1962 (2) Supreme Court Cases 594, Deed of Lease, “with an option to the lessee to renew the same as long as desired as provided”, Whether an option given to a lessee to get the lease, which is initially for a period of ten years, renewed after every ten years is hit by the rule of perpetuity and is void? , Clause 9 of the lease deed, Clause 10 of the lease deed, Transfer of Property Act Section 14 – Rule Against Perpetuity, Section 40- Restriction on use of land, The Object of this rule is to ensure free and active circulation of property both for purposes of trade and commerce as well as for the betterment of the property itself. (vested interest), The Rule against perpetuity contained in section 14 of the Transfer Of Property Act 1882 would not be applicable as no interest in property has been created of the nature contemplated by that provision.

1. R.Kempraj v. Messrs Barton
Son & Co.
By,
MOHAMMED HAROON RASHEED
B.A.LL.B (Hons.), [BSW] & [LLM]
Advocate
Email ID: adv.mdharoon@gmail.com
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2. 1962 (2) Supreme Court Cases 594.
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3. FACTS:
• On October 26, 1951, Respondent entered into a
deed of Lease. (para 2)
• Respect to a premises located at M.G Road,
Bangalore. (para 2)
• “with an option to the lessee to renew the same
as long as desired as provided”.
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4. ISSUE:
• Whether an option given to a lessee to get
the lease, which is initially for a period of
ten years, renewed after every ten years is
hit by the rule of perpetuity and is void?
(para 1)
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5. LAW:
• Clause 9 of the lease deed.(para 2)
• Clause 10 of the lease deed. (para 2)
• Section 14 – Rule Against Perpetuity. (para 4 def.)
• Section 40- Restriction on use of land (para 8).
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6. ANALYSIS OF THE LAW:
•Clause 9 of the lease deed:
•“The lessee shall have the right to renew the lease of the scheduled premises at
the end of the present period of ten years here in secured on the same rental of
Rs. 450/- per month, for a similar period and for further similar periods
thereafter on the same terms and conditions as are set forth herein ; and the
lease shall be permitted and shall have right to remain in occupation of the
premises on the same terms and conditions for any further periods of ten years
as long as they desired to do so.” (para 2)
•Clause 10 of the lease deed:
•“The lesser shall not raise any objections whatsoever to the lease exercising his
option to renew the lease for any further period of ten years on the same terms
and conditions as long as they desire to be in occupation, provided the lease
shall not have a right to transfer the lease or alienate right there under.”
(para2)
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7. • Section 14 – Rule Against Perpetuity.
(para 5 and 6)
The Object of this rule is to ensure free and active
circulation of property both for purposes of trade
and commerce as well as for the betterment of the
property itself. (vested interest)
• Section 40- Restriction on use of land.
• (para 8)
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8. • The Rule of Perpetuity applies in case of Vested
Interest where here it is the case of contingent
interest held by respondent where he is not the
owner but he is lessee who pays the lease and
also has right to renew his lease after period of
every 10 years. (para 5 and 6)
Vested Interest : - Interest created in favor of the transferee upon the transfer of
a property.
Contingent Interest : - Interest which gets vested upon the happening or not
happening of an uncertain specific event.
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9. CONCLUSION (Judgment):
• The Rule against perpetuity contained in section 14
of the Transfer Of Property Act 1882 would not be
applicable as no interest in property has been
created of the nature contemplated by that
provision.
• The appeal fails and it is to be dismissed with costs.
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