Leasehold rights after cession require clear sovereign agreement or legislation; no implied perpetual renewal arose here.

On cession of territory, enforceable rights against the new sovereign arose only from agreement, express or implied, or from legislation, and antecedent rights against the former sovereign did not automatically continue. The Government's dealings with the Kasbatis consistently treated the holding as a lease for terms of years, with renewal left to governmental discretion; the first patta negatived any right to insist on renewal, and later pattas and resolutions were likewise inconsistent with proprietary title or a binding obligation to perpetually renew. The legislation relied on did not convert the leasehold into heritable ownership or override the lease's express limits. The respondent therefore failed to establish a proprietary right or legal entitlement to renewal, and the holding remained leasehold.

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Issues: Whether the respondent acquired proprietary rights, or a legal right to perpetual renewal and continued possession of the village, from the Bombay Government after cession of the territory, and whether the relevant legislation altered the leasehold character of the holding.

Analysis: On cession, the enforceable rights against the new sovereign were only those created by agreement, express or implied, or by legislation; antecedent rights against the former sovereign did not automatically survive. The evidence showed that the Government's dealings with the Kasbatis were by leases for terms of years, repeatedly treating the holding as leasehold and reserving governmental discretion to renew or refuse renewal. The first patta negatived any right to insist on renewal, and the subsequent pattas and government resolutions were inconsistent with any proprietary title or legal obligation to perpetually renew. The statutory provisions relied upon did not convert a term lease into heritable ownership or override the express limits of the lease.

Conclusion: The respondent failed to establish any proprietary right or legal entitlement to renewal. The holding remained leasehold at the Government's pleasure.

Final Conclusion: The decrees below were unsustainable, the appellant's appeal succeeded, and the respondent's suit was dismissed with costs.

Ratio Decidendi: On cession of territory, rights enforceable against the new sovereign arise only from the new sovereign's agreement or applicable legislation, and a lease for a term does not imply a legal right to perpetual renewal unless clearly created by binding terms.

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