1. This is a defendant's appeal arising out of a suit to pre-empt two transactions, dated the 18th June 1919 and the 16th September 1919, in the form of perpetual leases. It was conceded on behalf of the plaintiff that there was no custom of pre-emption with respect to leases but his case was that these transactions were In effect sale-deeds in the garb of leases and were, therefore, liable to pre-emption.
2. On behalf of the defendant it was denied that these transactions were sale transactions. It may now be taken as undisputed that if these transactions were sale transactions, then the defendants admit that they were liable to pre-emption.
3. Both the Courts below, however, came to the conclusion that these two transactions were sale transactions and not leases. They accordingly decreed the suit.
4. The defendant Bhairo Tewari has come up in the appeal to this Court and on his behalf the finding referred to above is challenged.
5. Both these documents are similar in their nature and it will be quite sufficient for our purposes to consider any one of these. 6. The first one purports to be a perpetual lease of 5 Mghas 5 biswas and 8 dhurs for a premium of Rs. 493, the rent reserved being Rs. 5-5-0. The lease goes on to provide that the lessee, generation after generation; shall be entitled to remain in possession of the leased property as fattadar and would have the right to have his name recorded in the revenue papers as tenant and perpetual pattadar; that he would be liable to pay the rent reserved year after year and instalment after instalment; in the event of the rent falling in arrears, the lessor would have all the rights of an owner with respect to its realisation, but that there would be no right to have the lease cancelled, the rent enhanced or to eject the lessee.
6. According to the calculation made by the lower Appellate Court the Government revenue came to about 12 annas per bigha and rent reserved at Re. 1 per bigha. It was on this calculation that the Courts below were of opinion that the rent reserved was a nominal one.
7. In our opinion it is impossible to construe these documents as sale-deeds.
8. It is clear that the lessor and his representatives would for all time to come have the right to recover the rent reserved though it may be small. They would also under the law have the right of reversion in case the line of the lessees became extinct. As under the terms of this document the proprietary interest of the lessor has not ceased, there could possibly be no escheat to Government. The liability to pay Government revenue rests on the lessor, and it is difficult to see how he can escape it. It is inconceivable how at any future time it could be open to any of the representatives of the lessee to deny that the transaction was anything other than a lease or to refuse to pay rent. In spite of the direction as to non-enhancement of the rent, it is clear that if, at the next Settlement, the Government revenue were to be increased the lessee would be bound under Section 49 of the Agra Tenancy Act to submit to an enhancement of rent or allow the lease to be avoided. So long as these rights are reserved to the lessor, it is impossible to hold that this transaction is an out and out sale. It cannot be said that this document amounts to a deed of sale without also saying, that the provision as to the payment of rent was unenforcible. But it is not permissible for the lessee to urge this as it will be tantamount to pleading an agreement in variation of the terms of the registered document which Section 92 of the Indian Evidence Act prohibits.
9. The learned Vakil for the plaintiff has strongly relied on the case of Lalji Misir v. Jaggu Tiwari 7 Ind. Cas. 930 : 33 A. 104 : 7 A.L.J. 1022. The decision in that case, however, turned on the word 'intiqal' which was held to be comprehensive enough to include leases. In the course of the judgment there was a remark that the transaction was in reality a sale. It is possible that the Court did not thereby mean anything more than that, for all practical purposes, it was a sale.
10. In the case of Mohammad, Niaz Khan v. Mohammad Idrees Khan 44 Ind. Cas. 227 : 16 A.L.J. 233 : 40 A. 332 the main consideration which influenced the judgment was that, although the question had been raised in the pleadings, and there was a clear finding by the First Court that the disputed transaction was a sale, the lower Appellate Court omitted to consider it. The case is really an authority for the view that a Court is bound on the issue being raised to consider the real nature of the transaction. We do not think that it could have been intended that the relation of the premium paid to the value of the property and the smallness of the rent would in themselves be sufficient to prove that the transaction was a sale and not a lease. In England pepper corn rents are well-known.
11. Of course, it is possible to conceive of a case where, for instance, soon after the lease, there is a subsequent registered agreement giving up the right to recover rent or where the lease is followed by a surrender. The Court may then come to the conclusion that the two agreements were part and parcel of one and the same transaction, namely, a sale. There may also be cases where a sale is clothed in the garb of a usufructuary mortgage, the money advanced being equal to the value of the property and the terms such as to allow interest to go on accumulating so that year after year it becomes more and more impossible to redeem it. Then, again, there may ostensibly be deeds of gift, where consideration is paid privately. It is obvious that in all such cases the finding that the transaction amounted to a sale does not involve any variation of the terms of the registered contract.
12. The only ground on which the lower Appellate Court has proceeded is the. circumstance that a large premium has been paid and the rent reserved is very small. There are no other circumstances on which reliance has been placed. The inference drawn by the lower Appellate Court that the document must be construed as a deed of sale cannot, therefore, be treated as a finding of fact.
13. We accordingly allow this appeal, set aside the decrees of the Courts below, and dismiss the plaintiff's suit with costs.