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    Case Brief: Caltex (India) Ltd Vs. Bhagwan Devi Marodia

    Case Brief: Caltex (India) Ltd Vs. Bhagwan Devi Marodia – By Bhuwan Sood

    Caltex (India) Ltd Vs. Bhagwan Devi Marodia
    Equivalent citations: 1969 AIR 405, 1969 SCR (2) 238
    HON’BLE MR. JUSTICE R.S. BACHAWAT
    HON’BLE MR. JUSTICE S.M. SIKRI

    CASE HISTORY

    It is a landmark case on the Indian Contract Act (9 of 1872), stating that during the Lease of land if time is used as an essence of contract then the intention is to be clearly stated. This case was decided by Justice Bachawat and R.S Sikri on 26th September 1968.

    FACTS in Caltex (India) Ltd Vs. Bhagwan Devi Marodia

    The respondent rented to the appealing party a plot of land for a specific period and specified in the rent deed that the appellant would pull out of reestablishment of the rent inside a certain time. The litigant asked for a renewal of the rent 12 days after the time fixed. The respondent asked the appellant to clear the premises expressing, that the demand being made out of time, was insufficient.

    The litigant filed a suit for a presentation that he was qualified for the reestablishment, and expressed that the delay in making the solicitation he pardoned as (an)- 

    1. It was expected to oversight; 
    2. The respondent had not modified her position for the more awful or to her impediment inside the space of 12 days;
    3. Neither one of the parties had regarded the matter of time as being as the quintessence of the exchange; 
    4. The appealing party had developed an assistance station for oil-based commodities of immense utility to the general society of the region;
    5. The litigant was in possession of the land.  

    The Court excused the suit, and this choice was affirmed in appeal. Dismissing the intrigue, this Court.

    Issues:-

    Is time used as an essence of contract with respect to the Indian Contract Act?

    REASONING:-

    Equity followed the common law rule in respect 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. 

    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 special circumstances such as unavoidable accident,  fraud, surprise,  ignorance, not willful or inequitable conduct on the part of the lessor precluding him refusing to give the renewal. 

    Grounds 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 appellant constructed a service station was an irrelevant consideration. 
    Ground (3) was not established and it was not shown that the time was not the essence of the bargain. 

     As to ground (1) there was some evidence to show that the delay in giving the notice of renewal was due to oversight. But it was not shown that the delay was due to any unavoidable accident, excusable ignorance, fraud, or surprise. The delay arose from mere neglect on-the part of the appellant and could have been avoided by reasonable diligence. 

    Case Laws stated

    1. Jamshed Khodaram Irani  v.  Durjorji Dhunjibhai
    2.  PIrate v. Nicoll [1966] 
    3. Eaton v. Lyon  
    4. Reid & Anr. v. Grave  &  Ors
    5. Ram Lal Dubey v. Secretary of  State  for India, C.W.N
    6.  Maharani Hemanta Kumari  Devi v. Safatulla Biswas & Ors. 

    CONCLUSION

    Mr. Chagla has submitted that the time is not of the essence of the contract having regard to Section 55 of the Indian contract act, 1877 as interpreted in the case of Jamshed Khodaram Irani Vs. Burjorji Dhunjibhai, section 55 of the Indian contract act provides that when a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before the specified time, and fails to do any such thing at or before the specified time, the contract or so much of it as has not been voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.

    In Jamshed’s case Viscount Haldane observed that the section did not lay down any principle as regards contracts to sell land in India different from those obtained under the law of England. It is well known that in the petrol delivery station and was an ika tenant within the meaning of the Calcutta Thika tenancy act, 1949. In Caltex (India) Ltd Vs. Bhagwan Devi Marodian, in February 1964 the respondent filed, an application before the controller asking for eviction of the appellant under Sections 3(vi) and 5 of the Calcutta Thika tenancy act. The controller allowed the application. an appeal from this order was dismissed by the appellate authority.

    This article is written by Bhuwan Sood, Campus Ambassador Legal Thirst. He is a 1st year Law student at Christ {Deemed to be University} Delhi – NCR.

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