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Suleman Haji Ahmed Umar Vs. P.N. Patell - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 42 of 1927
Judge
Reported inAIR1933Bom381; (1933)35BOMLR722; 145Ind.Cas.557
AppellantSuleman Haji Ahmed Umar
RespondentP.N. Patell
Excerpt:
indian registration act (xvi of 1908), sections 17, 49-lease-agreement to lease-agreement not treating present demise-part-performance of agreement-agreement admissible though unregistered-signature of both parties-lessor presenting lease for registration-lessee failing to admit execution-lease unregistered-admissibility of lease in evidence-transfer of property act (iv of 188%), section 53a-retrospective effect.;on february 6, 1924, the defendant wrote a letter to the plaintiff, in pursuance of a, conversation between them, agreeing to take either the ground-floor or the first floor of his house for a period of five years from march 1, 1924, and stating 'please consider this as an agreement.' it was afterwards settled that the first floor was to be let. a regular lease was prepared and..........for breach of the agreement and is filed within time. i will deal with the admission of the lease in evidence later. the agreement between the parties was orally arrived at. though only partially, either on february 4 or 5 or 6, but in any event before the letter of the 6th was written, and was not completed till either february 7 or 8, when it was finally decided to let the flat on the first floor to the defendant and the defendant agreed to take it. counsel for the defendant argued that the plaintiff cannot rely on any oral agreement when the terms of the agreement are reduced to writing by virtue of section 91 of the indian evidence act. but all the terms of the agreement were admittedly not reduced to writing in the letter of february 6. as to the lease the defendant cannot be.....
Judgment:

Wadia, J.

1. Plaintiff has filed this suit to recover from the defendant a sum of Rs. 5,269-12-0 or such other sum as may be fixed by the Court by way of damages for breach of an alleged agreement to take a lease of the premises in suit for a period of five years at the rate of Rs. 325 per month commencing from March 1, 1924. Plaintiff and his father carried on business in Bombay in partnership in the name of Haji Ahmed Umar and Son up to June 1924, when the plaintiff's father died, leaving the plaintiff who was his only child as his sole heir and legal representative. During his lifetime plaintiff's father had purchased a property at Warden Road, Bombay, known as Ahmed Mansion, the conveyance of which was taken in the name of the plaintiff and his father as joint tenants. After his father's death the plaintiff became and still is the sole owner of the said property. On February 4 or 5, 1924, plaintiff says that he had a conversation on the premises with the defendant about letting to the defendant a flat either on the first floor or the ground floor of Ahmed Mansion on a lease for five years with an option to the defendant to continue the tenancy for a further period of ten years. Plaintiff stated in his evidence that the rent for either of the two floors was to be Rs. 325 per month, but it appears that the rent for the ground floor was to be Rs. 350 per month. A type-written agreement was shown to the defendant, and the terms mentioned therein were to be embodied in a 'pucca' lease. Defendant denies that he met the plaintiff either on February 4 or 5, and says that he saw the plaintiff and his father at their 'pedhi' at Khadak on February 6, 1924, and that at that interview the period of lease and the amount of the rent were agreed to, but that it was not then determined whether he should be given a flat on the first floor or on the ground floor. Defendant adds that the plaintiff's father and the plaintiff agreed to place one piece of expanded metal on the doorway. This interview was never put to the plaintiff in his cross-examination. It is true that in para. 2 of the plaint the date of the agreement is given as February 6, but in para. 2 of his written statement defendant does not admit the allegations contained in para. 2 of the plaint, save and except that he wrote a letter to the firm consisting of father and son on February 6, 1924 It is really immaterial whether the first interview took place on February 4 or 5 as the plaintiff alleges, or on February 6, as the defendant alleges. The parties are agreed that the conversation that they had was before the defendant wrote the letter to the plaintiff's firm on February 6, 1924. That letter refers to the conversation which the defendant had, and it states that the defendant has agreed to take a flat either on the first floor at Rs. 325 per month or on the ground floor at Rs. 350 per month for five years commencing from March 1, 1924. Defendant further stated in the letter that he had agreed to take either of the two floors on the 'conditions' mentioned in the letter. The letter ends by saying that the plaintiff's firm should consider the letter as an agreement. Plaintiff in his evidence stated that he had a conversation with his father on receipt of the letter, and they decided between themselves on February 7 to let a flat on the first floor to the defendant. On the same day or on the next day plaintiff met defendant and communicated the decision to him to give him the flat on the first floor. Defendant agreed to take the first floor flat on hire at Rs. 325 per month for five years commencing from March 1, 1924. According to the plaintiff defendant asked him to prepare a 'pucca' lease which plaintiff got prepared at his pedhi and it was signed by the parties on February 8, 1924. Defendant, however, says that after February 6 he met the plaintiff for the first time on the 8th when the lease was already ready engrossed and was signed. It was then lodged for registration. Plaintiff admitted execution before the Sub-Registrar of Assurances, but the defendant failed to do so. He entered into possession a day or two before March 1, 1924, and remained in occupation till about the end of August 1925, when he vacated, alleging that he was only a monthly tenant, and that he had given the proper and requisite notice to vacate. There was some correspondence between the parties in August-September 1925, and the plaintiff filed this suit in the beginning of January 1927 to recover damages for breach of the agreement on the part of the defendant to take a lease of the first floor for five years at Rs. 325 per month. Defendant relies on the letter which he wrote on February 6, 1924, as an agreement between the parties constituting a present demise between the parties, and the question is whether it is admissible in evidence for want of registration, as under Section 2(7) of the Indian Registration Act 'lease' includes an agreement for lease. According to the defendant the letter falls under Sections 17 and 49 of the Indian Registration Act and is inadmissible for want of registration. It is admitted that the premises which were actually let to the defendant were the first floor flat, and that the same was for the first time agreed to be let only on February 7 or 8, 1924. The letter is dated February 6 and in that letter the defendant agrees to take a flat either on the first floor, or a flat on the ground floor. It is clear, therefore, that on February 6 plaintiff had not decided which flat he would let to the defendant, and, in my opinion, the letter cannot create a present demise on February 6 of either the one or the other flat, when the option to give one of the two had not then been exercised by the plaintiff and his father. The option was exercised and the decision communicated to the defendant on February 7 or 8, so that there was no complete and concluded agreement on February 6. The letter is only a record of the conversation between the parties, and not quite a correct record either. The words in the letter asking the plaintiff's firm to treat the letter as an agreement cannot make it an agreement in the absence of confirmation by the lessor. Nor does the fact that either o:f the two flats was available for letting on February 6 serve to constitute a present demise on that day of the first floor flat. Counsel for the defendant mentioned the case of Ramjoo Mahomed v. Haridas Mullick (1925) I.L.R. 52 Cal. 695 but in that case as in many other cases there were two letters, one by the lessee agreeing to take the premises, and the other by the lessor confirming the agreement, and it was held that the terms of the agreement as mentioned in the two letters created an immediate interest in the property let. It may be here mentioned that the mere fact that the holding is to commence at some future date after the agreement does not make any difference, and even an option of one of two dates from which the holding is to commence is immaterial. The premises, however, which are agreed to be let must not be left indeterminate as was done by the letter of February 6. Moreover, the defendant stated in his letter that certain 'conditions' mentioned therein had already been agreed to between him and the plaintiff and his father. Plaintiff, however, stated that he did not agree to put two pieces of expanded metal as mentioned in the letter. It is true that the plaintiff or his firm did not reply denying that condition, but the lease was prepared and signed within a couple of days after February 6, and the plaintiff stated that no such condition was embodied therein. Though the letter mentions two pieces of expanded metal the defendant stated that only one piece was put up before he went into possession. Whether it was one piece or two pieces, it is not alleged anywhere that this was done between February 6 and 8, and if it was done at some later date it does not follow that the plaintiff agreed to that condition on February 6. I merely refer to this 'condition' in order to show that even on that additional ground there was no concluded and final agreement on February 6.

2. It has been held in Sultanali v. Tyeb (1929) 32 Bom. L.R. 188 and in various other cases, that the test to be applied in construing a document like the letter in question is to gather from it the intention of the parties and to see whether it contains words or terms which can be construed as a present demise. It has also been held that words like 'agree to let' and 'agree to take' are words of present demise. (See Bearpark v. Hutchinson (1830) 7 Bing. 178 But the words 'I agree to take' used by the intending lessee in the letter of February 6 cannot create a present demise of or interest in either of the two floors by the lessor, in the absence of any confirmation by the lessor; and, further, as I have stated before, it is common ground that the premises which were ultimately demised were not fixed and determined till after February 6. In my opinion the letter of February 6 cannot be construed as a present demise of the flat on the first floor of Ahmed Mansion and therefore does not require registration. (Sec Hemanta Kumari Debi v. Midnapur Zamindari Company (1919) L.R. 46 I.A. 240, 22 Bom. L.R. 488 The letter is, therefore, admissible in evidence.

3. The suit is one for damages for breach of the agreement and is filed within time. I will deal with the admission of the lease in evidence later. The agreement between the parties was orally arrived at. though only partially, either on February 4 or 5 or 6, but in any event before the letter of the 6th was written, and was not completed till either February 7 or 8, when it was finally decided to let the flat on the first floor to the defendant and the defendant agreed to take it. Counsel for the defendant argued that the plaintiff cannot rely on any oral agreement when the terms of the agreement are reduced to writing by virtue of Section 91 of the Indian Evidence Act. But all the terms of the agreement were admittedly not reduced to writing in the letter of February 6. As to the lease the defendant cannot be allowed to contend that it is inadmissible for want of registration on his part, and at the same time argue that the plaintiff cannot rely on any oral agreement because the terms have been reduced to writing in the form of a lease to which ho objects.

4. Counsel for the plaintiff' further argued that even if it was held that there was a present demise of the flat on the first floor, he would still be entitled to enforce his rights under the unregistered agreement by virtue of the provisions of the newly added Section 53A of the Transfer of Property Act, This part of the case has not been pleaded in the plaint, as the section was not in force when the suit was filed. But it is a point of law, and no amendment was strictly necessary, nor was any objection taken by the defendant on that ground. Section 53A deals with the doctrine of part performance of a contract, and is added by Section 16 of the Transfer of Property (Amendment) Act (XX of 1929). Section 63 of Act XX of 1929 lays down that certain amendments made by that Act shall not be deemed to affect the terms or incidents of any transfer of property before April 1, 1930. But Section 16 which introduces Section 53A is not one of them, and, therefore, by implication Section 53A can be said to have retrospective effect. That section gives statutory recognition to the equitable doctrine of part performance which Courts in India have applied in numerous cases, and which was applied in appropriate cases even by the Privy Council. (See Mahomed Musa v. Aghore Kumar Ganguli The agreement, however, must be in writing, in which the terms must be sot out with reasonable certainty, before the aid of the section can be invoked. If it is in writing, and the transferee has taken possession in part performance of the agreement and is willing to perform his part of the agreement, certain equities arise between the parties to it. The section provides that in such a case the transferor is debarred from enforcing any right against the transferee other than the right created by the agreement partly performed notwithstanding that the transaction has not been completed according to law. But it seems that all rights and liabilities under the agreement become mutually enforceable, provided all the other conditions of the section are fulfilled. The legislature could not have intended in recognising an equitable doctrine to do equity to one party to the agreement and not to the other. Counsel for the defendant argued that Section 53A did not apply as the defendant was not willing to perform the contract after August 1925. The defendant entered into possession and paid rent for a year and a half, and it is not necessary that his willingness should continue throughout the period of the agreement, if there are substantial acts of part performance which are unequivocally referable to the written agreement.

5. If I am right in holding that this action has retrospective effect, then the question arises to which of the two documents it applies, for the terms of the document must be reasonably certain. The letter of February 6, 1924, as I have held before, does not contain all the terms of a concluded agreement. It not only leaves the premises undetermined, but refers to the terms of a type-written agreement which are nowhere mentioned and are not in evidence before me. The 'pucca' lease was, however, signed by the parties on February 8, 1924, and its execution was admitted by the plaintiff', but the defendant failed to admit execution before the Sub-Registrar, though the plaintiff' says that he called upon the defendant to do so. Defendant says he does not remember having been called upon. But the fact remains that it was not registered as far as he was concerned. Is the lease then admissible, and if so for what purpose Section 49 of the Indian Registration Act lays down that no document required to be registered shall affect any immoveable property comprised therein or be received as evidence of any transaction affecting such property unless it has been registered. A proviso was added to that section by Section 10 of Act XXI of 1929, and it runs as follows :-

Provided that an unregistered document affecting immoveable property and required by this Act or the Transfer of Property Act, 1S82, to be registered may bo received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.

6. The lease, in my opinion, is admissible not only as evidence of part performance of the terms of the agreement contained therein, but also in order to show that the plaintiff can under Section 53A enforce his right to claim damages for breach of the agreement as provided by one of its terms. Both, the letter of February 6, 1924, and the 'pucca' lease are admissible and should be marked as exhibits in the case.

7. A question was raised whether apart from Section 53A the lease was admissible in evidence in the absence of admission of execution by the lessee, viz., the defendant. A lease has been defined by Section 105 of the Transfer of Property Act as a transfer by the transferor, who is called the lessor, of a right to enjoy an immoveable property for a certain time, for a consideration, and on the terms which are accepted by the transferee, who is called the lessee. Under Section 107 of the Act a lease, that is a transfer of an immoveable property, for a period exceeding a year can only be made by a registered instrument. It is the lessor who creates an interest in the immoveable property,, and it was argued that it might be sufficient if the lessor got the lease duly registered as was done in this case, for, the lessee only binds himself by covenants which are personal. There is nothing in the Indian Registration Act which makes the lease registrable by both the parties, though the Act provides the machinery to be adopted in cases where a party executing the lease denies its execution. All the relevant sections of the Act have been considered by their Lordships of the Privy Council in Mohammed Ewaz v. Birj Lall in which it was held that if the registering officer refused under Section 35 of the Act to register a document quoud the person who denied execution, the section could not be extended to destroy the operation of the deed as regards the person who admitted execution. The proviso to Section 23 of the Act shows that the Legislature contemplated a partial registration of a document. In that case the deed was a deed of sale, and all that the decision comes to is that the deed can be given in evidence against the person executing it. It does not decide the question as to what its effect is as regards the person not executing it. A lease, as I have stated, is made up of a transfer on certain terms, and the acceptance of these terms. Acceptance is defined by Section 2(b) of the Indian Contract Act as the act of the person to whom a proposal is made which signifies his assent thereto. The lease has been signed by the defendant, and he has, therefore, signified his assent to its terms. But a lease is made up of two parts, a transfer and the acceptance, and it has got to be registered when it is for over a year. It follows, therefore, that the acceptance must be registered too, and it can only be done when the acceptor admits his acceptance, in other words, admits execution. Counsel for the plaintiff relied on the case of Raja of Venkatagiri v. Narayan Reddi I.L.R. (1894) Mad. 456 and argued that the lease was admissible, apart from Section 53A of the Transfer of Property Act, as the suit was not filed on an alleged title under an unregistered lease, but was only an action for recovering damages for a breach of the agreement. That case differs from the case of Hurjivan Virji v. Jamsetji Nowroji I.L.R. (1884) Bom. 63 in which there was an alternative claim for damages also. The document was, however, got prepared by the lessee, signed by him, and handed to the lessor who refused to sign. The appeal Court held that the document was not admissible to establish any contract for the purpose of drawing an inference from it. I have not been referred to any subsequent case of this High Court in which that decision has not been followed, In fact the correctness of the Madras High Court decision has been doubted by Sir Dinshah Mulla in his commentary on Section 49 of the Indian Registration Act at page 178. In my opinion, therefore, apart from Section 53A of the Transfer of Property Act, the lease cannot be admitted in evidence.

8. I have been also referred to the recent judgment of their Lordships of the Privy Council in Ariff v. Jadunath Majumdar(2), in which the appellant had verbally agreed in 1913 to give the respondent a permanent lease of a plot of land and put him in possession but refused to grant the permanent lease in 1918 and filed a suit for ejectment in 1923. The Privy Council held that as the lease was not registered the appellant was entitled to eject the respondent ; but it was of the opinion that had the respondent's right to sue not been barred by limitation, as it was barred more than three years after the appellant's refusal in December 1918 to grant the lease, the respondent could have claimed execution of the lease and got it registered. It was held that the doctrine of part performance was not applicable, but in any event Section 53A could not have been applied as the agreement was oral and not in writing. If it was applicable, the equitable relief given by the section, it seems, would be available to the parties even after the period of limitation to file a suit for specific performance had expired, subject of course to the other provisions of the section. There is no question of specific performance in the present case, as the plaintiff has re-let the premises to another after giving notice to the defendant. His only claim is for damages for breach of the agreement, and the suit is within time.

9. The parties are agreed that the amount of damages payable by the defendant to the plaintiff is Rs. 5,000.

10. There will, therefore, be a decree for the plaintiff against the defend ant for Rs, 5,000 and costs and interest on judgment at six per cent. per annum till payment.


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