1. On 29th November 1885, Khiyali Ram and Kanhai Singh, the predecessors-in-interest of defendants 3 and 4, that is, Sita Ram and Bhajan Lal, executed a document in which they say that they had with the permission of the zamindars built a house on their land and that they had agreed to pay a rent of one anna per year and to give the zamindars an opportunity to buy or take a mortgage of the house if at any time they intended to transfer it by sale or mortgage. The two men and their suceessors-in-interest mortgaged the house to persons other than the zamindars and the house was ultimately put to sale and bought by the mortgagees, that is, by the first two defendants. The plaintiff is one of the zamindars and he instituted the suit for possession of the house upon the allegation that the lease in favour of the successors-in-interest of Khiyali Ram and Kanhai Singh had determined by forfeiture because the title of the zamindars had been denied. He impleaded as defendant 6 the other zamindar who was entitled with him to a share in the property. It appears that this defendant had instituted a suit in the year 1937 in order to obtain a declaration that she and the plaintiff were the zamindars of the land upon which the house stood. In reply to that suit the purchasers under the mortgage decree had said that they did not admit the plaintiff's title and that as far as they knew their mortgagors had been the owners of the property. The learned Judge of the lower appellate Court passed a decree in favour of the plaintiff.
2. Three points have been put before me in appeal. The first point is that there never was a lease of the property because the document of 29th November 1885 showed the terms of the agreement between the parties and the terms were such that no lease could be created unless a registered instrument was executed by the lessors. The second point is that the defendants did not deny the title of the plaintiff or his co-zamindar but merely failed to admit it. The third point is that the Court should relieve the defendants-appellants against forfeiture if any forfeiture occurred. On the third point, it seems to me that we must be guided by the provisions of the Transfer of Property Act. According to the provisions of Section 111, a lease determines by a forfeiture in case the lessee renounces his character as such by setting up a title in a third person or by claiming a title in himself. There are provisions in the Transfer of Property Act, for relief against forfeitures of other kinds, but there are no provisions for relief against a forfeiture when the lessee renounces his character by setting up a title in himself or in a person other than the lessor. Learned Counsel has referred me to the case in K. Komalu Kutti v. P. Muhamed ('19) 6 A.I.R. 1919 Mad. 1106, but that was the case of an agricultural lease to which the provisions of the Transfer of Property Act did not apply and the learned Judges were perhaps justified in applying as rules of equity, justice and good conscience the principles evolved from the English common law on the subject. Where the Transfer of Property Act specifically says that the lease is determined by a forfeiture in case the lessee denies the lessor's title and makes no provision for relief against the forfeiture, it seems to me that the Courts cannot import into the Act a provision which does not exist in it. On the second point that a mere non-admission of the title does not amount to a denial, learned Counsel admits that he has no authority. It seems to me that forfeiture comes into existence when the lessee fails to admit that he is holding the property as such.
3. The appellants' first point is the strongest. There is no doubt that under the terms of the agreement which were evidenced by the document of 29th November 1885, the parties reserved yearly rent. If that was the nature of agreement, a lease in pursuance of it could only be created by the execution by the lessor of a registered instrument. No registered instrument was executed and it follows that there was no lease. Learned Counsel for the respondents has argued that in these circumstances we should infer that there was a lease on some terms other than those which can be inferred from the document of 29th November 1885. He has referred me to the cases in Ramchandra Agarwala v. Syameswari Dasya : AIR1925Cal1171 and Akloo v. Emaman ('16) 3 A.I.R. 1916 Cal. 358. With the greatest deference to the learned Judges who decided those cases it seems to me that they rather ignored the fact that a lease is a transfer of property and is not a mere agreement or contract. Whether or not there was an agreement to create a lease the fact is that no valid lease was executed and the result was that there was no transfer of property in favour of the lessees. The view of this Court always has been that a lease can be created only in the manner set forth in the provisions of the Transfer of Property Act.
4. I may refer to the cases in Kedar Nath v. Shanker Lal ('24) 11 A.I.R. 1924 All. 514, Safdar Ali v. Ambika Prasad Dube : AIR1930All678 and Sheo Karan Singh v. Parbhu Narain Singh ('09) 31 All. 276. The fact that the proposed lessees were in possession of the property does not mean that a valid lease was created in their favour or that the interests of lessees in fact passed to them. They were in possession of the property without any title thereto and consequently they must be treated as licensees. The learned Judge of the trial Court has argued that the persons in possession could not be treated as licensees because the agreement by its nature was an agreement to lease and not an agreement to allow the persons to hold possession as licensees. The fallacy in this argument to my mind is that the rights of a lessee are not created necessarily by an agreement. They are created at a time when a transfer is made in accordance with the provisions of the law. I may mention the analogy of a sale. There may be an agreement to sell certain property and before such time as the necessary instrument is executed and registered the proposed vendee may be put in possession. He does not thereby become a vendee if the property is worth more than Rs. 100.. If the necessary instrument is not executed and registered the person in possession must remain in possession as a licensee. It is open to him, as it is to a proposed lessee, to compel the transferor to execute the necessary instrument under a decree for specific performance, but if he fails to do so, he acquires no title in the property and if he is allowed to remain in possession his possession is that of a licensee. In these circumstances it appears to me that the plaintiff is not entitled to rely upon a forfeiture which would come into existence only in the case of a lease which was never made. It is unnecessary to discuss the matter further but it does appear from the docucment of 29th November 1885 that the persons who executed it had built a house in pursuance of permission given by the zamindars and it would therefore appear that the provisions of Section 60, Easements Act, would apply to the case. In my judgment the suit as framed cannot succeed and I therefore allow the appeal and dismiss the suit with costs throughout. Leave to appeal under the Letters Patent is allowed.