessor’s consent.

E) LEGAL ISSUES RAISED

i) Whether the agreement to assign leasehold rights was contingent upon obtaining the lessor’s consent.

ii) Whether the refusal of consent by the lessor was unreasonable under the lease clause.

iii) Whether the absence of consent invalidated the agreement or relieved the defendant from specific performance.

iv) Whether the Court could decree specific performance without making the lessor a party.

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for the appellant contended that the agreement was expressly conditional upon the lessor’s consent. According to them, until such consent was secured, the contract lacked enforceability. They relied on the interpretation that the clause in the offer required prior consent before the assignment and this condition not being fulfilled extinguished any contractual obligations.

They also emphasized that since the lease had initially been terminated due to non-payment of rent, the lease itself stood on an uncertain footing, making any agreement to assign it premature. They claimed that the lease could not be assigned unless revived and the lessor’s consent was explicit.

Further, they argued that the inclusion of the condition in the lease deed was a vital protection for the landlord and any assignment in its breach would expose the lessee (appellant) to litigation or forfeiture. The defendant, they maintained, had fulfilled his obligations by approaching the landlord and, upon denial of consent, had no further duties under the contract.

G) RESPONDENT’S ARGUMENTS

i) The counsels for respondent Raja Kamala Ranjan Roy argued that the contract was not contingent upon obtaining prior consent. They asserted that obtaining the consent was merely a term in the agreement, not a condition precedent to the contract’s existence.

They pointed out that the lease deed explicitly stated that the lessor could not unreasonably withhold consent if the assignee was respectable or responsible. The plaintiff, being of such status, was eligible under the lease terms, and the landlord’s refusal was arbitrary and without basis.

The plaintiff argued that he had always been ready and willing to perform the contract and that the defendant was attempting to escape obligations by using the landlord’s refusal as a pretext. The refusal, they contended, did not legally or equitably absolve the defendant from performing the agreed transfer.

They also emphasized that even if consent was not granted, courts could enforce the contract by assessing whether the refusal was reasonable and that the lessor’s actions should not frustrate the plaintiff’s equitable rights under the agreement.

H) JUDGEMENT

a. RATIO DECIDENDI

i) The Supreme Court ruled that the agreement between the parties was not contingent upon obtaining the lessor’s consent. It held that the obligation to obtain the lessor’s consent was not a condition precedent for the formation of a valid contract, but rather a contractual term to be fulfilled by the defendant. The contract stood independently enforceable even without such consent [1].

The Court clarified that the clause in the lease agreement—“not to assign without the written consent of the lessor, such consent not to be unreasonably withheld in the case of a respectable or responsible person”—did not create a separate obligation upon the lessor, but qualified the lessee’s obligation. Therefore, where the lessor unreasonably withheld consent for assignment to a respectable person, the lessee could still lawfully assign the lease [2].

Moreover, the Court opined that the plaintiff’s status as a respectable and responsible person was never disputed, and the lessor had provided no justification for his refusal. This made the refusal unreasonable and arbitrary, rendering the lessor’s consent unnecessary for the assignment’s validity [3].

The defendant could not, thus, repudiate the agreement on grounds of lack of consent, especially since the refusal itself was invalid under the lease’s terms. The Court emphasized that contractual obligations must be respected, and one party cannot evade performance by invoking a third party’s unreasonable act.

b. OBITER DICTA 

i) The Court remarked that even though the lessor was not a party to the litigation, the courts could still examine the question of unreasonableness of his refusal for the limited purpose of granting specific performance. Such a determination would not bind the lessor, but was necessary to dispense justice between the actual parties to the contract [4].

It also emphasized that tenants and lessees must exercise care in drafting conditional clauses when they desire protection from third-party interference. The lessee here had not made his obligation to transfer conditional upon obtaining consent, which resulted in a binding obligation irrespective of the consent outcome.

c. GUIDELINES 

The Supreme Court laid down the following principles of law in this judgment:

• An agreement to assign a lease is not necessarily contingent upon obtaining lessor’s consent, unless expressly made so. If the contract states that the lessee “shall obtain consent,” it implies a term—not a condition precedent.

• A clause in the lease preventing assignment without written consent but adding that consent “shall not be unreasonably withheld in case of respectable persons” is not an independent covenant enforceable against the lessor but a qualification on the lessee’s covenant.

• Where the assignee is respectable and responsible, and the lessor unreasonably refuses consent, the lessee is relieved from the obligation of seeking such consent.

• In such cases, specific performance of the agreement to assign may be decreed, even without the lessor being a party to the suit.

• If the agreement requires consent and the lessee fails to obtain it, he may still be bound to assign the lease, provided the consent was unreasonably withheld and the assignee meets the criteria in the lease clause.

I) CONCLUSION & COMMENTS

The Supreme Court’s judgment in Raja Kamala Ranjan Roy v. Baijnath Bajoria decisively clarifies the legal position on assignments of leasehold interests subject to landlord consent. It distinguishes between contractual terms and contingent conditions, recognizing that a contractual duty (such as obtaining consent) cannot become a ground for repudiation unless the contract itself is conditional upon it.

The ruling significantly strengthens the remedial power of specific performance in Indian contract law. It indicates that unreasonable third-party refusal cannot negate the legal efficacy of a binding agreement between two primary parties. This is crucial for commercial certainty, especially in real estate and leasehold transfers.

The Court’s analytical approach also ensures that tenants cannot escape contracts through lessor’s passive obstruction, thus protecting genuine buyers and maintaining contractual integrity.

This decision aligns with earlier English decisions such as Treloar v. Bigge (1874) LR 9 Ex 151 and Hemantha Kumar Roy Chowdhury v. Gauri Dutt Jalan, 47 Cal 485, where similar clauses in lease deeds were interpreted as permissive, not prohibitive. The judgment thus acts as a reaffirmation of equitable principles—protecting the innocent party from the fallout of unreasonable refusal by a non-party.

J) REFERENCES

a. Important Cases Referred

1. Treloar v. Bigge, LR 9 Ex 151 – Interpreted leasehold covenants regarding assignments and lessor’s unreasonableness.

2. Hemantha Kumar Roy Chowdhury v. Gauri Dutt Jalan, 47 Cal. 485 at 494 – Held that an agreement to lease must create a present interest in land to qualify as lease under the law.

3. Mohammad Moinul Haque v. Patanjali Sastri J., [1950] SCR 840 – Distinguished consent-based lease conditions.

b. Important Statutes Referred

1. Section 10, Specific Relief Act, 1877 – (now Section 10 of the Specific Relief Act, 1963): Specific performance may be enforced where monetary damages are inadequate.

2. Section 21, Specific Relief Act, 1877 – (now Section 12 of 1963 Act): Partial specific performance and enforceability of contracts involving third parties.

3. Indian Contract Act, 1872 – Particularly Sections relating to performance and formation of contracts (Sections 2, 10, 37, 54).

4. Transfer of Property Act, 1882 – Section 108(j) (rights of lessee regarding assignment, if not prohibited by lease).