1. This is an appeal by one Bechardas Damodardas against whom a decree for Rs. 20,000 and odd has been passed by the Joint First Class Sub-Judge, Ahmedabad, at the suit of the Ahmedabad Municipality.
2. There is no dispute as to the facts which are fully set out in the plaint. The Ahmedabad Municipality has a vegetable market, the right to occupy which is periodically sold by auction. There was an auction held on January 21, 1934, at which one Bechardas Samaldas was the highest bidder. The terms of the tenancy were set out in the conditions of the auction, exhibit 61, a document which after his bid was made was signed by Bechardas Samaldas and also by the Chairman of the Standing Committee which carried out the auction. The period of tenancy was to be three years from April 1, 1934, to March 31, 1937. The person who obtained the lease was to pass a registered rent-note at his own expense. He was to deposit one month's rent and he was to pay the rent every month in advance. There were numerous other conditions, but we are not at the moment concerned with those.
3. On January 30, 1934, Bechardas Samaldas agreed to deposit two months' rent instead of one month as provided in exhibit 61. Before the tenancy became effective it was necessary that the highest bid should be sanctioned by the General Board of the Municipality, and after a resolution of the Standing Committee on January 30, 1934, recommending the acceptance of the bid, the General Board on February 14, 1934, sanctioned that recommendation. Bechardas was informed of this on February 24, 1934, and he was called upon to pay Rs. 467, the estimated cost of getting a rent-note executed and registered. He did not pay this money and nothing was done about execution or registration of the rent-note. Nearly a year later, on February 16, 1935, a, reminder was sent to him about paying the costs of the document but apparently he took no notice of this either. In the meantime he had obtained possession of the vegetable market on April 1, 1934, and he continued in occupation paying the rent of Rs. 2,551 every month regularly in advance until he died on or about April 30, 1935.
4. Bechardas's widow Bai Divali informed the Municipality of her husband's death and said that the contract was at an end, and that she was ready to hand over possession at any time between June 1 and 30. The Municipality then made several attempts to re-auction the lease. Auctions were held on two or three occasions but either no bids were received or the bids were considered insufficient. Possession of the market had been re-taken on June 17, 1935, and Bai Divali was informed that arrangements would be made for a new lease at her risk. Ultimately in August, 1935, a bid for Rs. 1,651 was received which was accepted and sanctioned by the General Board, which also authorised a suit for damages being filed on the old agreement. On October 4, 1935, the suit was filed against two defendants, viz., Bai Divali and Shankardas Samaldas, brother of the deceased Bechardas Samaldas. This Shankardas died on November 8, 1935, and his name was then struck off. Bai Divali died on February 17, 1936, and Bechardas Da-modardas, the present appellant, was brought on record as her heir on March 13, 1936.
5. In the suit the plaintiff Municipality claimed damages amounting to Rs. 26,000 and odd, the amount being arrived at in this way. The total amount which would have been paid by way of rent under the agreement with Bechardas Samaldas was Rs. 91,836. From that amount was deducted the sum of Rs. 33,000 and odd which had been received as rent from Bechardas and also the sum of Rs. 32,000 and odd which was to be received from the new tenants within the period of the original tenancy. In addition a small sum was claimed for the expenses of advertisement and so on.
6. The learned trial Judge relying on a decision of Mr. Justice B.J. Wadia in Suleman v. Patell : AIR1933Bom381 held that the case was covered by Section 53A of the Transfer of Property Act and that, in spite of there being no registered agreement or lease, the plaintiff Municipality was entitled to recover the amount which they would have recovered if the agreement had been carried out, less what they actually received. It may be mentioned in this connection that one of the conditions contained in the auction paper, exhibit 61, No. 21, was that if the lessee did not act according to the conditions of the tenancy, the Municipality had the right to take over possession of the market, to forfeit the deposit and to recover the loss if any.
7. The first argument of the learned advocate for the appellant is that Section 53A does not apply in terms to a case like the present and that the section can only be relied on as a defence and not as the foundation of an action. The first requirement mentioned in Section 53A is that there should be a writing signed by the transferor or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty. The words 'signed on his behalf' in the section must mean presumably signed by a person who has authority to bind or represent the transferor.
8. The documents relied on by the Municipality are the auction paper, exhibit 61, the further agreement by Bechardas to deposit two months' rent, exhibit 62, and the resolution of the General Committee, which does not in itself contain any of the terms of the agreement but sanctions the recommendation of the Standing Committee that the highest bid should be accepted. By Section 48(4) of the Bombay Municipal Boroughs Act, 1925, it is provided that every contract under or for any purpose of this Act shall be made on behalf of the Municipality by the Chief Officer. Exhibit 61, as I have mentioned, is signed by the Chairman of the Standing Committee; This signature also appears on exhibit 62 which is the subsequent agreement. Under Section 34(2)(c) of the same Act the Chief Officer may delegate any of his powers or duties to any municipal officer or servant with the sanction of the Standing Committee. There is no evidence of any delegation of the Chief Officer's powers in the present case, but it is to be noted in this connection that this particular point was not taken at the hearing. Another point to be noted is that the Chief Officer appears to have signed the resolution of the General Committee or a copy of it, though why or in what capacity he did this does not appear. However, under the circumstances we are not pre-pared to say that the requirements of the first clause of Section 53A have not been satisfied.
9. The principal difficulty which the plaintiff Municipality seeking to rely on the section has to get over is the third clause which makes it a condition that the transferee has performed or is willing to perform his part of the contract. Leaving aside for the moment the question whether this section is only enacted for the protection of the transferee and confers no rights on the transferor, it is obvious both from the language and also from the history of this enactment that it is primarily intended for the benefit of the transferee and that being so, when the section speaks of the performance of his part or willingness to perform his part, it must mean in our opinion complete performance or complete willingness so far as he is concerned. Otherwise there would be no reason why the transferor should be confined within the four corners of the contract. We are quite unable to accept the argument of the learned advocate for the respondent that it is a sufficient compliance with this condition that the transferee should have performed his part of the contract to some extent. It is true that Mr. Justice B.J. Wadia in Suleman v. Patell (1933) 35 Bom. L.R. 772 has taken this view, but with all deference to the learned Judge we are unable to agree. We think, therefore, that the conditions necessary for the coming into operation of Section 53A are not satisfied in this case, and that is really enough to dispose of the appeal, so far as the application of Section 53A is concerned.
10. I propose, however, to refer very briefly to some of the cases which have been cited in the argument. Pir Bakhsh v. Mahomed Tahar (1934) L.R. 61 IndAp 388 was a case to which Section 53A did not apply, but their Lordships of the Privy Council described the section as a partial importation into India of the English equitable doctrine of part performance and they also said that it enables a defendant in certain circumstances to plead his possession under an unregistered contract.
11. In Probodh Kumar Das v. Dantmara Tea Co. (1939) L.R. 66 IndAp 293 the facts were that the plaintiffs were in possession under an unregistered contract of sale whereas the defendants had the title to the property. The plaintiffs sought a declaration that the defendants had no title and were debarred from enforcing: any right to the estate. The case therefore is not directly in point, but there are observations fin the judgment which undoubtedly support Mr. Chundrigar's argument that the section is only available as a defence. The material passage in the judgment is this (p. 297):--
In their Lordships' opinion, the amendment of the law effected by the enactment of Section 53A conferred no right of action on a transferee in possession under an unregistered contract of sale. Their Lordships agree with the view expressed by Mitter J. in the High Court that 'the right conferred by Section 53A is a right available only to the defendant to protect his possession.' They note that this was also the view of their late distinguished colleague, Sir Dinshah Mulla, as stated in the second edition of his treatise on the Transfer of Property Act, at p. 262. The section is so framed as to impose a statutory bar on the transferor; it confers no active title on the transferee. Indeed any other reading of it would make a serious inroad on the whole scheme of the Transfer of Property Act.
12. I may say that in the commentary at page 262 of Sir Dinshah Mulla's book to which their Lordships refer the learned commentator criticised Suleman v. Patell as being based on a misconception of the limited scope of the section.
13. It is not necessary for our purposes to say that the transferor can neverrely on the section. According to its terms it debars the transferor from exercising rights which he would have apart from the agreement. There is however, an exception to this disablement in the words 'other than a right expressly provided by the terms of the contract.' But it is clear, we think that the transferor can in any derive no rights from this section which are inconsistent with the conditions subject to which the section comes into operation. If it is a condition precedent, as we think it is, that the transferee:shall have performed his part of the contract or should be willing to perform his part of the contract, the material time being obviously the time when the section is sought to be made use of, it must follow that a suit for damages for breach of a contract can never be founded upon this section. We find ourselves unable to accept Suleman v. Patell as a correct exposition of the law on this point.
14. If Section 53A cannot be availed of, the question is whether the suit can be maintained apart from it. It has been argued on behalf of the respondent that the document on which the plaintiff relies did not require registration. Under Section 17(1)(d) of the Indian Registration Act leases of immoveable property for any term exceeding one year are compulsorily registrable. The definition of 'lease' in the Act includes an agreement to lease. It has been, held, however, e.g., by the Privy Council in Hementa Kumari Debi v. Midnapur Zamindari Co. , that an agreement to lease in order that it should require registration must be one which effects an actual demise or creates a present and immediate interest in the land. Mr. Shah has contended that in the present case there was no actual demise and that no immediate interest in the property was created. According to him the intention of the parties was that a formal lease should be executed and registered, and until that was, done, there was nothing which could be called an agreement to lease.
15. We cannot accept this argument. Possession of the property was given, under the agreement on April 1, 1934, and from that date the parties acted exactly as though the tenancy was in force. The importance or rather the lack of importance which the Municipality attached to the formal lease is shown by their conduct. They did no doubt write a letter to Bechardas asking him to pay the money for the registered deed, but, when he failed to comply, they took no further steps in the matter and waited nearly a year before they so much as reminded him about it. The fact that the tenancy was to commence at a date subsequent to the agreement does not of course prevent there being a present demise: see Sultanali v. Tyeb (1929) 32 Bom. L.R. 188 and Ramjoo Mahomed v. Haridas Mullick (1925) I.L.R. 52 Cal. 695. In the latter case there is a full discussion of the authorities English and Indian. In view of these authorities we have no hesitation in holding that there was a present demise and that the contract contained in the writings relied on by the plaintiff Municipality required registration.
16. In fact it is obvious, we think, that the whole case of the plaintiff implies that there was an agreement by way of lease, and not merely an agreement to execute a lease at a later date such as would come under Section 17(2)(v) of the Indian Registration Act. In paragraph 8 of the plaint it is stated that the deceased Bechardas 'took on lease by public auction' the vegetable market and the land pertaining to it, and generally speaking it may be said that the plaint is drawn up on the footing that there was a tenancy and that the A plaintiff was entitled to damages for breach of the terms of the tenancy. If it were really the fact that there was not an agreement for a lease which would have been valid as a lease if properly registered, the plaintiff would be out of Court, for his only remedy; in that case would have been a suit for specific performance of the agreement to take the lease.
17. One argument put forward on behalf of the appellant was that the suit had abated as against Shankerdas, the original defendant No. 2, and that as his heirs had not been brought on record within the time fixed by law the estate of Bechardas was not represented. This is based on the contention that Bechardas Samaldas and his brother Shankerdas were members of a joint family. On this point, however, the evidence is very far from clear. The learned trial Judge has referred to a deed of family arrangement, exhibit 83, by which a dispute between Bai Divali and Shankerdas was settled. Some of the terms of this document, in particular the provision that Shankerdas was to be paid a salary for managing the estate, are difficult to reconcile with the theory that he was the owner of the property by survivorship. If the brothers were not joint, the widow of Bechardas represented his estate and a decree against that estate in the hands of the appellant, who was brought on record within time after Divali's death, would seem to be in order. In the view we take of the case the point of course does not arise.
18. The result of our findings is that the appeal must be allowed and the suit dismissed with costs throughout. The cross-objections are also dismissed with costs.