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T.N. Habib Khan Vs. Arogya Mary Shanthi Lucien - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Case NumberC.R.P. No. 870 of 1981
Judge
Reported inAIR1982Mad156
ActsTamil Nadu Buildings (Lease and Rent Control) Act, 1960 - Sections 23(1); Stamp Act, 1899 - Sections 35 and 36; Registration Act, 1908 - Sections 2 (7) and 17; Transfer of Property Act, 1882 - Sections 105
AppellantT.N. Habib Khan
RespondentArogya Mary Shanthi Lucien
Appellant AdvocateAdvocate General for S.N. Balararnanand and V.R. Gopalan, Advs.
Respondent AdvocateV.R. Biksheswaran and ;T. Seshadri, Advs.
Cases ReferredIn Trivenibai v. Lilabai
Excerpt:
tenancy - admissibility of exhibits - section 23 of tamil nadu buildings (lease and rent control) act, 1960, sections 35 and 36 of stamp act, 1899, sections 2 and 17 of registration act, 1908 and section 105 of transfer of property act, 1882 - revision petition raising question of admissibility of certain instruments - petitioner contended that instrument confer present demise so must be registered for admissibility - whether instrument in exhibit imparts present and immediate demise - paramount intention of parties not to create immediate and present demise - instrument need no registration under provisions of section 17 (d) - held, instrument admissible and not chargeable with any stamp duty. - - the above case was instituted by the land lady, daughter of one henry issidore, who is.....order1. the petitioner herein was the respondent-tenant in h. r. c. o. 1584of 1980 on the file of the 14th judge,court of small causes, madras. the above case was instituted by the land lady, daughter of one henry issidore, who is respondent in this revision, under section 10(2)(v) of the tamil nadu buildings (lease and rent control) act (act 18 of 1960) (hereinafter to be re5 ferred to as the act) on the ground of 11 causing nuisance to the landlady as well 9 as the lodgers f the adjacent lodge. the 10 landlady has also filed two other cases in hrc nos. 1585 and 1586 of 980 12 against the same tenant for eviction on the ground of additional accommodation and on the round of willful default respectively. besides these three cases, there' are 9 other eviction petitions against the same.....
Judgment:
ORDER

1. The petitioner herein was the respondent-tenant in H. R. C. o. 1584of 1980 on the file of the 14th Judge,Court of Small Causes, Madras. The above case was instituted by the land lady, daughter of one Henry Issidore, who is respondent in this revision, under Section 10(2)(v) of the Tamil Nadu Buildings (Lease and Rent Control) Act (Act 18 of 1960) (hereinafter to be re5 ferred to as the Act) on the ground of 11 causing nuisance to the landlady as well 9 as the lodgers f the adjacent lodge. The 10 landlady has also filed two other cases in HRC Nos. 1585 and 1586 of 980 12 against the same tenant for eviction on the ground of additional accommodation and on the round of willful default respectively. Besides these three cases, there' are 9 other eviction petitions against the same tenant by the brother Mad and mother of the respondent herein. All. the eviction petitions are being tried together and common evidence is being led in HRC No. 1,584 of 1980. In the trial of these cases, the father of the respondent here4n, viz, Henry Issidore is being examined as P.W. I whose evidence is partly recorded. During the examination o! PW. 1, three unregistered documents were sought to be filed on behalf of the eviction petitioners in all the cases. On behalf of the petitioner herein, who is the respondent-tenant in all the 12 cases, objection was raised as to the admissibility of these documents, both under the provisions of the Indian Registration Act and under the Indian Stamp Act. It is seen from the records that the learned Rent Controller stopped further examination of P. W. 1, at that stage and adjourned the proceedings to the next day, i. e., 2971-1981, on which date one Tajudin Ahmed working as Manager in Hotel Impala and Impala Sweets belonging to the tenant filed a petition in M. P. No. 59 of 1981, supported by an affidavit submitting that the three unregistered documents sought to be filed cannot be admitted in evidence and requesting the Rent Controller to decide as a preliminary issue, the admissibilitv of these three unregistered documents relied on by the landlords. P. W. 1 who is the father of the respondent herein filed a counter affidavit on behalf of the landlady countering the objections raised by the tenant and setting out various reasons for admitting these documents in evidence. Thereafter the tenant himself filed a reply affidavit repelling the contentions raised in the counter affidavit filed by Mr. Henry Is sidore and reiterating the stand taken by the tenant that the three unregistered documents cannot at all be admitted in evidence. The learned Rent Controller, on perusing the affidavits and documents and hearing the arguments of the, counsel representing both the parties, has passed his order dismissing the petition in M. P. No. 59 of 1981, holding that the three documents sought to be filed do not create a present demise and, therefore, it is not necessary that these documents should be registered under Section 17(1)(d) of the Registration Act, and alternatively holding that at even if we hold that the documents cannot be looked into for the reason that they are not registered, there is nothing which prevents from admitting in evidence for a collateral transaction Dissatisfied with the order of the Rent Controller, the tenant referred an appeal in HRA No. 206 of 1981, questioning the validity and legality of the order passed by he Rent Controller. It seems from the order of the appellate authority that a contention was raise6i on he strength of a decision of the Supreme Court reported in Central Bank of India v. Gokal Chand, : [1967]1SCR310 , that the order passed by the Rent Controller is only an interlocutory order which is merely procedural and which does, not affect the rights and liabilities of the parties, and therefore, no appeal would lie against such an order and the any course left open to the parties is to set forth the error or defect, if any, in such an order in the grounds of objections in his appeal in the final order in the main proceedings. The appellate authority, while examining the contention raised on behalf of the tenant, that all the three documents do create a present demise and as such the contrary conclusion arrived at by the Rent Controller is erroneous, has answered the contention as follows

'A scrutiny of this impugned document would show that there was no dispute with regard to the rate of rent, commencement of the tenancy, description of the property and period of tenancy, which are all necessary to satisfy to hold that the document is a lease agreement. If the documents are approached with that object it would appear that they are inadmissible in evidence for want of registration.'

2. After having answered the contention of the tenant as pointed out above the appellate authority considering the proviso to Section 49 of the Registration Act, and referring to two decisions of this court, viz C. S. Kumarasami Gounder v. Aravaairi Gounder. : AIR1974Mad239 and Rangaiya Bagavathar v. Kesava Bagavathar, : AIR1972Mad324 , held that even if these documents could not be admitted for want of registration, those documents could be admitted in evidence for collateral purposes of proving the nature and character of possession, Pursuant to the above finding, the appeal was dismissed and the order of the Rent Controller Hence this revision.

3. The learned Advocate-General appearing on behalf of the revision petitioner-tenant after taking me through the three documents sought to be filed, submitted that these three documents do create a present demise and therefore they have to be compulsorily stamped and registered under the provisions of the Stamp Act and the Regstn. Act. He would further add that when the landlords themselves do not put forth a specific case that these documents are necessary for any collateral purpose, t appellate authority is not justified in rendering a decision that these documents could be admitted for the collateral purpose of proving the nature and character of the possession. Countering the above submission, an argument was advanced by Mr. Biksheswaran, learned counsel appearing for the respondent, that no appeal or revision would lie as against an order of this nature which is purely procedural, in view of the decision rendered by the Supreme Court in Central Bank of India V. Gokai Chand, : [1967]1SCR310 , and this court in Chinnaraju Naidu v. Bavani Bai, C. R. P. No. 646 of 1981* (The second cited judgment was rendered by this court following the first cited Supreme Court decision in Central Bank's case). The learned Advocate General would urge that the order passed by the Rent Controller is not an interlocutory order, but a final order affecting the rights and liabilities of parties and, therefore, an appeal and a revision would lie. Mr. Biksheswaran, though would not agree with the finding of the lower appellate court as regards the creation of a present demise in the documents, would, however, attempt to sustain the dismissal of the appeal inter alia contending that all the three documents do not create any present demise and as such these documents need not be stamped or registered and, therefore, no valid objection could be raised for the admission of these documents. He would further urge that in view of the judgment of the Supreme Court in Central Bank's case and that of this court in Chinnaraju Naidu v. Bavani Bai, C. R. P. No. 646 of 1.981, the appeal itself ought not to have been entertained and the present revision is unsustainable.

4. Before adverting to the arguments advanced by the learned Advocate General and the learned counsel for the respondent I would like to point out that both the authorities below have not rendered any specific finding as regards the insufficiency of the stamps in the documents though they have dealt with the question of the necessity of the registration of these documents. Whilst the Rent Controller has concluded that these documents do not create a present demise, the appellate authority without going deep into the matter has summarily disposed of the question in a very light vein stating 'if the documents re approached with that object, it would appear that they are inadmissible in evidence for want of registration'. However, both the authorities have found that these documents at any rate could be admitted in evidence for collateral purposes.

5. Now I shall formulate three questions for my consideration, the answers to which, I believe, would cover the contentions raised by both parties-

1. Whether the order of the Rent Controller is only an interlocutory order which is procedural, without affecting the rights and liabilities of the parties, and as such no appeal or revision would lie?

2. Even assuming that the order of the Rent Controller is a final one, deciding the rights and liabilities of the parties, whether those three documents sought to be admitted in evidence do create a present demise, and if so, whether they are inadmissible in evidence for want of proper stamping and registration?

3. Even if the documents are not properly stamped and registered, could these documents be admitted in evidence for any collateral purposes in this case?

Now I shall take up the questions seriatim: A question arose before the Supreme Court in Central Bank of India v. Gokal Chand : [1967]1SCR310 , similar to the one raised in this case as to the maintainability of an appeal against an order -passed by a Rent Controller in an interlocutory application. In that case the landlord made an application to the Rent Controller for eviction of the ten ant- appellant on the ground that he bona fide required the building for his occupation. The tenant filed an application alleging that the accommodation in Premises No. 17 Alipur Road where the landlord was residing, consisted of more than three rooms and consequent1v the landlord did not bona fide require the Premises and prayed for the issue of a commission to inspect the above said premises and prepare a Plan .The Rent Controller rejected the plea. As against this order of rejection, the tenant filed an appeal to the Tribunal, which held that no appeal lay from the above said order of the Controller u/s. 38(1) of the Delhi Rent Control Act of 1958, and on this finding dismissed the appeal. The High Court also agreed with the decision of the Tribunal. The tenant preferred an appeal to the Supreme Court by special leave. A question arose in that appeal whether an appeal lay to the Tribunal u/s. 38(1) of the Act from the order of the Controller, rejecting the application of the tenant seeking the issuance of a commission. Their Lordships of the Supreme Court after referring to S. 38(1) of the Delhi Rent Control Act of 1958, observed as follows (at D. 800 of AIR) -

'In the context of S. 38(1), the words every order of the Controller made under this Act', though very wide, do not include interlocutory orders, which are merely procedural and do not affect the rights or liabilities of the parties. In a pending proceeding. the Controller may pass many interlocutory orders under Ss. 36 and 37, such as orders regarding the summoning of witnesses, discovery, production and inspection of documents, issue of a commission for examinations of witnesses, inspection of premises, fixing a date of hearing and the admissibility of a document or the relevancy of a question. All these interlocutory orders are steps taken towards the final adjudication and for assisting the parties in the prosecution of their case in the pending proceeding; they regulate the procedure only and do not affect any right or liability of the parties. The Legislature could not have intended 'that the parties would be harassed with endless expenses and delay by appeals from such procedural orders. It is open to any Darty to set forth the error, defect or irregularity, if any, in such an order as a ground of objection in his appeal from the final order in the main proceeding. Subject to the aforesaid limitation, an appeal lies to the Rent Control Tribunal from every order passed by the Controller under the Act. Even an interlocutory order passed under S. 37(2) is an order passed under the Act and is subject to appeal under S. 38(1) provided it affects some right or liability of any party. Thus, an order of the Rent Controller refusing to set aside an ex parte order is subject to appeal to the Rent Control Tribunal.'

After having made the above observations, the Supreme Court held that the impugned order therein was merely a procedural one not affecting any right or liability of the appellant therein and dismissed the appeal, however, affording an opportunity to the partly aggrieved viz. the appellant, to canvass the error, defect or irregularity, if any, in the order in an appeal from the final order passed in the Proceedings for eviction. The principle laid down by the Supreme Court in the above decision was reiterated and reaffirmed by the Supreme Court in Bant Singh Gill v. Shanti Devi, : [1967]3SCR59 . Following the above decision of the Supreme Court, and the judicial Pronouncements made by this court, in particular by a Division Bench of this court, consisting of Rajamannar C. J. and Panchapakesa layer, J. in Komaraswami Goundan in re, : AIR1951Mad766 and Santhanam Iayer v. Sornasundara Vanniyar, ILR (1958) Mad 827, and certain other decisions, I have held in Chinnaraju Naidu v. Bhavani Bai, C. R P. No. 646 of 1981 (order dated 24-3-1981)* that all interlocutory orders passed during the Proceeding under the TNB (L & R C) Act 1960, cannot be said to be orders coming within the meaning of S. 23(1)(b) of the Act, but only the orders which affect the rights and liabilities of the Parties, in the sense that they have become final orders though passed in an interlocutory application, are appleacable. The learned Advocate General did not address any argument that an appeal would lie against an order passed in each and every interlocutory application. But, what he would contend is that the order passed by the Rent Controller in the present case is a final order affecting the rights and liabilities of he petitioner here in and, therefore, an appeal and then a revision would well lie in this case. It is submitted on behalf of the Petitioner that all the three documents, each typed on a stamp paper of the value of R-. 2-50 but not registered, are directly hit by~ the provisions of the Stamp Act as well as the Regstn . Act. According to him, if in spite of objection raised by the party likely to be affected by the admission of a document, on the ground that it is not stamped or is insufficient1v stamped the document is admitted and if the said admission is not further challenged and got decided before the main proceeding reaches its finality the admissibility of the document cannot be questioned at a later stage, because the admission of the document, when once made, becomes final affecting the rights and liabilities of the parties and the net result would be that the aggrieved partly would be without any legal remedy. Therefore, according to the learned Advocate General, before the main -proceedings are disposed of, the aggrieved partly has got a vested right to challenge the correctness of the order of the trial court admitting the instrument, by wav of an appeal before the appellate court and then, if necessary, by wav of a revision. In support of his contention, that the admission of an instrument by a trial court, if not challenged, becomes final, he cited a plethora of decisions, of which I would like to refer to some.

6. First, he cited Venkatrama Aiyar v. Chella Pillai. AIR 1921 Mad 413. In that case, a Division Bench of this court has observed that where, contrary to S. 35 of the Stamp Act, the trial court erroneously treats an unstamped promissory note as an agreement and admits it in evidence, after collecting duty and penalty, it is not open to the appellate court to reject the document on the ground of its not having been properly stamped.

7. The next decision is Nagappa Chetti v. V. A. A. R. Firm, AIR 1925 Mad 1215.In case the learned judge who tried the case overruled the plea that an instrument filed in that case required stamp and admitted in evidence. When that admission was challenged before the Division Bench of this court the tearned Judges observed.-

'We think that we cannot in appeal go into the question whether it was rightly or 'wrongly admitted. Section ofthe Stamp Act is clear. It says that where an instrument has been admitted in evidence such admission shall not, except as Provided by S. 61, be. called in question at any stage of the same suit or proceeding on the ground that the instrument was not duly stamped We do not think that it is open in appeal, which is merelv a con tinuation of the same proceeding, to question that document.'

8. It was held in Venkanna v. Parasuram, AIR 1929 Mad 522, that a document, although endorsed according to 0. 13, R. 4 of the Civil Procedure Code, cannot be deemed to be admitted in evidence, if that endorsement is made without the Judge having applied his mind to its admissibility, and so can be rejected in spite of such endorsement. Following the decisions in Venkatrama Aiyar's case, AIR 1921 Mad 413, and Nagappa Chettiar's case, AIR 1925 Mad 1215, a single judge of this court in Venkateswara v. Ramanatha : AIR1929Mad622 , where the plaintiff sued on a promissory note and the defendant raised the plea that the said promissory note was not admissible in evidence on the ground that it was not validly stamped, but the court of first instance marked it as an exhibit unconditionally, held that the appellate court had no jurisdiction to agitate the question of the admissibility of the instrument.

9. Reference was also made to Venkata Reddy v. Vitta Hussain AIR 1934 Mad 383, which was followed in S. R. V. Rice Mill v. Takurdas Toppandas, : AIR1960AP155 . See also N. Basaviah Naidu v. T. Venkateswarlu, AIR 1957 Andh Pra 1022, Manavala Naicker v. Gopala Krishnaiah Chetti, : AIR1969AP417 ; L. Sambasiva Rao v. T. Balakotiah, : AIR1973AP342 (FB), Brij Kishore Rai v. Lakhan Tewari, : AIR1978All314 and Bhagavandas v. Chhaganlal, AIR 1944 Born 235 (1). Much reliance was Placed on some of the decisions of the Supreme Court on this point which I shall Dresentlv refer to. The Supreme Court in Javerchand v. Pukhrai Surana, : [1962]2SCR333 , examined the scope and effect of Ss. 35 and 36 of the Stamp Act and observed as follows (at pp. 1656, 1657)-

'That section (S. 36) is categorical in its terms that when a document has once been admitted in evidence, such admission cannot be called in question at any stage of the suit or the proceeding on the ground that the instrument had not been duly stamped. The only exception recognised - by the section is the class of cases. Contemplated by. S. 36 does not admit of other exceptions. Where a question as to the admissibility of a document is raised on the ground that it has not been stamped or has not been properly stamped, it has to be decided then and there when the document is tendered in evidence. Once the court, rightly or wrongly, decides to admit the document in evidence, SO far as the parties are concerned, the matter is closed. S. 35 is in the nature of a penal provision and has far-reaching effects. Parties to a litigation, where such a controversy is raised, have to be circumspect and the Party challenging the admissibility of the document has to be alert to see that the document is not admitted in evidence by the court . Once a document has been marked as an exhibit in the case and the trial has proceeded all along, on the footing that the document was an exhibit in the case and has been used by the parties in eamination and cross-examination of their witnesses, S. 36 of the Stamp Act comes into operation. Once a document has been admitted in evidence, as aforesaid, it is not open either to the trial court itself or to a court of appeal or revision, to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same court or a court of superior jurisdiction'.

10. In yet another case, viz., Kashinatha v. Narsingsa, : [1961]3SCR792 , the Supreme Court pointed out that when once a document is admitted in evidence by the trial court, no question of admissibility of that document can be raised at a later stage of the suit or in appeal. It would be appropriate to mention here that Varadarajan J. of this Court (as he then was) in Madiammal v. Chandrakantha, : AIR1977Mad209 , following the above decision of the Supreme Court, and other decisions, has held that it was not open to the respondent therein (aggrieved party) to challenge in the second appellate stage the admission of the document marked as Ex. A-1 therein, even though the said document was inadmissible in evidence for want of stamps.

11. A similar question arose in Ram Rattan v. Bairana Lal, : [1978]3SCR963 . In that case, the Supreme Court held (at 13. 1395)

'When the document was tendered in evidence by the plaintiff while in witness box, and objection having been raised by the defendants that the document-was inadmissible in evidence as it was not duly stamped or for want of registration, it was obligatory upon the learned trial Judge to apply his mind to the objection raised and to decide the objection in accordance with law. Tendency sometimes is to postpone the decision to avoid interruption in the process of recording evidence and, therefore, a very convenient device is resorted to, of marking the document in evidence subject to objection. This, however, could not mean that the objection as to admissibility on the around that the instrument is not duly stamped 'is judicially decided; it is merely postponed. In such a situation at a later stage before the suit is finally disposed of, it would nonetheless be obligatory upon the Court, to decide the objection. If after applying mind to the rival contentions, the trial court admits a document in evidence, Section 36 of the Stamp Act would come into play and such admission cannot be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped.

Relying on the dicta laid down in the above-cited decisions, particularly the decisions of the Supreme Court, the learned Advocate General strenuously and vehemently contends that if a document, the admission of which is under challenge on the ground that it is not validly stamped or registered, is admitted, the said admission would become final affecting the rights and liabilities of the aggrieved party and therefore the aggrieved party has got a right to question the said order admitting the document passed by the trial Court, by filing an appeal, and if unsuccessful in the said appeal, by preferring a revision as against the same. In this connection the learned Advocate General drew the attention of this Court to Raghunath v. Seetharama, AIR 1972 Mys 344, in which a, question arose whether a revision should be preferred without delay as against an order admitting a document overruling the objection raised under the provisions of the Stamp Act, or whether it could be kept for adjudication at a later stage. The Mysore High Court after having referred to the decision in Javerchand's, case : [1962]2SCR333 , held that the order deciding a question arising under the Stamp Act has to be challenged without delay in revision and cannot be kept for adjudication at a later stage and that if such steps are not taken, it cannot be taken at a later stage.

12. Then, the learned Advocate General would submit that in view of the position of law settled as above, the judgment of the appellate authority in H. R. A. 206 of 1981 filed against the order in M. P. 59 of 1981, rejecting the contention of the learned counsel appearing for the tenant (appellant herein) that the decision in Central Bank of India v. Gokalchand, : [1967]1SCR310 does not bar appeals being directed against the order admitting an instrument in an interlocutory application and holding-

'the remedy open to the party, whose rights and liabilities are said to be affected in view of the contravention of the provisions of the Stamp Act and Registration Act are only after the passing of the final order by the Rent Controller and not as and when the order is passed since the passing of such an order has been described by the Supreme Court as a procedural one.' and consequent1v dismissing the appeal, is erroneous. According to him, the observation made by the Supreme Court in the Central Bank's case cannot be applicable to the facts of the Present case, for the following reasons-

(1)The admission of the document overruling the objection of a party that the document is not admissible for want of stamp and registration, should be construed as a final order affecting the rights and liabilities of the party aggrieved. The principle enunciated in the Central Bank's case is only with reference to the interlocutory orders which do not affect the rights and liabilities of the parties.

(2) The lower appellate court has misdirected itself in drawing its conclusion based on a Passing observation (obiter) made by the Supreme Court by wav of illustration stating that the admissibility of a document also would come within the purview of interlocutory orders passed on applications filed under Sections 36 and 37 of the Delhi Rent Control Act of great weight, was not one passed in deciding the issue before it, but was only casual, made while enumerating illustrations for interlocutory orders in general, without actually deciding the position of law relating to the admission of document like the one in the -present case. He would seek to draw inspiration for the second submission from an observation made by the Supreme Court in A. D. M., Jabalpur V. S. Shukla, : 1976CriLJ945 , which reiterates the view expressed by the Supreme Court in H. H. Madhav Rao Jivaii Rao v. Union of India, : [1971]3SCR9 . The observation reads thus:

'An obiter cannot take the place of the ratio. Judges are not oracles. These observations do not therefore have any binding effect and they cannot be regarded as conclusive on the point. Moreover, it must be remembered that when we are considering the observations of a high judicial authority like this Court, the greatest Possible care must be taken to relate the observations of a Judge to the precise issues before him and to confine such observations, even though expressed in broad terms, in the general compass of the question before him, unless he makes it clear that he intended his remarks to have a wider ambit. It is not Possible for Judges always to express their judgments so as to exclude entirely the risk that in some subsequent case their language may be misapplied and any attempt at such perfection of expression can only lead to the Opposite result of uncertainty and even obscurity as regards the case on hand.'

3. As pointed out by the Supreme Court in Mattulal v. Radhe Lal, : [1975]1SCR127 , the decision of the Supreme Court rendered in Javerchand's case, : [1962]2SCR333 by a Bench consisting of four learned Judges must be preferred to the one rendered by a smaller Bench consisting of three learned Judges in Central Bank's case, : [1967]1SCR310 .

4. Whilst Javerchand's case is a direct authority on the question of admissibility of a document subject to a challenge under the provisions of the Stamp Act, the decision in Central hank's case, is only an obiter.

13. On the above reasonings it was the appellate authority that the interlocutorv order passed bv the Rent Controller in M. P. 59 of l9al, is only a procedural one and as such no appeal would lie and the aggrieved partv can canvass the correctness of the said order only if he happens to agitate the final order bv wav of an appeal,.should be vacated. I see great force in the above submissions made bv the learned Advocate General. Accordingly, in view of the authoritative enunciation of law laid down in the various decisions cited above, I hold that the impugned order passed by the Rent Controller on the I

question of admissibility of the documents in question is an appealable one, since it affects the rights and liabilities of the aggrieved party.

14. Then, coming to the next question, this court has to determine whether the three documents sought to be admitted in evidence do create a present demise and thereby necessarily require registration.

15. The three documents sought to be admitted are described as deeds of 'agreement to lease'. They are dated 13-3-1969, 16-2-1970 and 2-6-1972, respectively. They are all unregistered documents. Under all these documents, advance amounts of Rs. 1300/-, Rs. 1200/and Rs. 15,0001- respectively have been paid and received as security deposits. In all the documents, it has been recited that the lessor (landlord) shall deliver possession of the schedule-mentioned properties on or before the dates mentioned in each of them, viz, 4-5-1969 under the first document dy. 15-5-1969, 31-3-1970 under the document dated 16_2-1970 and 31-8-1972 under the document 2-6-1972. It is also further recited in all the three documents that a regular registered lease agreement shall be executed by the lessee within three months from the date of delivery of possession at the cost of the lessee.

16. Whilst the tenant would submit that all the three documents contain all the terms and conditions of a regular lease, creating a -present demise, the submission of the landlady is that no present demise is created under these documents and as such they do not require registration. I shall discuss about these rival contentions relating to the nature of the demise created by these three instruments. after referring to the finding of the Rent Controller and that of the appellate authority.

17. The Rent Controller, for the discussion made in his judgment, has given the following finding as to the nature of the demise created by those instruments-

'A perusal of these documents shows that they are agreements to lease and it is clear that no Present demise is created under the said instruments. They state specifically that delivery of possession shall take place in future and a regular lease deed should be executed within three months from the date of the delivery of possession by the lesser. it is also clearly stated that in the event of the lessee failing to take delivery of the possession on or before a particular date, the Jesses shall forfeit security amount. Therefore, these documents are only agreements to lease.... It is clear from the documents that no present demise was created. Under the said documents the demise was intended to be created only long subsequent to the execution of these documents. Hence, I feel that documents mentioned above do not come within the purview of Sec. 17

(i) of the Registration Act Therefore, it is clear from the above, that the documents in question should be looked into to 'ascertain the intention of the parties and also its terms and conditions. The documents referred to here in create interest in future and not in present with a contingency that he lease may or may not take Place. Such being the case, they are the documents of agreements, to lease and not leases proper or documents which create lease at present. Hence, from the decisions referred to e which is in point, I have no hesitation in rejecting the contention of the petitioner.'

The learned Rent Controller, for arriving at the above conclusion, has relied upon the decision in Hemantakumari v. Midnapur Zamindari Co., AIR 1919 PC 79, in which the Privy Council has held that an agreement for lease must relate to some document that creates a Present and immediate interest in the land and that an agreement that upon the happening of a contingent event at a date which is indeterminate and might be far distant a lease would be granted, does not satisfy the meaning of an agreement for a lease'. .

18. He has also relied upon Rangaiya Bhagavahar v. Kesava Bhagavathar, : AIR1972Mad324 .

19. In the memorandum of appeal filed before the appellate authority, challenging the order of the Rent Controller, the appellant-tenant had taken a series of contentions to substantiate his case that the three documents do really create a present demise and that the Rent Controller has misinterpreted the documents and rendered his findings, without going through certain important judicial pronouncements which are referred to in the memorandum of grounds.

20. The appellate authority, in paragraph 11 of his judgment in H. R. A. 206 of 1981, has referred to the decision of the Privy Council in Hemantakumari's case AIR 1919 PC 79 , and has come to the following conclusion without making much discussion on this point, The conclusion reads thus-

'A scrutiny of these impugned documents would show that there was no dispute with regard to the rate of rent; commencement of the agency, description of the property and period of tenancy, which are all necessary to satisfy to hold the document as lease agreement. If the documents are approached with that object, it would appear that they are inadmissible for want of registration'.

21. Even though the appellate authority has dismissed the appeal for various reasons recorded in the judgment2 it has set aside the finding of the trial court that no registration is necessary as the documents do not create a present demise, and has held that they are in-admissible in evidence for want of registration as mentioned above. Indeed, the appellate authority had not even referred to some of the leading decisions cited by the appellant-tenant in the memorandum of appeal, but has suddenly jumped to the above conclusion wit -out any discussion. The learned Advocate General would, however, attempt to sustain this finding. Mr. Biksheswaran, learned counsel appearing for the respondent-landlord would contend that this finding of the lower appellate court is erroneous and as such unsustainable and therefore it has become necessary for this Court in this revision to examine whether the above conclusion of the lower appellate, court as regards the nature of the demise created by, these three document, can be legaIly swstained.

22. In the reply affidavit filed by the tenant in M.P. No. 59 of 1981,- certain special features appearing in the documents are enumerated for the purpose of showing that these documents are agreements creating present and immediate interest in the properties mentioned in the schedule to each of the documents. They are-

(a)Even though the three documents have been termed as agreements to lease, yet they contain all the terms and conditions which are normally found in any lease agreement.

(b) In the document dated 15-3-1969, an advance sum of Rs. 1300/- was paid at the time of the execution of the said document and similarly in the other two documents.

(c)In all the three documents, specific reference has been made that the building in question which was to be demised had already come into existence.

(d)In all the documents, the description of the property demised had been stated in the schedule and also the rate of rent, the user of the property, etc.

(e) It is an admitted case that all the three documents were acted upon and possession handed over to me in furtherance to those three documents on the due and respective specified dates. Under the first document dated 15-3-1969, possession was specified to be given on 4-51969, in the second document dated 16-21970 possession was specified to be given on 31-3-1970 and under the third document dated 2-6-1972 possession was specified to be given on 31-8-1972.

(f) In all the three documents, it has been uniformly stated that a regular registered lease would be prepared, executed and registered but the same was never done. The same was not contemplated till a lawyer's notice was issued on 31-10-1979, after a lapse of ten years which would clearly indicate that the parties were never serious or anxious to have a regular registered document of lease. If the landlord was very particular about the regular registered lease deed, he would have insisted on the same after the first document and at any rate before the execution of the second, third and fourth documents.

(g) There are no uncertainties or contingencies mentioned in any of the three documents and the terms and conditions am clear and specific.

(h) A thorough reading of all the three documents would indicate that they did not belong to the second category of agreement to lease and there was no doubt or uncertainty envisaged. It was never the intention of the Parties that only on the execution of a regular registered lease deed, possession should be handed over. For all practical purposes, the documents referred to above were treated as regular lease.'

In addition to the above special feature enumerated in the replication, t1je learned Advocate General would add that the parties were fully conscious and alive to all the various terms and conditions of the three documents and treated the same as lease deeds in which there are absolutely no uncertainties or contingencies involved and which contain in clear and specific terms, particulars like the rate of rent, the period of lease, payment of taxes, purpose of letting o ut and the Portions let out etc, and as such those documents do create present demise and require registration and. also require to be duly stamped.

23. Section 17 of the Registration Act enumerates: the documents which require compulsory registration. Clause (d) of Section 17(1) states that leases of immovable property from year to year or form term exceeding one year or~ re serving an nearly rent shall be registered. Section 49(c) of the Registration Act stated that no document required by Section 17 or by any provisions of the Transfer of property Act to be registered shall be received as evidence of any transaction affecting such property or conferring such property unless it has been registered. Of course, this is subject to the Proviso under which a document could be received in evidence for any collateral transaction. Section 2(7) of the Registration Act defines the term 'lease' as including an agreement to lease. Section 35 of the Stamp Act states that lease includes an under-lease or sub-lease and any agreement to let or sublet. Section 35 of the tamp Act states that no instrument chargeable with duty shall be admitted in evidence for any purpose by person having by law or consent of parties, authority to receive evidence,, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped. The section is subject to a proviso. Section 36 states that where an instrument has been admitted in evidence such admission shall not, except as provided in Section 61, be called in question at any stage of the same suit or proceeding, on ground that the instrument has not been duty stamped.

24. In the present case, the deeds which are characterised as agreements to lease immovable Property, are for a period of five years, five years and ten years respectively. Therefore, we have to see whether these agreements to lease create a present and immediate interest requiring compulsory registration. A lease of immoveable property is defined in Section 105 of the T. P. Act; as a transfer Of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service, or any other thing of value, to be rendered periodically or on specified occasions, to the transferor by the transferee, who accepts the transfer on such terms. The test to determine whether an a agreement falls within the definition of a lease is whether it has the effect of operating as -an immediate demise of the property.

25. The authoritative judicial pronouncements have brought out. two categories of agreements to lease, viz, (a) agreement which creates a present and immediate interest and, (b) agreement which creates a future interest, which is contingent and indeterminate. Documents falling under category (b) do not attract the Provisions of the Registration Act and the Stamp Act and only the agreements which fall under category (a), viz, documents creating present and immediate interest require registration and to be duly stamped.

26. The decision in Hemantakumari's case, AIR 1919 PC 79 is the leading decision on the subject. The facts of that case are that the appellant therein filed 2 suits-Suit No. 72 of 1895, against the Government and Suit No. 73 of 1895, against one Robert Watson and Co., for possession of certain land. The latter suit was compromised to the effect that the ownership of the appellant was recognised, but Robert Watson and Co., were to retain Possession on certain terms. On success of the former suitagainst the Government, the appellant agreed to grant a jote settlement of the land to Robert Watson and Co. The compromise was signed and decree followed. on the appellant succeeding against the Government in the former suit, she refused to honour the compromise decree and hence the proceedings were instituted to enforce specific performance of the said agreement, by the successor-in- interest of Robert Watson and Co. The defence was that the compromise agreement was not registered. Their Lordships of the Privy Council held as follows:

'An 'agreement for a lease' which a lease is by the statute declared to include must in their Lordships' opinion, be a document which effects an actual demise 'and operates as a lease. They think that Jenkins C. J. in the case of Panchanan Basu v. Chandi Charan, ILR (1910) Cal 808 : 6 Ind Cas 443 : 14 CWN 874, correctly stated the interpretation of S. 17 in this respect. The present agreement is an agreement that, upon the happening of a contingent event at a date which was indeterminate and, having regard to the slow progress of India litigation, might be far distant, a lease would be granted. Until the happening of that event it was impossible to determine whether there would be any lease or not. Such an agreement does not, in their Lordships' opinion, satisfy the meaning of the phrase agreement for a lease', which in the context where it occurs and in the statute in which it is found must in their opinion relate to some document that creates a present and immediate interest in the land.'

27. Following the above decision the Calcutta High Court in Ramjoo Mahomed v. Haridas Mullick : AIR1925Cal1087 has observed -

'It becomes necessary for the Court therefore to determine the meaning of the term 'Present demise'. It is wellsettled that whether an agreement amounts to a 13resent demise or not depends, upon the intention of the parties, which has to be gathered from the language in which the agreement is couched.'

In Maneklal Manital in re, : AIR1928Bom553 , the Bombay High Court has pointed out that an agreement to lease must amount to an actual demise and not an agreement that in certain contingencies a lease wilt be granted. See Sultanali v. Tyeb : AIR1930Bom210 . Reliance was placed by the tenant, also on the decision of the Division Bench of this Court in Mopurappa v. Ramaswami : AIR1934Mad418 , wherein the Bench held that the fact that the tenancy is to commence from a particular date does not prevent the agreement being one of the present demise. For the same proposition, the decisions in Bechardas v, Ahmedabad Municipality, AIR 1941 Bom 346 and Balram v. Mahadeo and Manjit Singh v. J. P. Jarrawalla AIR 1971 J and K 86, can be referred.

28. The Supreme Court in Triveni Bai v. Smt. Lilabai, : AIR1959SC620 , on which much reliance has been placed by the tenant, while dealing with the question when an agreement to lease operates as present demise, has observed thus (at p. 625):

'The heading of the document, though relevant, would not determine its character. It is true that, an agreement would operate as a present demise although its terms may commence at a future date. Similarly it may amount to a present demise even though parties may contemplate to execute a more formal document in future. In considering the effect of the document we must enquire whether it contains unqualified and unconditional words of present demise and includes the essential terms of a lease. Generally if rent is made Payable under an agreement from the date of its execution or other specified date, it may be said to create a present demise. Another relevant test is the intention to deliver possession. If possession is given under an agreement and other terms of tenancy have ):,been set out, then the agreement can be, taken to be an agreement to lease. As in the construction of other documents, so in the construction of an agreement to lease, regard must be had to all the relevant and material terms; and an attempt must be made to reconcile the relevant terms if possible and not to treat any of them as idle surplusage.'

29. A Full Bench of the Andhra Pradesh High Court in Sanyasi Raju v. Kamappadu, : AIR1960AP83 , has observed as follows (at P.87)-

'If the conditions of a contract to lease are fully ascertained, and if it is intended that the right to possession should vest in the lessee either immediately if the term is to commence at once or in future, if it is to come into operation subsequently, the instrument has to be regarded as a lease. Such a lease takes effect from the date filed for the commencement of the lease without the necessity of actual entry. If, on the other hand, it is only an agreement binding one of the parties to the agreement to lease and the other to accept it, it is only ans executory contract since the legal relationship of landlord and tenant would not be created by and under the instrument. Thus, the test is whether the agreement itself would confer a legal right or whether the execution of another instrument which gave a legal right was in the contemplation of the parties. It should be construed to be a lease if the present demise is to be inferred from the language employed. The fact that it contains a stipulation for the execution of a formal document subsequently would not make any difference if the covenants mentioned therein are to become binding at once. If, on the other hand, the terms are not fully ascertained and some at least of the essential conditions are to be settled at a later stage even if the words used indicate a present demise, it would not be, a lease as defined in S. 2(7). It is the dominant intention of the parties that should be gathered from the language in which the document is couched that should be the criterion in deciding whether a particular instrument is an agreement to lease Or merely an agreement to grant a lease in future creating a right in a party to obtain a document under certain circumstances or on the happening of a certain contingency.'

30. Now, let me 9crutinise the three documents in question and see from the language deployed therein, whether the dominant intention of the parties was to create an immediate and present demise or whether the documents were only executory contracts to create a lease in future.

31. Admittedly, possession of the property was not handed over to the tenant on the date of the execution of the documents, but it was postponed to a later date, however, giving option to the tenant to take delivery, if he so chose, the condition being that he should do so on or before 4-5-1969. under the first document, on or before 31-31970 under the second document and within 90 days under the third document, and that he should execute a registered agreement (in respect of each of the three leases) within three months from the date of his taking delivery of possession. So far as the lessor is concerned it is mentioned in the first two documents that he should deliver possession of the property to the tenant on or before the dates within which the tenant was given the option to take delivery of the property, and in the third instrument the lessor was obliged to deliver possession within ninety days i.e., on or before 31-8-1972. On a close reading of the documents, it is clear that the demise was to commence only on the happening of the contingent event, viz., the tenant taking delivery of possession at his option at a future date as Provided in the document and the lessor handing over possession, and thus the above contingent event was indeterminate. It was impossible on the dates of the execution of the above three documents to determine whether there could be a lease or not as it was contemplated to depend upon certain conditions. Therefore, it cannot be said that the agreements to lease were to operate as a Present demise commencing immediately or on a specified and determined date, leaving only the execution of a formal lease agreement at a future date. It is unambiguous and clear from the recitals in the three documents themselves that the parties had contemplated a failure of the contingency of the tenant taking delivery of possession of the property or his executing a registered lease agreement within the time specified in the documents. As pointed out by the Privy Council in Hemanthakumari's case, AIR 1919 PC 79, until the happening of that event of the lessee taking delivery of possession of the property, it was impossible, to determine whether there would be any lease or not. This possibility of the failure of the contingencies had necessitated the parties to in corporate a default clause in the agreements themselves, which clause reads -

'If the lessee fails to take delivery of possession on or before or to execute a regular lease agreement t his cost within three months from the date of taking Possession, of the schedule. mentioned property t his cost, the lessee shall forfeit the security amount and' the lessor be entitled to terminate this agreement of the lease of the schedule mentioned property after giving 15 days notice

As a matter of fact, the parties also seem to have understood by the documents that a demise in respect of the properties mentioned in the document should commence Only at a future date. This is clear from the special feature (e) mentioned in Para 3 of the reply statement filed on behalf of the lessee in H. R. C. No. 1584 of 1980, which I have already extracted supra. Under that clause the tenant states that it was understood that possession was specified to be given on 4-5-1969 under the first document dt. 15-3-1969, on 31-3-1970 under the second document dt. 16-2-1970, and on 31-8-1972 under the third document dt. 2-6-1972, despite the fact that the recital is to the effect that possession had to be given on or before the specified date. Admittedly no regular registered lease deed was prepared, executed or registered.

32. No rent has been paid by the tenant, though each of the documents provides the rate of rent to be paid from the date of taking possession of the property. However, in pursuance of the impugned documents, a sum of Rs. 1300 under the first instrument, a sum of Rs~ 1200 under the second document and a sum of Rs. 15000 under the third document, have been paid by the tenant only as a security for the due performance of the obligation on his Dart, as mentioned above, under the impugned instruments and for the proper and full compliance with the covenants contained therein after taking delivery of possession of the property, which security amounts were liable to be forfeited on the tenant failing to comply with the conditions contained in each of the documents. The contention of the tenant, as seen from special feature (b) in Para 3 of his reply statement, that the above said amounts were taken as advance at the time of the execution of the said documents, is wholly incorrect and cannot be countenanced.

33. The next important thing to be noticed is that there is a specific clause in the second and third instruments, which spells out that the parties never intended to transfer under the documents, any right -in favour of the transferee viz., the lessee, to enloy the property as at lessee as contemplated u/s. 105 of the T. P. Act. The above clause in the two documents reads thus -

'This agreement is executed only, to bind the Parties as an agreement for lease and not intended to transfer any right over the immoveable property From the above clause one can safely arrive at the conclusion that the parties have made it clear in unambiguous and clear language that they never intended that any right over the schedule mentioned property should be transferred under the said documents themselves in favour of the lessee, but that they had Only treated the documents as binding the in to ful fil the obligations on their part as contemplated therein. The imdugned docunients'are thus only executory in nature. The judgments relied on by the learned Advocate General in support of his contention that although the lease term was to commence at a future date and a formal document was to be executed engrafting all the conditions agreed upon, nevertheless these documents have as a matter of fact created a present demise, cannot be of any help to him in the Present case.

34. In Rarn-ioo Mahomed v. Haridas Mullick : AIR1925Cal1087 , cited by the learned Advocate General the facts were that the plaintiff was in possession of Premises at all material times, both before and after the two letters which were alleged to be agreements to lease. In that case, it has been observed bv the Calcutta High Court while determining the meaning of the term 'present demise' that 'whether an agreement amounts to a Present demise Or not depends upon the intention of the parties, which is to be gathered from the language in which the agreement is couched.'

It was only having regard to the facts and circumstances of that case and the language deployed in the documents, the learned Judge concluded that the parties intended that the two lease deeds should transfer to the Plaintiff an immediate interest in the Premises and that if formal leases were to be executed, the further documents should be settled on the~ terms set out in the plaintiff's letter and Would only be executed by wav of further assurances and hence the two letters not having been registered~ were inadmissible by reason of the provisions of S.' 49 of the Registration Acr4

35. In the present case, as pointed Out by me above, possession was not taken by the lessee at the time of the execution of the documents in question and it was left open to him to take delivery of possession or not and only on his so taking delivery, an interest was to commence under each of the documents. Hence, the principles laid down in the above Calcutta decision are not helpful to the appellant.

36. Very much reliance was placed by the Advocate General on the decision in Mopurappa's case, : AIR1934Mad418 In that case, the facts were as follows: Mopurappa, the appellant, purchased the property in question on 5th Sept.,1930. The respondent was then in possession of the property from the vendor under a tenancy, which was to end on 30-9-1931. On 14-7-1931, the respondent entered into an oral agreement in question, according to which the appellant agreed to give the respondent a three vears' lease at a entalofRs.5per month and the lease was to commence on 1-10-1931, and on the same date, an advance of two onths' rent deed 1931,and sent to the respondent for approval. The respondent ' refused to execute the lease deed. When a question arose whether oral agreement for a lease for three Years amounted to a lease necessitating registration, a Bench of this court held that it necessitated a registered document having regard to the fact hat all terms and details had been settled by the parties and only the preparation of a formal lease deed remained to be done. The learned Judges, taking into con sideration two important circumstances, viz, that he respondent was already in possession on the date of the oral agreement and had also paid two months' rent as advance on the same day of the agreement, held that there was a concluded agreement despite the act that a formal document was to be execut ed in future. Therefore, the principles laid down in that decision cannot be availed of by the revision petitioner in the present case.

37. In Bechardas v. Ahmedabad Municipality,, AIR 1941 Bom 346 possession of the propertv was given to the lesee under an agreement On Ist April, 1934, and from. that date the 'parties acted exactly as though the tenancy was in force. The municipality wrote a letter to Bechardas, the lessee, asking him to pay the money for the registered deed, It was contended on behalf of the respondent that there was no actual demise and that no immediate interest in the property was created and that the intention of the parties was that a formal lease should be executed and registered, and therefore, until that was done, there was nothing which could be called an agreement to lease. Rejecting this argument, it was held that there was a present demise in the said case and that the document required registration. As pointed out above, possession had been given to the lessee and what remained to be done was only the execution of a formal deed. The plaintiff therein had taken the property on lease by public auction. In the present case, whether there would be an actual lease or not was left at the option of the lessee and therefore the decision in Bechardas case AIR 1941 Bom 346 is not helpful to the revision petitioner.

38. In Trivenibai v. Lilabai, : AIR1959SC620 , which was strongly relied upon by the petitioner, it has been observed that while construing an agreement to lease, regard must be had to all the relevant and material terms and an attempt must be made to reconcile the relevant terms, if possible, and not to treat any of them as idle surplus age. If we examine the documents on hand in the present case, it is unequivocally clear from the specific recitals in the second and third docutments that the parties had not intended to bring about any unqualified and unconditional transfer of any right over the property agreed to be leased out, either immediately or on and other specified or ascertained date. On the other hand, the transfer was, to take place dependent upon the option to be exercised by the lessee. Hence, though the agreements contemplated that possession should be given in future and contained other terms of tenancy, all the above terms are subject to the option to be exercised by the lessee. Therefore, the principles laid down in Trivenibai's case cannot go in aid of the case of the petitioner in view of the option given to the lessee in this case.

39. As there are, a series of judicial authoritative pronouncements holding that the intention of the arties as declared by the, 'words of the. Instrument in question must govern the construction in finding out whether the instrument imparts a Present and immediate demise, the court must endeavour to discover the intention of the parties from the contents of the instrument and if in such an inquiry the court finds that the paramount intention of the parties was not to create an immediate and present demise, then the instrument needs no registration.

40. In my view, the documents with which we have to deal are not similar to those which were in question in the decisions relied on by the petitioner. So the contention of the learned Advocate general that the documents constitute a present demise of the property and that the condition that a formal lease was to be thereafter drawn up and executed was only in the nature of a further assurance, has to fail.

41. The so-called special features enumerated by the tenant in his replication, which I have extracted in fact do not make out a case in favour of the tenant, for the reasons given above. As repeatedly pointed out by me supra, in the present case there is a clear indication in all the three documents sought to be introduced 'hat the parties did not intend to transfer a right to enjoy the property in favour of the lessee and to create a present and immediate demise.

42. For all the reasons stated above I hold that the three documents in question do not require to be registered as Per the provisions of Section 17(d) of the Registration Act and consequently cannot be said to be inadmissible in evidence under the provisions of S. 49 of the said Act and they are also not chargeable with stamp duty as required by Section 35 of the Stamp Act.

43. 1n the result, therefore, I set aside the finding of the appellate authority that the documents do create a Present demise, but restore the, finding of the Rent Controller that they do not create a present and immediate demise. The Rent Controller and the appellate authority have concurrent1v found that these documents could be received in evidence for collateral purposes. Much argument was advanced by both the counsel on the scope of the admissibility or otherwise of these documents as evidence of the collateral transaction and both of them took me through a series of decisions. Since I have given a finding that these documents do not require to be registered under Section 17 of the Registration Act, there is no need for the examination whether the documents should be admitted as evidence of any collateral transaction as envisaged under the proviso to Section 49 of the said Act.

44. Accordingly, the order of the appellate authority affirming the dismissal Of M. P. 59 of 1981, and directing the admission of the three documents in question by the Rent Controller, is confirmed, though not for the reasons set out by him, but for the reasons assigned by me. Consequently, this revision petition is dismissed. The Rent Controller is directed to expedite the hearing of this case and dispose it of according a to law. No costs.

45. Revision dismissed.


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