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Case Number

S.A No. 277/2 of 1954

Advocates

For the Appellant: A. Ramaswami Ayyangar, P.L. Gajapathi Rao, Advocates.
For the Respondent: K. Ramgopal, Advocate.

Judges

K. Subba Rao, C.J

Acts

provisions of S. 28 of the Legal Practitioners Act, S. 212 of the Indian Companies Act and section 6 (a) of the Transfer of Property Act
provisions of the Registration Act or the Cantonments Act
provisions of S. 53-A of the Transfer of Property Act
provisions of S. 114 of Cantonment Act. Section 114 (1)
provisions of the Cantonments Act read : "Section 108.
SECTION 2 GOVERNMENT GRANTS ACT
provisions of S. 114 of the Cantonments Act
TRANSFER OF PROPERTY ACT
S. 53-A of the Transfer of Property Act
S. 2 of the Government Grants Act.

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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

This second appeal challenges the decree and judgment of the District Judge, Secunderabad, which had confirmed the decree of the District Munsiff dismissing the plaintiff/appellant's suit. The plaintiff (appellant) is a butcher who occupied two mutton stalls in the Cantonment General Market, Secunderabad. In 1933 the Cantonment Board passed a resolution allotting "Mutton stalls Nos. I and II" to the plaintiff "during his lifetime or until he gives notice of vacation" on the condition that the right was not under-let or transferred. Although ballots were held annually for stall allotments, the two stalls were excluded pursuant to that resolution and the plaintiff continued in exclusive possession.

When the defendant (Cantonment Board) attempted to auction these stalls along with others, the plaintiff filed suit seeking a declaration of permanent rights in respect of the two stalls and an injunction restraining the defendant from interfering. The defendant contended that the resolution conferred only a revocable concession and that no leasehold interest in perpetuity was created; further, that no document complying with the Registration Act or the Cantonments Act had been executed. The plaintiff relied alternatively on the contention that the grant was a Crown grant and invoked S. 53-A of the Transfer of Property Act to protect his possession. Both lower courts rejected the plaintiff's contentions and dismissed the suit; this appeal followed.

Legal Issues Presented

Whether the Cantonment Board's 1933 resolution amounted to a Crown grant (or a grant made on behalf of the Crown) exempting the transfer from the operation of the Transfer of Property Act (by virtue of the Government Grants Act).
Whether, assuming the arrangement was a lease, the plaintiff could rely on S. 53-A of the Transfer of Property Act to protect his possession where no registered document or formal lease complying with the Cantonments Act had been produced.
Whether the contract (if any) embodied by the resolution was valid and binding on the Cantonment Board in the absence of compliance with S. 114 (and related provisions) of the Cantonments Act.
Whether the procedural and formal requirements of Chapter VII of the Cantonments Act (including S. 114 and S. 115) apply to contracts concerning immoveable property vested in a Board, and whether failure to comply renders the contract non-binding on the Board.

Arguments of the Parties

Appellant's Arguments

The appellant contended that the lease/allotment of the stalls by the Cantonment Board was a Crown grant, and therefore the Transfer of Property Act would not apply (relying on Section 2 of the Government Grants Act XV of 1895).
Alternatively, the appellant argued that even if registration formalities had not been completed, S. 53-A of the Transfer of Property Act protected his possession in part performance and allowed him to resist eviction.
When challenged on formalities under the Cantonments Act, counsel suggested that the court should presume the required formalities had been complied with (i.e., that the necessary Board signatures, countersignature and seal existed).

Respondent's Arguments

The defendant argued the resolution created only a concession revocable at pleasure and did not amount to a leasehold interest in perpetuity.
The defendant contended that the Cantonment Board did not act on behalf of the Crown, and therefore the Government Grants Act exemption did not apply.
It was asserted that S. 53-A presupposes a valid contract; here the contract was said to be ab initio void because the statutory formalities prescribed by S. 114 of the Cantonments Act were not complied with.
The defendant pointed out that it had pleaded non-enforceability and that, if a valid contract complying with S. 114 existed, the plaintiff would have produced it or procured its filing from the Board.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Achayya v. Venkata Subba Rao, 1956 Andhra WR 830 (AIR 1957 Andhra Pradesh 854)	Interpretation of S. 53-A (Transfer of Property Act): recognition of defensive equity — the transferee may use part performance as a shield but not as a sword; protection is available to the transferee whether he is plaintiff or defendant.	The court treated this Division Bench decision as binding and held that, if the other conditions of S. 53-A are satisfied, the plaintiff in possession could invoke S. 53-A defensively to resist the defendant's attempts to recover possession.
Arseculeratne v. Perera, AIR 1928 PC 273	Doctrine of part performance cannot avail a person if the contract is otherwise invalid under another law (i.e., part performance does not validate an otherwise illegal/invalid contract).	The court relied on this Judicial Committee decision to state that S. 53-A cannot validate a contract which is invalid under some other statutory provision; thus part performance cannot assist the plaintiff if the contract contravened the Cantonments Act requirements.

Court's Reasoning and Analysis

The court's analysis proceeded in distinct steps, applying statute-based interpretation and precedent.

Crown grant argument:
- The court examined Section 2 of the Government Grants Act (which excludes application of the Transfer of Property Act to grants made by or on behalf of the Government) and asked whether the Cantonment Board's resolution could be treated as a grant by the Crown or on behalf of the Crown.
- The court analyzed the Cantonments Act (notably S.108 and S.111). Section 108 vests markets, slaughter houses, etc., in the Board, and Section 111 permits the Central Government to make rules governing transfer of property vested in a Board.
- From a combined reading, the court concluded that markets vest in the statutory Board and the Board manages and controls them under statutory provisions. In discharging statutory functions the Board does not function as the agent of the Crown.
- Therefore the Board's lease/allotment could not be treated as a Crown grant or a grant made on behalf of the Crown. The court found it unnecessary to decide whether the market is "land" for purposes of the Government Grants Act.
Applicability of S. 53-A (Transfer of Property Act):
- The court reiterated the principle from Achayya that S. 53-A gives the transferee a statutory defensive right (shield) to protect possession even when registration formalities are absent, provided the conditions of the section are met.
- The court said the plaintiff was in possession and could, in principle, rely on S. 53-A defensively to resist the defendant's attempt to recover possession.
Validity of the underlying contract and effect of Cantonments Act formalities:
- The court emphasized that S. 53-A presupposes the existence of a valid contract "to transfer for consideration any immoveable property by writing signed by him or on his behalf" from which terms can be ascertained.
- Relying on authority (Arseculeratne), the court stated that the doctrine of part performance cannot rescue possession where the contract is otherwise invalid under law.
- Sections 114 and 115 of the Cantonments Act were considered. S.114(1) requires every contract made by or on behalf of a Board (exceeding Rs.50) to be in writing, signed by two members (one being President or Vice-President), countersigned by the Executive Officer and sealed with the common seal of the Board. S.115 provides that a contract not made in conformity with Chapter VII is not binding on the Board.
- The court found that no contract in compliance with S.114 had been produced; the defendant had pleaded non-enforceability; accordingly the contract was not binding on the Board.
Scope of Chapters VI and VII of the Cantonments Act:
- The appellant argued Chapter VII should not apply to immoveable property. The court rejected this, observing that Chapter VI deals with Cantonment fund and property (both movable and immovable) and Chapter VII (titled "Contracts") sets out how contracts are to be executed and applies equally to both movable and immovable property.
- Consequently, the formal requirements of Chapter VII (S.114 etc.) apply to contracts concerning immoveable property vested in the Board.
Conclusion from combined reasoning:
- Because the contract did not comply with S.114 and thus was not binding on the Board, the essential condition for invoking S. 53-A (a valid contract in writing) was absent. Therefore S. 53-A could not assist the plaintiff.
- Having rejected the Crown-grant argument and the applicability of S.53-A in the absence of a valid contract, the court affirmed the dismissal of the plaintiff's suit.

Holding and Implications

Core Ruling: Appeal dismissed; the decree of the lower court is confirmed.

Implications:

Direct effect on the parties: The plaintiff's suit for declaration of permanent rights in respect of the two mutton stalls and for an injunction was dismissed; the Cantonment Board's position was upheld. The appeal was dismissed with costs and the court recorded "No leave."
Legal consequence: The court held that (a) a Cantonment Board's allotment under the facts could not be treated as a Crown grant for the purposes of excluding application of the Transfer of Property Act; and (b) S. 53-A cannot be invoked where the underlying contract is invalid for non-compliance with statutory formalities (S.114/S.115 of the Cantonments Act). Thus a transferee's possession under part performance cannot validate a contract that the Cantonments Act renders non-binding on the Board.
Precedential effect: The opinion applies and follows existing authorities (notably Achayya and Arseculeratne) and does not purport to establish a new legal principle beyond the application of those authorities and the statutory interpretation herein.

This summary is based exclusively on the information contained in the provided opinion. No facts or legal conclusions beyond the opinion text have been added.

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Akram Mea v. The Secunderabad Municipal Corporation .

Judgement

This second appeal is filed against the decree and judgment of the Court of the Dist. Judge, Secunderabad, confirming that of the District Munsiff in a suit filed by the appellant for a declaration of his rights in respect of two mutton stalls and for an injunction restraining the defendant from interfering with his rights.

2. The facts, admitted or found, may be briefly stated. The plaintiff is a butcher carrying on his trade in the mutton stalls owned by the Cantonment authorities in Secunderabad. It appears that in 1929 there was a butchers strike in Secunderabad and, during that period, the plaintiff rendered valuable assistance to the Cantonment authorities. In appreciation of his services, the Cantonment Board passed the following resolution dated 20th August. 1933 :

"Mutton stalls Nos. I and II in the Cantonment General Market to be allotted to Mr. Akram Mia during his lifetime or until he gives notice of vacation subject to the condition that this right is not under-let or transferred."

3. Though the Cantonment authorities held every year a ballot for allotment of stalls, pursuant to the aforesaid resolution, the said stalls were not included in the ballot and the plaintiff was allowed to continue to be in exclusive possession thereof. As the defendant, in violation of the terms of the aforesaid resolution, attempted to auction the aforesaid two stalls along with the other stalls in the city, the plaintiff filed the suit for a declaration of his permanent right to the said stalls and for an injunction restraining the defendant from interfering with his rights.

4. The defendant pleaded that, under the resolution, the plaintiff was given only a concession, which could be revoked at their pleasure having regard to the supervening circumstances. They also pleaded that, under the said resolution, no leasehold interest in perpetuity was created in favour of the plaintiff and that, even if it purported to do so the resolution could not legally create any such interest as no document complying with the provisions of the Registration Act or the Cantonments Act was executed in his favour. The plaintiff sought to get over the legal objections raised by the defendant by pleading that the grant was a Crown grant and that his possession was protected under S. 53-A of the Transfer of Property Act.

5. Both the Courts held against the plaintiffs contention and dismissed the suit. Hence, the appeal.

6. Learned counsel for the appellant contends that the lease of the stalls by the Cantonment authorities in plaintiffs favour was a Crown grant and, therefore the provisions of the Transfer of Property Act would not apply to such a grant. Section 2 of the Government Grants Act XV of 1895 says :

"Nothing in the Transfer of Property Act, 1882, contained shall apply or be deemed ever to have applied to any grant or other transfer of land of any interest therein heretofore made or hereafter to be made by or on behalf of the Government to or in favour of any person whomsoever; but every such grant and transfer shall be construed and take effect as if the said Act has not been passed."

7. The section will apply only to a case where the grant was made by the Crown or on behalf of the Crown. Assuming that the aforesaid resolution could be construed to be a grant of the stalls made in favour of the appellant, obviously it was not a grant made by the Crown. Can it be said that it was a grant made on behalf of the Crown? It is said that Cantonment Board in making the grant acted on behalf of the Crown. The relevant provisions of the Cantonments Act read :

"Section 108. - Subject to any special reservation made by the Central Government all property of the nature hereinafter in this section specified which has been acquired or provided or is maintained by a Board shall vest in and belong to that Board, and shall be under its direction, management and control, that is to say -

(a) All markets, slaughter houses, manure and night soil depots and buildings of every description.

Section 111 :- The Central Government may make rules consistent with this Act to provide for all or any of the following matters, namely :

(a) the conditions on which property may be acquired by Boards or on which the property vested in a Board may be transferred by sale, mortgage, lease, exchange or otherwise."

8. A combined reading of the aforesaid provisions indicates that markets vest in and belong to the Board and the Board can lease the said markets in accordance with the statutory rules prescribed under S. 111 of the Act. Under the Act, markets are vested in a statutory body and the management of the said markets is regulated by the said statute itself. In discharging the statutory functions, the Board does not function as the agent of the Crown. I cannot, therefore, accept the argument that the Board in leasing out the markets acts on behalf of the Crown. In this viewy, it is not necessary to express my opinion on the question whether the market is a "land" within the meaning of S. 2 of the Government Grants Act.

9. Learned counsel for the appellant then argues that, though the lease of the stalls was not effected in his favour under a registered document, he could rely upon the provisions of S. 53-A of the Transfer of Property Act. It may be mentioned, at the outset, that both parties argued on the basis that the transaction whereunder the plaintiff was left in enjoyment of the stalls was a lease but learned counsel for the Respondent contended that S. 53-A presupposes the existence of a valid contract and that, in the present case, the contract was ab initio void inasmuch as the provisions of S. 114 of the Cantonments Act were not complied with. The material portion of S. 53-A of the Transfer of Property Act may be extracted.

"Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract."

10. Under this section, the proposed transferee can protect his possession by invoking S. 53-A but cannot assert any active title on the strength of that possession. A Division Bench of this Court, of which I was a member, considered the scope of the defence of equity in Achayya v. Venkata Subba Rao, 1956 Andhra WR 830 : (AIR 1957 Andhra Pradesh 854) (A). At page 832 of Andh WR (at pp. 855-856 of AIR), I observed thus.

"Under the terms of the section the transferor is debarred from enforcing against the transferee only rights in respect of the property and this bar does not depend upon the array of the parties. The transferee can resist any attempt on the part of the transferor to enforce his rights in respect of property whatever position he may occupy in the field of litigation. In one sense, it is a statutory recognition of the defensive equity. It enables the transferee to use as a shield against any attempt on the part of the transferor to enforce his rights against the property.

Whether the transferee occupies the position of a plaintiff or a defendant, he can resist the transferors claim against the property. Conversely, whether the transferor is the plaintiff or the defendant, he cannot enforce his rights in respect of the property against the transferee. The utility of the section or the rights conferred thereunder should not be made to depend on the manoeuvering for positions in a Court of law; otherwise a powerful transferor can always defeat the salutary provisions of the section by dispossessing the transferee by force and compelling him to go to a court as plaintiff.

Doubtless, the right conveyed under the section can be relied upon only as a shield and not as a sword but protection is available to the transferee both as a plaintiff and as a defendant so long as he uses it as shield."

11. This judgment is binding on me. If so, it follows that, if the other conditions laid down under the section are satisfied, the plaintiff can rely upon the contract as a shield. He is admittedly in possession and the defendant is attempting to recover possession from him. Relying upon his possession under the contract as a shield, he has filed the suit for an injunction against the defendant. The aforesaid decision clearly enables him to do so.

12. But there is another insurmountable obstacle in the way of plaintiff. The necessary condition, which enables a transferee to invoke the provisions of the section, is that there should have been a contract to transfer for consideration any immoveable property by a writing signed by the transferor in his favour. It necessarily implies that the contract contemplated by the section is a valid contract. If the contract is otherwise valid, S. 53-A protects the possession of the transferee, notwithstanding the fact that the contract is not registered. But, if the contract is invalid under any other law, this section obviously cannot validate that which the law says is invalid.

13. The Judicial Committee in Arseculeratne v. Perera, AIR 1928 PC 273 (B), held that the doctrine of part performance could not avail a person if the contract is otherwise invalid. There, the agreement of partnership provided that the capitalist partner would give over a lease of a mine to be worked by the partnership. The agreement was invalid as it was not executed before a notary public. The other partner took possession and worked the mine for three years. But the Judicial Committee held that the partner in possession could not avail himself of the doctrine of part performance as the agreement, whereunder he secured possession, contravened the provisions of the Ceylon Ordinance.

So too, contracts infringing the provisions of S. 28 of the Legal Practitioners Act, S. 212 of the Indian Companies Act and section 6 (a) of the Transfer of Property Act were not allowed by the Courts to sustain the plea of part performance. Assuming that the resolution embodies the terms of the contract between the plaintiff and the Cantonment Board, the resolution did not comply with the provisions of S. 114 of Cantonment Act. Section 114 (1) says :

"Every contract made by or on behalf of a Board the value or amount of which exceeds Rs. 50 shall be in writing and every such contract shall be signed by two members, of whom the President or the Vice-President shall be one, and be countersigned by the Executive Officer and be sealed with the common seal of the Board."

14. Under S. 115 of the Act, if any contract is executed by or on behalf of a Board otherwise than in conformity with the provisions of this Chapter, it shall not be binding on the Board. A contract, therefore, entered into by or on behalf of the Board must be signed by two members of whom the President or the Vice-president would be one and it should be countersigned by the Executive Officer and sealed with the common seal of the Board and if the said conditions are not complied with, the contract is not binding on the Board. In the present case, no such contract was entered into by the Board with the plaintiff.

Learned counsel suggests that the Court should presume that all the necessary formalities have been complied with. The defendant in the written statement clearly stated that the contract was not legally enforceable, and if really there was any such contract executed in compliance with the provisions of S. 114 of the Cantonments Act, the plaintiff would have produced it, or, at least would have taken steps to have a copy of the same filed by the Cantonment Board.

15. Learned Counsel made another attempt to. escape the legal consequences of the non-compliance with the provisions of S. 114 by contending that Chapter VI should be confined to contracts of property other than immoveable property. He argues that Ss. 108 to 111 of Chapter VI deals with immoveable property and, therefore, the succeeding Chapter VII dealing with contracts must be confined only to contracts of property other than immoveable property. The scope of Chapter VI is not confined to immoveable property alone.

The general heading of the Chapter is "Cantonment Fund and Property." Sections 106 and 107 provide for the formation of a Cantonment fund and for its custody. Section 108, whose marginal note is property, vests in the Board the various properties, moveable and immoveable, mentioned therein and confers on the Board the power of management and control. Section 109 enjoins on the Board a duty to apply its fund and property for the purposes mentioned in the Act.

Section 110 evolves a machinery for the acquisition of immoveable property for the Board. Section 111 enables the Government to make rules to provide for all or any of the conditions on which property may be acquired by the Board and in regard to any other matter relating to cantonment fund and property in respect of which no provision is made in the Act. It is, therefore, clear that Chapter VI does not purport to provide for contracts in respect of immoveable property.

They are general provisions dealing with the constitution, custody, vesting and management of both moveable and immoveable properties vested in the Board. The manner of executing contracts is specially provided for by Chapter VII. The general heading of Chapter VII is "contracts" and the provisions of that chapter apply equally to moveable and immoveable properties. I cannot, therefore, hold that the contract of lease in respect of immoveable property is excluded from the operation of Chapter VII.

As the requirements of S. 114 were not complied with in the case of the present lease, the contract was not binding on the Cantonment Board and, therefore, the provisions of S. 53-A of the Transfer of Property Act could not be invoked by the plaintiff.

16. In the result, the decree of the lower Court is confirmed. The appeal fails and is dismissed with Costs. No leave.

Appeal dismissed.

Akram Mea v. The Secunderabad Municipal Corporation .

Concise Analytical Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Akram Mea v. The Secunderabad Municipal Corporation .

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