John Wallis, C.J.
1. In this case the parties by an unregistered agreement Exhibit B, dated 4th March 1908, agreed for mutual convenience to an exchange of certain plots of land forming part of their adjoining house sites. Exhibit B shows that the agreement was come to in the presence of mediators, and the effect of the oral evidence is that it was these mediators who settled the amount of the cash payment to be made by the first defendant to the first plaintiff to equalise matters, but Exhibit B is in terms an agreement signed by the party and we see no sufficient reason for treating it as the Subordinate Judge has done, as an award or for considering whether as such it is exempt from the provisions of the Registration Act. It is therefore necessary to deal with rate Plaintiff's claim that owing to this want of registration he is entitled to recover back the land given by him in exchange to the defendant even though the defendant has erected on the land one of the walls of his new house which has cost over 40,000 rupees and the removal of the wall would bring down the house and although nearly a year after the exchange, when the defendant was beginning to build, the plaintiff objected to the extent of the land awarded to him in exchange and obtained a further payment of Rs. 525 from the defendant. The parties have since quarrelled and it is scarcely denied that the plaintiff's object in bringing the suit is rather to injure the defendant than to benefit himself. It is however argued that in default of registration the land remained the property of the plaintiff, as, under the Transfer of Property Act the transfer could only be made by registered instrument and that the defendant is not entitled to the benefit of any of the equities which English Courts raise in such a case against the application of the Statute of Frauds. As observed in Maddison v. Alderson (1883) L.R. 8 Ap. Cas. 467 that statute did not make the transaction itself void, whereas it is contended that was the effect of the Transfer of Property Act and the Pull Bench decision of this Court in Kurri Veera Reddi v. Kurri, Bapi Reddi I.L.R. (1904) M. 336 was relied on. It was held in that case, where the price had been paid and possession delivered but the sale deed had not been registered, that the vendor was entitled to get back the property and that the contract to sell afforded no defence even though the defendant's right to sue for specific performance was not barred at the institution of the suit. White, C.J. arrived at this conclusion with some hesitation having regard to the observations of their Lordships of the Judicial Committee in Immudipattam Thirugnana Kondama Naik v. Periya Dorasami I.L.R. (1900) M. 377 and it may be necessary when the time comes to consider how for the decision of the Full Bench can be reconciled with the very general language used by their Lordships in the more recent case in Mahomed Musa v. Aghore Kumar Ganguli I.L.R. (1915) C. 801, though no doubt the transaction there in question took place before the passing of the Transfer of Property Act and the effect of its provisions is not expressly referred to in the judgment.
2. But assuming Kurri Veera Reddi v. Kurri Bapi Reddi I.L.R. (1904) M. 336 , to be correctly decided I am not prepared to hold that it involves the proposition that where there is no registered document no amount of acquiescence on the part of the transferor will bar his right to get back the property within the statutory period. Where a lessee for a limited term erects buildings on the land and the lessor stands by and says nothing it was no doubt held in Ramsden v. Dyson (1966) L.R. 1 H.L. 129 and in Beni Ram v. Kundan Lal I.L.R. (1899) A. 496 that the mere acquiescence of the lessor will not debar him from recovering the land at the expiry of the term. In Immudipattam Thirugnana Kondama Naik v. Periya Dorasami I.L.R. (1900) M. 377 the plaintiff sued in the year 1895 for a declaration of his title and for redemption. The mortgage in 1882 by the plaintiffs father in favour of the mortgagees provided that on redemption the property should be handed over to the contesting defendant, but their Lordships found not only that there was no registered transfer as required by the Transfer of Property Act but that it was not proved that there was any valid contract by the plaintiff's father to make the transfer to this defendant. If there had been such a contract their Lordships were of opinion that it would have been a good defence as the defendant might call on the transferor's heir to implement the contract - and this though the suit was brought more than 12 years after the date of the alleged transfer. The present case is undoubtedly much stronger. Not only was there a contract to exchange but it was fully performed and long afterwards, the plaintiff stood by and acquiesced in the defendant's building and obtained a further payment from him. In these circumstances, putting aside the conveyance altogether I think the plaintiff is estopped. Kay, J. in Mc. (1915) L.R.A.C. 599, which were cited before us as supporting the same view. I would therefore uphold the decree though on different grounds and dismiss the appeal with costs. In the result the appeal is dismissed with costs.
Seshagiri Aiyar, J.
3. I have the misfortune to differ from the learned Chief Justice. The main facts are not in dispute. By a deed dated the 4th March 1908, there was an exchange of building sites between the 1st plaintiff and the 1st defendant. The 1st defendant erected a wall on the exchanged site and put up a substantial building. This suit was instituted in 1911 for recovery of site after removing the building on it. The case for the plaintiff is that as the deed was not registered no title passed to the plaintiff. The Subordinate Judge held that the document was not a deed of exchange and that the real exchange was effected by the award of arbitrators. Mr. Krishnasawmi Aiyar for the respondents drew our attention to the evidence on this point. We feel no hesitation in holding that the document is a deed of exchange and that there is no satisfactory evidence to prove that the arbitrators gave an award as to the exchange. The evidence does not show that there was any antecedent dispute relating to the exchange. There is no reference in writing. On the evidence it is clear, that all that the mediators were called upon to do was to fix the price to be paid by the defendant as he was taking a larger extent than the plaintiff obtained from him. The evidence on the side of the plaintiff is clear and consistent and we accept that as being more in accordance with the probabilities of the case. We cannot accept the finding of the Subordinate Judge on this point.
4. The question of law arising on these facts is whether the plaintiff is not entitled to recover possession, because of his conduct in allowing the 1st defendant to erect a substantial building at a. great cost. There can be no doubt that the plaintiff has no merits and his conduct has not been above-board. Still, if the law is in his favour, the Court will not be justified in refusing him relief.
5. The Full Bench decision of this Court in Kurri Veera Reddi v. Kurri Bapi Reddi I.L.R. (1904) M. 336 lays down that if the party resisting possession has no statutory or prescriptive title, he cannot rely on equities to resist the suit. Mr. Krishnasawmi Aiyar contended that this decision must be taken to have been overruled by the decision of the Judicial Committee in Mahomed Musa v. Aghore Kumar Ganguli I.L.R. (1915) C. 801 : 29 M.L.J. 548. I am unable to agree with this contention. In the case before their Lordships, there was a compromise in a suit. The compromise with reference to certain portions of it should have been registered. This was not done. But in pursuance of the terms, the parties were placed in possession and dealt with the properties as owners. Their Lordships held 'that even although the Razinamah and the decree taken together were considered to be defective or inchoate as elements making up a final and validly concluded agreement for the extinction of the equity of redemption, the actings of parties have been such as to supply all such defects.' Before the Transfer of Property, Act, the law did not prescribe any formalities for conferring title. Under the old Registration Regulations and Acts, if a document of a particular description was in writing, but was not registered, it was not receivable in evidence. Therefore the document commented upon by their Lordships was not ipso facto invalid, only it was not receivable in evidence. To such a case, the decisions which construe the Statute of Frauds in England were held applicable. As pointed out by Mr. Sreenivasa Aiyangar, the reference in the judgment of the Judicial Committee to Maddison v. Alderson (1883) 8 A.C. 467 shows that their Lordships were not considering cases for which the statute has prescribed a particular form for conferring title, The judgment of some of the noble Lords in that case would seem to show that the principle of equitable estoppel can apply only to executory contracts and not to executed contracts. See specially the judgment of Lord Blackburn. I do not-think that the Judicial Committee intended to lay down that even where a statute enjoins that title would pass only if certain formalities are complied with, conduct and acting can be relied upon to supplement an inchoate title. Section 54 of the Transfer of Property Act says that a 'transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.' The second clause of Section 118 is 'A transfer of property in completion of an exchange can be made only in the manner provided for the transfer of such property by sale.' The use of the word 'only' in these sections excludes the possibility of title being acquired within the statutory period by any other process. I feel no doubt that their Lordships of the Judicial Committee did not intend to override statutory requirements by their observations. Their Lordships have always held with reference to Indian enactments, that 'the essence of a code is to be exhaustive.' See Bal Kishen Das v. W.F. Legge I.L.R. (1899) 149, Dhanipal Das v. Manesher Bahsh Singh I.L.R. (1906) A. 570, Gokul Munder v. Pudmanand Singh I.L.R. (1902) C. 707, Webb v. Macpherson I.L.R. (1903) C. 57, and Mulraj Khatau v. Vishwanath Prabhuram Vaidya I.L.R. (1912)B. 198. I am therefore of opinion that Kurri Veera Beddi v. Kurri Bapi Reddi I.L.R. (1904) M. 336, is unaffected by Mahomed Musav. Aghore Kumar Ganguli I.L.R. (1915) C. 801 : M.L.J. 548.
6. The next branch of the argument of Mr. Krishnaswami Aiyar relates to estoppel, If I understood him aright he does not claim that the conduct of the plaintiff has given him a title to the property; his position-is that courts should not afford relief to the plaintiff as he is not entitled to it by reason of his conduct. In other words, although in law the plaintiff has a title to recover, courts should reject his claim on grounds of equity. Before I deal with the cases quoted by the learned Vakil, I shall refer to the principles which this contention seems to offend. The learned Vakil for the appellant invoked the aid of the well-known principle that there can be no estoppel against law. I shall state what, in my opinion, are the uses and limitations of this rule before applying it to the present case. The rule of estoppel is one of evidence. It ought not to be allowed to prevail against a statutory right. There are many instances in which parties have been held entitled to equities, using that term in the sense of estoppel, although as pointed out by Jenkins, Chief Justice, in Municipal Corporation of Bombay v. Secretary of State I.L.R. (1904) B. 580 the two rights are distinct. Even against a statute, equity may be relied upon in certain cases. The provision in the statute may be directory and not mandatory. Equity will relieve against its strict enforcement. Certain penalties may be held in terrorem with a view to the prompt obedience of the statutory rule. Equity will help to relieve the rigour of the law in such cases. Under a rule of law, time may not be of the essence of the contract. Here is room for the application of equity. Apart from these and similar instances, in my opinion, no principle of equity or estoppel should be allowed to prevail against a plain and mandatory provision of law. Where the law says, as in the present case, that title can be acquired only in a particular way, there is no room for the application of the doctrine of estoppel. The effect of holding otherwise would be to override legislation. Courts will then be creating a title which the legislature has distinctly negatived. Whatever may be the position in England before the Judicature Act, when equitable relief was given along with and often in opposition to common law remedies, I do not think the Courts in this country have power to nullify legislative provisions. The authorities in this country support this position. Chidambara Chettiar v. Vaidilinga Padayachi I.L.R. (1913) M. 519, Dhiraj Chandra Bose v. Srimati Hari Dasi. Debi 19 C.W.N. 507 28 M.L.J. 480, Jagadbandhu Saha v. Radha Krishna Pal I.L.R. (1909) C. 920. Mr. Krishnaswarni Aiyar referred to the dictum of Lord Kingsdown in the well known case of Ramsden v. Dyson (1866) L.R. 1 H.L. 129. The actual decision in that case was that as no expectation was held out to the tenant, the landlord was not estopped. Lord Kingsdown dissented from the conclusion of the other noble Lords. The argument before the House of Lords was directed to showing that by the conduct of the landlord an equity was created in favour of the tenant. No question of statutory command or prohibition had to be dealt with in that case. I do not think the pronouncement of Lord Kingsdown and of the other noble Lords are relevant to cases where the Courts are asked to act in direct contravention of the enacted law. Attorney-General of South Nigeria v. John Holt & Co. (1915) A.C. 599 is not really against this view. In that case, the respondents had acquired by a grant from the Crown certain lands of which the sea was the boundary. As a result of the erection of protective works by them a strip of land accreted to that already possessed by them. The Crown claimed this accretion. It was conceded that ordinarily the accretion would go to the Crown; but it was contended that having agreed to give access to the sea by the original grant, the Crown was estopped from laying claim to this piece of land so as to derogate from the rights already granted. This contention was upheld. At page 620 their Lordships say : 'In truth and substance what was done was to protect the land, to guard against invasion of the sea as a destructive force, and to conserve it for the use of the properties as an invaluable mercantile adjunct thereto. Further, so far as the Crown is concerned, it is recognised by law that it is the duty of the Crown to protect land from the incursions of the sea, and if, in the circumstances of the present case, a license had been granted and duly recorded, to the respondents to reclaim as was done, that license would have been in entire accord not only with the right of the subject but with the duty of the Crown. This principle is in accord with the law laid down in Attorney-General v. Tomline (1880) 14 Ch. D. 58, and principally with the opinions of Fry, J. 12 Ch. D. 214 at the trial and Cotton, L. J., in the Court of Appeal 14 Ch. D. 58.' As I understand this Judgment, the Judicial Committee were inclined to think that the grant of land implied a license to reclaim as well. The reference to Lyon v. Fishmongers Co. (1876) L.R. 1 A.C. 662, and other cases shows that their Lordships were prepared to presume from the nature of the grant a right in the respondents as grantees to erect walls in the foreshore in order that the benefits arising from the original grant may be properly enjoyed. One other observation may be made with reference to this case. No question of statutory title as in the present, appeal arose in it. Sarat Chunder Dey v. Gopal Ghunder Laha I.L.R. (1892) Cal. 296 was much relied upon by the respondent. In that case the title deed was in the name of the mother. The son had allowed her to deal with the property. The son's property passed under the Court sale to the plaintiff and the defendant claimed title under the mother by virtue of another Court sale on the mortgage created by her. It was found that the mother was only a benamidar for the son. Their Lordships of the Judicial Committee held that the son would have been estopped from questioning his mother's dealings as she had the ostensible title in her to the property, and that consequently persons claiming under the son were similarly estopped. I fail to see how this case affords any help to the respondent. The estoppel pleaded, related to the claim as real owner against a person having a prima facie statutory title. The other cases quoted do not require any detailed examination, lam of opinion that the plaintiff was not estopped from suing to recover the property. I further agree with the contention of the learned Vakil for the appellant that Section 115 which has been held to be exhaustive of the law, Asmatunnessa Khatun v. Harendra Lal Biswas I.L.R. (1908) C. 904, does not cover this case. However reprehensible the conduct of the plaintiff may be, there is no suggestion in the evidence that at the time, the defendant erected his house on this land, he was aware that he alone had title to the property and not the defendant. The plaintiff has no doubt taken advantage of the infirmity in the defendant's title; but it is not shown that he was aware of this infirmity when building operations commenced and intentionally led the defendants into the belief that he had a valid title. The truth seems to be that until about the time of the suit both parties believed that a good title had been secured by the document of 1908. In this view, the plaintiff cannot be said to be estopped from claiming his property. See Barrow's case (1880) 14 Ch. D. 432.
7. The only other point is whether the plaintiff should be allowed to recover the property without paying substantial compensation to the defendant. Under the Transfer of Property Act, there is no (question that the option should be given to the transferor to elect either to convey the property validly or to pay compensation. Mr. Srinivasa Aiyangar says that his client elects the latter alter native. He also contended that the Act in terms would not apply to the present case. Section 51 of the Transfer of Property Act speaks of the transferee of immovable property making improvements. Without expressing any opinion whether the term transferee would apply to persona who have obtained invalid transfers I think the principle of the section governs the present case. The plaintiff, in my opinion, must pay substantial damage before he is given a decree for possession. As the question has not been dealt with, by the Court of First Instance, the Subordinate Judge should be allowed to return a finding on the 4th Issue, in the view I have, taken of the case. The proper course will no doubt be to appoint an expert Commissioner to determine the extent of the damage that is likely to accrue and to give an estimate of the compensation to be paid.