1. This is a suit by a purchaser against the vendor of an immoveable property for recovery of the amount deposited as earnest under the agreement of sale and also for the costs of the abortive sale. The property agreed to be sold was house No. 739, under scheme No. 3 at Khar. The vendor by the agreement declared that the tenure of the land contracted to be sold was freehold. The title was rejected by the purchaser on the ground that the vendor had failed to prove that the tenure was freehold.
2. It was contended on behalf of the defendant that the term that the tenure was freehold had been inserted in the agreement by the common solicitor of both the parties, although the defendant had made plain to him that she did not know what the term meant and had only told the solicitor that she was the owner of this property. Two issues were raised on this plea, being issues Nos. 1 and 2; but after some evidence had been led on these issues, namely the evidence of the defendant herself, while she was under cross-examination, Mr. Madon for the defendant stated that he did not desire to press these issues with the result that the only question which I have to decide is whether the defendant has made out a marketable title to the property according to the terms of the agreement of sale.
3. The agreement of sale in para. 3 thereof states specifically this :
The vendor hereby declares that the tenure of the land contracted to be sold is freehold. If the land shall turn out to be not of that tenure or the title be not approved by the purchaser's attorneys this agreement shall be null and void at the option of the purchaser and the said sum of Rs. 2,000 received as earnest money shall in such case be fothwith returned by the vendor to the purchaser and the vendor shall also pay all costs charges and expenses incurred by the purchaser upto that time.
The schedule to the agreement contains the following description of the property:
All that piece or parcel of land of the freehold tenure containing by admeasurement 600 square yards or thereabouts under E ward bearing house No. 739 situate at Khapoli Road under scheme No. 8 at Khar.
The question I have to consider is whether a title has been made out to the property in terms of the agreement.
4. Now the term 'freehold' has no well-defined meaning in Indian law. So far as I am aware, the word has been used only in one Indian statute, namely, the Foras Act (Act VI of 1851), which in its preamble recites that 'the East India Company are entitled to the 'freehold reversion' of Foras Lands.' Now Foras lands were lands reclaimed from the sea which certain persons were allowed to occupy for the purpose of improving them subject to payment of rent but without any lease or grant. The Act extinguished the rights of the East India Company in certain portions of Foras lands, delineated on a map, in favour of persons then in occupation and vested other portions of land in the said Company free from all rights therein of all persons for public purposes such as roads and tanks. The use of the expression 'freehold reversion' in this preamble does not, I fear, give any guidance for the interpretation of the word 'freehold' in relation to lands in India.
5. The term is borrowed from the law of real property in England, which until Lord Birkenhead's Act had been one of the most difficult branches of English law. It is unfortunate that the term should have been introduced into conveyancing in India where the history of land tenures has little in common with its counterpart in England; but since the term finds a place in the agreement of sale which I have to interpret, I have to assign to it a legal meaning as closely resembling the meaning of the term in England as Indian conditions permit.
6. In England, in theory all land belonged to the King, who granted it to certain people to hold from him in return for certain services. These people became the King's tenants and they in their turn made grants to other persons to hold portions of such land in return for services rendered by them. This process known as sub-infeudation continued indefinitely creating a series of tenants, the King's tenant being the tenant-in-chief, until sub-infeudation was prohibited by the Statute of Quia Emptores (18 Edw. I, c. 1). If the services to be rendered were fixed, e.g. to supply a certain number of soldiers or to plough certain acres of land, the tenant was a freeholder for his services were free; but if they were not fixed in their nature, e.g. where the tenant was to work for two weeks in a year at any kind of work that his landlord may choose, his services were considered to be servile in nature or not free and his tenure was copyhold. Services were subsequently commuted into payment of money, but the distinction between freehold and copyhold continued. In addition to these tenures, if a tenant granted an estate for a fixed number of years, it was a leasehold. 'Freehold' is thus denned by Topham in his Real Property, 14th edn., at p. 14 :
Freehold estates were estates in land which were not limited to expire within a certain time, and for which the services were never of an unfree nature.
One essential characteristic of a freehold in England therefore appears to be that the estate is not liable to terminate after a fixed period of time.
7. The rights that a free-holder had in relation to his holding prior to Lord Birkenhead's Act were not at all times attached to the possession of a fee but were a matter of growth over a very long period of years. These rights are all capable of being modified, altered or abolished by legislation; and for the purposes of interpreting the term freehold in a document relating to land in India it would be wrong to determine what is or is not a free-hold by reference to the rights enjoyed by a freeholder in England at any given time in the past. Of course, after Lord Birkenhead's Act came into force in 1926, the only form of tenure in England is 'Free and Common Socage,' copyholds having been converted to that tenure. Freeholds have now come to be recognised in England as practically equivalent to absolute property.
8. I will next consider shortly the theory of land tenures in the Bombay Presidency. Under Section 37 of the Bombay Land Revenue Code all lands which are not the property of anybody belong to the Crown. The Land Revenue Code extends to the whole of the Presidency except the City of Bombay, but the theory in the City of Bombay is not any different; the only difference is that the lands in the city are governed by the Bombay City Land Revenue Code (V of 1879). Now lands are divided into two classes : alienated and unalienated. Under Section 3(20) 'alienated' means, transferred in so far as the rights of the Provincial Government to payment of the rent or land revenue are concerned, wholly or partially, to the ownership of any person. These lands were formerly called 'Dumala' or 'Inam' lands as opposed to 'Khalsa' or 'Rayatawa' lands. Alienated lands include inams, watans, and jhagirs in respect of some of which in any event some services have to be rendered to the Crown. In respect of the unalienated lands the holder is an 'occupant' the term being denned in Section 3(16) thus :
'occupant' means a holder in actual possession of unalienated land, other than a tenant, provided that where the holder in actual possession is a tenant, a landlord, or superior landlord, as the case may be, shall be deemed to be the 'occupant.'
There may also be a tenant in respect of unalienated lands and a 'tenant' is denned in Section 3(14) thus :
tenant' means a lessee, whether holding under an instrument, orunder an oral agreement, and includes a mortgagee of a tenant's rights with possession; but does not include a lessee holding directly under the Crown.
9. It is apparent, therefore, that except perhaps in the case of some alienated lands with which I am not concerned in this case, the use of the term 'freehold' in relation to land in the Bombay Presidency is inappropriate and inadvisable. But since it has been used in the agreement of sale Which I have to interpret, I must give some meaning to it. It seems to me that having regard to the nature of a freehold in England, both from the point of view of its origin and its incidents, it would be appropriate to consider that estate in land as freehold in India which is not liable to terminate after a fixed period of time and in which the owner has an estate as nearly as possible equivalent to absolute property.
10. In the present case, in addition to the declaration that the tenure is freehold, as I have pointed out above, the schedule gives a description of the property which shows that it is a house under scheme No. 3, at Khar. It is common ground that the scheme referred to is the town planning scheme; and I will therefore have to consider the meaning of freehold in relation to land held under this scheme in the present case.
11. The Bombay Town Planning Act (Bom. I of 1915) 1915, in its preamble states;
Whereas it is expedient that the development of certain areas should be regulated with the general object of securing proper sanitary conditions, amenity and convenience to the persons iving in such areas and in neighbouring areas;-
The Act then provides for the preparation and sanction of a draft scheme of town planning and upon this being done the Provincial Government is under an obligation under Section 29 of the Act to appoint an arbitrator with certain powers. It then provides for a final scheme feeing sanctioned by the Government. Then Section 41 provides inter alia as follows :
On the day on which the final scheme comes into force.... (6) all rights in original plots which have been re-constituted shall determine and the reconstituted plots shall become subject to the rights settled by the arbitrator.
Now the town planning scheme No. 3 at Bandra, as settled by the arbitrator, was sanctioned to take effect from December 15, 1940, under Government Notification, General Department, No. 879 dated November 2, 1940, published at p. 3447 of Part I of the Bombay Government Gazette, dated November 7, 1940. Under the scheme a list of owners was published. Serial No. 248A shows in the column 'Name of Owner' Mr. Vasantrao Anandrao Vyavaharker and Bai Sunderabai Vasantrao Vyavaharker and the tenure is shown as 'Khalsa'. It is common ground that serial No. 248 A under this scheme is house No. 739 which is agreed to be sold. Now the term 'owner' has been denned in Section 2(c) of the Town Planning Act as follows :
'owner' includes an owner in severalty, in common or joint; and includes also an occupant as defined in Clause (16) of Section 3 of the Bombay Land Revenue Code, 1879.
Now under the Bombay Land Revenue Code, where land is assessed for the purposes of agriculture only, if the occupant desires to use it for non-agricultural purposes, he has to obtain the Collector's permission to do so under Section 65. The land in question had been assessed for the purposes of agriculture only. The defendant purchased this land from the Vyavaharkars, on January 17, 1941. She then applied for permission to use the land as a building site and that permission was granted to her by a sanad bearing date May 3, 1941. The sanad is on a printed form with blanks filled in and a few printed terms cored out or substituted. After reciting that an application had been made, the sanad proceeds to certify that permission to use for building purposes was granted subject to the provisions of the Bombay Land Revenue Code and on the conditions set out in the sanad. The first condition relates to assessment and fixes the assessment for a period of 50 years with a proviso that on the expiry of the said period revised assessment which may be fixed by the Collector under the said Code would have to be paid. The second condition merely provides that the land shall be used for the purposes specified in the third condition, which in its turn provides that a residential building shall be put up within three years in compliance with the regulations contained in the second schedule. The fourth condition relates to the liability for rates. The fifth condition provides a penalty for contravention of any of the conditions and the sixth condition specifically provides that the grant shall be subject to the provisions of the Land Revenue Code. We then have the schedule which contains the building regulations. The first condition restricts the area on which the building is to be put up. The second and third conditions have been struck out in the sanad. The second was intended to provide that a certain plot shall be left open to the sky and the third that the latrines and cesspools or stables shall be constructed only in certain specified spaces. The fourth condition provides that the building shall not be more than 30 feet high and the fifth condition states that it shall be a residential building only. The sixth condition which is in print provided that the building shall not be used as a shop etc. but that is struck out. Then there are special conditions which have been included in this sanad. Condition (a) provides that open margins to the buildings shall be left as shown on the plan attached, (b) that the main building shall not be more than one upper floor, all the remaining structures being ground floor only, without special sanction, (c) that the height of the compound wall or fence shall not exceed the prescribed limit and (d) that no well shall be sunk without the previous permission of the Collector.
12. It is common ground that the conditions relating to the building imposed on the defendant were not any different from those imposed on the owners of other plots in the said scheme, and they appear to have been imposed for the purpose of securing proper sanitary conditions, amenity and convenience in the town planning area.
13. The common attorneys for the vendor and the purchaser Messrs. Taher & Co. took the somewhat extraordinary view that the property was a leasehold. In requisition 8 they stated :
It is provided in the said Sanad that the assessment fixed shall be revised alter the expiration of the first fifty years. The property is therefore a, leasehold property and not a freehold tenure as agreed upon.
They rejected the title on that ground. They adhered to this position in the plaint in para 5 whereof they state :
In the course of investigation of title to the said property it was ascertained that the tenure of the land relating to the property agreed to be sold was leasehold one and that the said lease was for a term of fifty years revisable after the said period.
Mr. Chitre for the plaintiff has not seriously contended that the property is leasehold; but he drew my attention to Anderson's Manual of Revenue Accounts, Village Form No. 2, at p. 27. One of the columns in the form is headed 'The name of the first Lessee or Grantee.' Mr. Chitre, therefore argued that in any event Anderson thought that an occupant of the land used for non-agricultural purposes was a lessee. It is for me to determine whether he is or is not a lessee; and the opinion of Anderson would have carried the matter nowhere, But in point of fact it is not even correct to state that Anderson considered him a lessee. If one turns to the remarks on village Form No. 2 which appear at p. 29 of the same volume Clause (3) thereof states :
To distinguish between lands permanently or for a long term leased, granted or assigned and lands temporarily leased or assigned five years should be taken as the limit.
This shows that Anderson himself made a clear distinction between leases and grants and there is no reason to suppose that he classified an occupant of un-alienated land as a lessee. Unless he was a lessee, he obviously falls within the alternative description of grantee. I do not think it can for a moment be suggested or seriously argued that the land in question is a leasehold, land. The fact that assessment is liable to be revised after 50 years does not make the land a leasehold for fifty years; nor is the interest of the defendant terminable at the end of fifty years. It continues indefinitely subject to the payment of such assessment as may be levied from time to time under the provisions of the Land Revenue Code.
14. Mr. Madon for the defendant has urged that the land is freehold because it is transferable and heritable. Section 73 of the Land Revenue Code makes an occupancy generally speaking heritable and transferable. In England in the earlier times freehold was not necessarily heritable and indeed freeholds were classified into 'freeholds of inheritance' and 'freeholds not of inheritance' Similarly, in England freeholds were not transferable prior to the Statute of Quia Emptores. Heritability and transferability were not at all times incidents of a freehold in England; and by themselves, therefore, they are not sufficient to determine what is a freehold. Nonetheless it is quite obvious that they are two of the most important, attributes of absolute property and it would be difficult in the present times to say that any property was freehold which did not have these two attributes.
15. Mr. Chitre for the plaintiff has urged that the property is not freehold because it is assessable to land revenue. I do not think this is a sound argument. It is true that certain lands are free from assessment in India, but there is no doubt that the general rule is as laid down in Section 45 of the Land Revenue Code that all land is liable to pay land revenue. The liability for payment of land revenue cannot in my opinion affect the question as ten whether the land is or is not freehold. Freeholders in England had to render services to the Crown which have since been commuted into money payment and undoubtedly today freeholders are liable to pay land taxes in England. A freehold does not mean land held free from payment of assessment or taxes.
16. Mr. Chitre next drew my attention to several disabilities from which an occupant suffers under the provisions of the Land Revenue Code. All these disabilities are collected under the heading 'What an occupant is not entitled to do' by Mr. Gupte in his commentary on the Land Revenue Code third edition, at p. 87. Mr. Chitre pointed out that a freeholder in England did not suffer from some of these disabilities. That no doubt is perfectly true in relation to the rights of a freeholder as they ultimately emerged in England. But these are disabilities which the defendant shares in common with all other occupants of unalienated lands; and if Mr. Chitre's contention was right, there can be no freehold at all in relation to unalienated lands in India. The highest form of an estate in unalienated land is that of occupancy, and if the term freehold is used at all in relation to unalienated land as it has been in this agreement of sale, it can only apply to the estate of an occupant and to no other.
17. Mr. Chitre next urged that in the sanad, the provisions whereof I have summarised, there are restrictions imposed regarding the building to be put up by the defendant. These are restrictions on user and he submits that they derogate from the nature of a freehold. Here again, these restrictions are imposed on the defendant in common with all owners in the town planning scheme; and in considering what is the nearest approach to ownership under the town planning scheme, I cannot attach any importance to these restrictions. Similar restrictions, moreover, can well have been imposed on any building sites by legislation, whatever the nature of their tenure.
18. I am, therefore, satisfied that the defendant has an estate in the land agreed to be sold which is not terminable after a fixed period and which is as near as possible equilvalent to absolute property within the frame-work of the town planning scheme, it being the highest form of estate that any one can have under the scheme. I am, therefore, of the opinion that the defendant had made out a good title according to the terms of the agreement of sale and the title was wrongfully rejected by the plaintiff.
19. The result therefore is that the suit will be dismissed with costs. On the counterclaim there will be a decree in favour of the defendant in terms of prayers (a) and (b). Costs of the suit fixed at Rs. 600-0-0 and of the counterclaim at Rs. 500-0-0.
20. Plaintiff to pay costs of the notice of motion dated March 17, 1947.