M.M. Gupta, J.
1. This second appeal preferred by the defendant against whom the suit for eviction and IN recovery of arrears of rent has been decreed raises a question of law on which there are presidential authorities of our High Court which are conflicting.
2. It appears that on 13th Nov. 1962 a document of lease was executed mutually by the parties creating a lease for manufacture of soap far a period of eleven months. The rent under that lease was payable from month to month. The respondent had given one month's notice for determining lease under Section 106 of the T. P. Act. The appellant claimed that this notice was invalid as the lease was compulsorily registrable but it was not registered. It was, therefore, an invalid lease. Thirty days notice determining the lease was invalid as it was for manufacturing purpose and requires six month's notice as laid down under Section 106 of the T. P. Act. The decision of the lower appellate court having gone against the appellant he has preferred this appeal.
3. It has to be determined in this case whether the notice given in this case was valid or not. It is not disputed that the lease which was executed in this case was one for manufacturing purpose but the lease was for eleven months and the rent was to be paid from month to month. Further, it is also admitted by the parties that the lease in question was inadmissible in evidence for want of registration. Under Section 107 para (2) of the T. p. Act all other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Since a lease was executed in this case but it was not registered it is, therefore, inadmissible in evidence-Section 49 of the Indian Registration Act provides that no document required by Section 17 or by any provision of the T. P. Act, 1882 or any other law for the time being in force to be registered shall be received as evidence of any transaction affecting such property or conferring such power or creating such right or relationship unless it has been registered. However, there is a proviso appended to this section that an unregistered document required to be registered may be received as evidence of any collateral transaction not required to be affected by registered instrument. So far as the instant case is concerned, the question arises whether for the term of the tenancy the lease which requires compulsory registration and is not registered can be looked into. In the instant case the lease admittedly was for manufacturing purpose. Under Section 106 of the T. P. Act there is a presumption of law that if a lease is for purposes of manufacture it would be presumed to be a lease from year to year in the absence of a contract to the contrary. In Ram Swarup Jain v. Janki Devi Bhagat Trust (AIR 1974 All 424) brother Banerji, J. held that a document of lease which is reduced in writing is required to be registered under Section 107 of the T. P. Act and cannot be received in evidence in view of the provision of Section 49 of the Registration Act. He went on holding the terms and conditions of the lease could, however, not be relied upon since the document was unregistered. One of the terms was that the tenancy was terminable at the notice of 15 days. The law requires six months' notice to terminate a lease for a manufacturing purpose. That requirement could be waived if there was a contract to the contrary. It was the plaintiff's case that the said provision had been varied by the lease deed, Ex. 12. But if the lease deed itself could not be looked into since it was unregistered, there was in effect no contract to the contrary in existence. In this view of the matter it will be clear that the notice terminating the tenancy giving a month's time did not comply with the requirements of Section 106 of the T. P. Act. This case fully supports the contention of the appellant's counsel.
4. The respondent's counsel has contended that the term of the lease is only a collateral transaction and under the proviso to Section 49 of the Registration Act it can be looked into. He has placed his reliance on the 1956 All LJ 625 (Lala Fateh Chand v. Mst. Radha Rani). In that case it was held that the lease if unregistered was inadmissible in evidence except for collateral purposes, as provided in Section 49 of the Registration Act. Gurtu J. went on to observe: 'I think that the term of the expired lease which provides that the tenant can be ejected upon one month's notice can be looked at because looking at that term in connection with the holding over would be looking at the lease for merely a collateral purpose; the collateral purpose being to find out whether it is to be a one month's notice or a six months' notice to quit to determine the holding over. What a collateral purpose is cannot be precisely defined. It must vary with the circumstances of each case. Leases which were not registered but were required to be registered and were therefore inadmissible for a purpose other than a collateral one have been looked at in reported cases in order to ascertain the nature of the possession of the tenant, the date from which the tenancy began and for determining the period of tenancy and for finding out what the rent reserved was. Since the courts have treated all these purposes as collateral, I would have been prepared even to go so far as to hold that it would be a collateral purpose to look at a term like the present one in this lease even in a case where the tenant was still holding under the un-expired lease and not merely holding over under Section 116 of the T. P. Act.' This view fully supports the case of the respondent that the term of the lease can be looked into as it was for a collateral purpose. In Ram Kumar Das v. Jagdish Chandra (AIR 1952 SC 23) it was observed (at p. 27):
'It is not disputed that the contract to the contrary, as contemplated by Section 106, T. P. Act, need not be an express contract; it may be implied, but it certainly should be a valid contract. If it is no contract in law, the section will be operative and regulate the duration of the lease. It has no doubt been recognized in several cases that the mode in which a rent is expressed to be payable affords a presumption that the tenancy is of a character corresponding thereto. Consequently when the rent reserved is an annual rent, the presumption would arise that the tenancy was an annual tenancy unless there is something to rebut the presumption. But the difficulty in applying this rule to the present case arises from the fact that a tenancy from year to year or reserving a yearly rent can be made only by registered instrument, as laid down in Section 107, T. P. Act. The Kabuliyat in the case before us is undoubtedly a registered instrument, but ex concession it is not an operative document at all and cannot consequently fulfill the requirements of Section 107, T. P. Act'
5. From the view taken in the aforementioned Supreme Court case it would appear that if the document is a unregistered document it would operate on the presumption raised under law. Under Section 106, T. P. Act, it being a lease for manufacturing purpose, it would require six months' notice for determination of the tenancy. It does not appear that this case was brought to the notice of Gurtu J. when he decided the reported Lala Fathe Chand's case in 1956 All LJ 625 as it does not find any reference in that judgment.
6. The view taken is Kishan Lal v. Lal Ram Chander, (AIR 1952 All 634) also appears to be contrary to the view taken in AIR 1952 SC 23, Ram Kumar Das's case (supra).
7. In Radha Ballabh v. Bahore Ram Chand (AIR 1955 All 679) it was held that, 'there was a specific contract that the rent would be paid from month to month. Further the lease was for a fixed period of eleven months only. Consequently, under the contract it could not be said that the lease was from year to year and that as such it could only be determined by a six months' notice'. It was also held that, 'renewal of a lease from year to year or from month to month, according to the purpose for which the property is leased' is to be presumed only when there is no 'agreement to the contrary.' Where there is an agreement, 'it cannot be held that by holding over the defendant appellant acquired greater rights than what he possessed under the original lease.' However, in this case the effect of non-registration of the lease and its admissibility on that account was not considered.
8. In the light of the view taken in AIR 1952 SC 23 at page 27 it cannot be held that the view taken in 1956 All LJ 625 (supra) or in AIR 1955 All 879 (supra) was the correct view. As laid down in AIR 1952 SC 23 (supra) the term of the lease should be determined according to the presumption of law raised under Section 106, T. P. Act. It is not claimed that the lease in question was not for manufacturing of soap. The lease according to Section 106, T. P. Act would be presumed to be from year to year and would require six months' notice.' It has been pointed out that the appellant had admitted in his statement that he paid rent from month to month, That, however, cannot be treated to be the conclusive evidence of the fact that the lease was from month to month. The notice in this case, therefore, must be held to be invalid.
9. The appeal is, therefore, allowed and the suit of the plaintiff in regard to the relief for ejectment shall stand dismissed. However,in the circumstances of the case the parties shall bear their own costs.