Bookmark
PDF
Share
CaseIQ

Ramrao Nilkanth Nadk... v. Shrimant Purnanand S...

Bombay High Court

Dec 20, 1939

Judgment

Subsequent
References

CaseIQ

Important Paras

Please sign up to view Important Paras.

Smart Summary (Beta)

Structured Summary of the Opinion (Kania, J.)

Factual and Procedural Background

These are two Civil Revision Applications arising from a judgment of the First Class Subordinate Judge at Karwar. The factual matrix as stated in the opinion is:

In 1842 the plaintiff's predecessor-in-title granted a Mulgeni lease of certain lands to the defendants' family; the deed was not registered (Registration Act not then in force) and the original document appears to have been misplaced.
The defendants' predecessors paid rent under the tenancy, but a dispute arose in 1919 about the rent and suit No. 209 of 1919 was filed in the First Class Subordinate Judge's Court at Karwar, in which the defendants disputed the terms of the tenancy and their liability to pay rent as claimed.
While that suit was pending, the parties compromised their dispute; the compromise was recorded and a decree followed under Order XXIII, Rule 3. The material terms of that decree (set out in the opinion) confirmed the Mulgeni lease, fixed specified rents for 27 years and altered rent from the 28th year, and made the defendants liable to pay government assessment, local fund and future taxes.
The decree itself was not registered.
In 1936 the plaintiff (the original opponent in the revision applications) brought a fresh suit to recover Rs. 13-11-6 paid by the plaintiff as a punitive tax to Government, the claim being founded on the decree which allegedly made the defendants liable for taxes imposed thereafter.
At trial an objection was raised to the decree being admitted as an exhibit. The plaintiff sought to have the decree admitted on the basis of the doctrine of part performance under s. 53A of the Transfer of Property Act, and it was conceded at trial that the decree required registration. The trial Court admitted the decree on the basis of s. 53A.
On the present applications (brought before Kania, J.), the applicants contended the trial Court was wrong to admit the decree under s. 53A. The opponent (original plaintiff) withdrew an earlier admission that the decree required registration, saying that admission had been erroneously made.

Legal Issues Presented

Whether the decree, being unregistered, could be admitted in evidence on the basis of the doctrine of part performance under s. 53A of the Transfer of Property Act (i.e., whether s. 53A can be invoked as a ground of attack to make an unregistered decree admissible).
Whether the decree required registration under the Indian Registration Act, particularly whether it fell within s. 17(1)(b) or (c) (instruments creating, declaring, assigning, limiting or extinguishing rights in immovable property) or s. 17(1)(d) (leases of immovable property from year to year, or for any term exceeding one year, or reserving yearly rent), and if so whether s. 17(2)(vi) (exemption for decrees or orders of a Court) applied.
Whether the decree in the present case amounted to a new lease (thus attracting s. 17(1)(d)) or merely varied the rent of an existing lease (which would not necessarily require registration as a new lease).

Arguments of the Parties

Applicant(s)' Arguments

The applicants contended that the trial Court was wrong to admit the decree in evidence on the basis of s. 53A of the Transfer of Property Act.

Opponent (original plaintiff)'s Arguments

At trial the plaintiff contended the decree was admissible under the doctrine of part performance under s. 53A.
On the present application the opponent stated that an earlier admission (made in the trial Court) that the decree required registration under the Indian Registration Act had been erroneously made, and that admission was withdrawn.
The learned advocate for the opponents relied on a line of authorities (including Jayanal Abedin v. Hyderali Khan Pani and Shaila Bala v. Ganganarayan, and others) to support the contention that where there is a variation in the terms of a lease about the rent, the document containing those terms does not necessarily require registration as a new lease.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Suleman Haji Ahmed Umar v. P.N. Patell	Authority (Privy Council) indicating that s. 53A of the Transfer of Property Act operates as a defence (a right available to a defendant to protect his possession) and cannot be used as a ground of attack.	The court relied on the principle to hold that the trial Court's decision admitting the decree on the basis of s. 53A was unsound: part performance cannot be invoked by the plaintiff as a ground of attack to admit an unregistered instrument.
Probodh Kumar Das v. Dantmara Tea Co. Ltd. (Privy Council, unreported in the opinion)	Observation that s. 53A confers no right of action on a transferee in possession; the right is available only to a defendant to protect possession; s. 53A imposes a statutory bar on the transferor and confers no active title on the transferee.	The court cited these observations to reinforce that s. 53A cannot be used by a plaintiff as a ground of attack to admit an unregistered decree; it supports reversing the trial Court if that had been the sole basis.
Jayanal Abedin v. Hyderali Khan Pani	Authority supporting the proposition that variation in the terms of a lease as to rent does not necessarily amount to a new lease requiring registration.	The court considered this authority (and those following it) when addressing whether the decree created a new lease or merely altered the rent; it treated the reasoning as supportive of the conclusion that variation of rent alone may not require registration as a new lease.
Shaila Bala v. Ganganarayan	Followed Jayanal Abedin on the point that variation of rent may not amount to a new lease requiring registration.	Used as supporting precedent in the court's inquiry into whether the decree created a new lease or merely varied rent.
Jogesh Chandra Mukherjee v. Rai Behari Lal Mitra Bahadur	Cited in support of the contention that variations concerning rent do not necessarily create a new lease for registration purposes.	Referenced by the court as part of the authorities relied upon regarding variation of rent and registration consequences.
Kailas Chandra v. Madan Mohan	Cited similarly in support of the position that variation of rent does not necessarily create a new lease.	Referenced as part of the line of authorities considering variations of lease terms affecting registration.
Lalit Mohan Ghosh v. Gopali Chuck Coal Company Ltd.	Held that a document which varies essential terms of an existing lease (such as amount of rent, time of payment, consequences of default) would amount to a new lease and require registration.	The court contrasted this authority with others, treating it as a counterpoint: if the alteration were to be read as creating a new lease by varying essential terms, registration would be required, but the court found the present decree did not amount to such a creation.
Doe v. Geekie; Crowley v. Vitty; Inchiquin v. Lyons	English authorities holding that variation in rent agreed between parties does not necessarily create a new tenancy.	The court cited these as supporting authorities for the proposition that variation of rent alone will not necessarily create a new lease.

Court's Reasoning and Analysis

The court's analysis proceeded in two main stages.

On the admissibility of the decree under s. 53A (part performance):
The trial Court admitted the decree as an exhibit relying on s. 53A of the Transfer of Property Act (doctrine of part performance). Kania, J. held that this basis is unsound. He relied on the Judicial Committee of the Privy Council's authority (as discussed in Suleman Haji Ahmed Umar v. P.N. Patell and Probodh Kumar Das v. Dantmara Tea Co. Ltd.) and on the commentary of Sir Dinshah Mulla, to explain that s. 53A operates as a defensive right available to a defendant to protect his possession and does not confer an active right of action on a transferee. The section therefore cannot be invoked as a ground of attack by a plaintiff to render an unregistered instrument admissible in evidence. If the trial Court's decision to admit the decree rested solely on s. 53A, that decision would have to be reversed.
On whether the decree required registration under the Indian Registration Act:
The court then turned to s. 17 of the Indian Registration Act. It set out the relevant sub-clauses: s. 17(1)(b) and (c) (instruments purporting or operating to affect rights in immovable property), s. 17(1)(d) (leases from year to year, for a term exceeding one year, or reserving yearly rent), and the exemption in s. 17(2)(vi) that clauses (b) and (c) do not apply to any decree or order of a Court.

The critical question was whether the decree should be classified as creating a new lease (thus falling under s. 17(1)(d) and requiring registration) or whether it merely confirmed the existing Mulgeni lease and altered the rent (a variation that need not amount to creation of a new lease and could fall within s. 17(2)(vi) as a decree).

Examining the terms of the decree, the court noted:
- The decree expressly confirms the Mulgeni lease in existence and confirms the defendants' possession as tenants;
- It prescribes a specific rent for the first 27 years and a changed basis of rent thereafter (from the 28th year);
- It stipulates that defendants are to pay Government revenue, local fund and any future taxes, and reiterates that, subject to these conditions, the Mulgeni deed is kept intact.
The court observed that the alteration in the decree relates to the amount and basis of rent and to amplifying the tenant's existing liability to pay government revenue (which under the original Mulgeni lease was already a tenant's liability). The court was unable to construe this portion of the decree as amounting to the creation of a new lease; instead the alteration was confined to rent-related obligations and an amplification of the tax liability already attached to the tenancy.

Having so construed the decree, the court concluded it did not fall within s. 17(1)(d) as a new lease. Therefore the decree was not one which required registration under s. 17(1)(d), and because decrees are excluded from clauses (b) and (c) by s. 17(2)(vi) the decree could be admitted in evidence on the ground that it did not require registration.

Holding and Implications

Holding:

The court discharged the Rule in both applications and upheld the decision of the lower Court to admit the decree in evidence, but not on the ground relied on by the trial Court (s. 53A). Instead, the decree was admissible because it did not require registration under the Indian Registration Act: the decree confirmed the existing Mulgeni lease and, while it varied the rent and amplified the tenants' liability to pay government taxes, it did not create a new lease within the meaning of s. 17(1)(d).

Implications / Consequences:

The trial Court's reasoning to admit the decree under s. 53A was held to be legally unsound: s. 53A is a defensive provision and cannot be used as a ground of attack to admit an unregistered instrument. Had that been the sole basis, the admission would have been reversed.
On the statutory point of registration, the court concluded the decree did not create a new lease requiring registration under s. 17(1)(d) and thereby could be admitted in evidence because it did not require registration (and decrees are exempt under s. 17(2)(vi) from clauses (b) and (c)).
Because the lower Court's decision is upheld on a ground different from that on which the trial Court admitted the decree — and because there had been an admission on record (later withdrawn) regarding registration — the court ordered that there should be no order as to costs of these applications.
The decision resolves the dispute between the parties in this litigation by upholding the admission of the decree in evidence and by discharging the Rule in both revision applications. The opinion does not assert that it establishes a novel legal principle beyond applying existing authority; it treats existing authorities as guiding the disposition.

Rule discharged.

End of summary — content strictly limited to material contained in the provided opinion.

Show all summary ...

Kania, J.:—

These are two Civil Revision Applications from judgment of the First Class Subordinate Judge at Karwar. Although the amount involved is small the questions involved are somewhat important. The facts are that plaintiff's predecessor-in-title granted by a Mulgeni lease to the defendants' family certain lands in 1842. No Registration Act was then in force and the document was therefore not registered. The original document appears to have been misplaced but the predecessors of the defendant were paying rent. There arose a dispute in 1919 about the rent and suit No. 209 of 1919 was filed in the First Class Subordinate Judge's Court at Karwar. The defendants disputed the terms of the tenancy and their liability to pay the rent as claimed. Pending this suit the parties compromised the dispute. That compromise was recorded and a decree followed under O. XXIII, r. 3. The terms of that decree are material. The relevant portion runs as follows:

“As regards the Mulgeni in suit defendant No. 1 Sheshgiri Vasudevrao Nadkarni should go on paying to the plaintiff Samsthan, for 27 years from the current year 2 khandis and 17½ kolgas of rice of good quality every year before Magh Vadya 30th according to the conditions of the said Mulgeni. Thereafter from the 28th year … defendant No. 1 should go on paying from generation to generation to the plaintiff Samsthan every year at the rate of 4½ khandis of good rice by Shikka measure … and 100 cocoanuts before Magh Vadya 30th every year … The defendants alone should go on paying directly and peacefully, to the Government according to their respective rights, the amount of present assessment and local fund of the said lands and also the amount of Rajartha (money due to the King) by whatever amount it be increased in future. In case it is increased the plaintiff Samsthan is not liable for the same. In case the Rajartha is decreased defendants alone are entitled to and liable for the same according to their respective rights …………….Rajartha means the amount of assessment and local fund according to the present practice and all taxes that may be levied on the said lands hereafter. Subject to these conditions, the Mulgeni deed in suit is kept intact (confirmed).”

The decree is not registered. In 1936 the plaintiff brought a suit to recover Rs. 13-11-6 being the amount paid by the plaintiff as a punitive tax to Government. The claim was based on the decree which made the defendants liable for taxes imposed thereafter. In the trial Court an objection was raised to the decree being admitted as an exhibit. The plaintiff's contention was that it was admissible on the doctrine of part performance under s. 53A of the Transfer of Property Act. It was there conceded that the decree required registration. The trial Court upheld the plaintiff's contention. When the matter was brought here before me it was contended by the applicants that the trial Court was wrong in admitting the decree under s. 53A of the Transfer of Property Act. On behalf of the opponent (original plaintiff) it was stated that the admission in the lower Court that the decree required registration under the Indian Registration Act was erroneously made and was withdrawn. This being a point of law there was no objection to that.

In my opinion the decision of the trial Court that the decree was admissible because of s. 53-A of the Transfer of Property Act is unsound. The trial Court has based its decision on Suleman Haji Ahmed Umar…Plaintiff; v. P.N Patell…Defendant..(1) It is however held by the Judicial Committee of the Privy Council that s. 53A of the Transfer of Property Act serves as a defence and cannot be made a ground of attack. In Sir Dinshah Mulla's commentary on the Transfer of Property Act (2nd edn.) at p. 262 it is stated as follows:

“The right conferred by this section is a right only available to a defendant to protect his possession. It is limited to cases where the transferee has taken possession and against whom the transferor is debarred from enforcing any right other than expressly provided by the contract.”

Commenting on Suleman v. Patell it is stated as follows (p. 262):—

“In this case part performance was used not as a ground of defence but as a ground of attack. The cardinal principle was overlooked, viz., that part performance must be the act of the person seeking to avail himself of the equity and that acts of the person sought to be charged are of no avail.”

In a very recent judgment delivered by the Judicial Committee of the Privy Council in Probodh Kumar Das v. Dantmara Tea Co. Ltd. (which is still unreported) it is observed as follows (p. 202):—

“In their Lordships' opinion the amendment of the law effected by the enactment of section 53A conferred no right of action on a transferee in possession under an unregistered contract of sale. Their Lordships agree with the view expressed by Mr. Justice Mitter in the High Court that ‘the right conferred by s. 53A is a right available only to the defendant to protect his possession’. They note that this was also the view of their late distinguished colleague, Sir Dinshaw Mulla, as stated in the second edition of his treatise on the Transfer of Property Act at p. 262. The section is so framed as to impose a statutory bar on the transferor; it confers no active title on the transferee. Indeed, any other reading of it would make a serious inroad on the whole scheme of the Transfer of Property Act.”

These observations clearly show therefore that the plaintiff could not have used as a ground of attack the doctrine of part performance and got the decree admitted in evidence because of that section. If the decision of the trial Court is therefore considered from that point of view alone, it will have to be reversed.

The second point urged on behalf of the plaintiff that the decree does not require registration at all however appears sound. In this connection it is important to bear in mind the important provisions of s. 17 of the Indian Registration Act. It enumerates in cls. (b) and (c) non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest of the value of one hundred rupees and upwards, to or in immovable property or acknowledge the receipt or payment of any consideration on account of the sale. Section 17(1)(d) runs in these terms:

“leases of immovable property from year to year, or for any term exceeding one year, or reserving yearly rent.”

Sub-clause (2) runs as follows:

“Nothing in clauses (b) and (c) of sub-s. (1) applies to … (vi) Any decree or order of a Court …”

As I have pointed out, the original Mulgeni lease was passed in 1842 and did not require registration. The decree in question if it fell within s. 17(1)(b)(c) would be exempt from registration by reason of s. 17(2)(vi). If on the other hand, the decree was covered by s. 17(1)(d), that is if it was held to be a lease of an immovable property from year to year or for a term exceeding a year reserving a yearly rent, the fact that it is embodied in a decree will not save it from the necessity of registration.

The learned advocate for the opponents relied on Jayanal Abedin v. Hyderali Khan Pani, which was followed in Shaila Bala v. Ganganarayan,(2) and also on Jogesh Chandra Mukherjee v. Rai Behari Lal Mitra Bahadur(3) and Kailas Chandra v. Madan Mohan(4) in support of his contention that where there is a variation in the terms of the lease about the rent the document containing those terms does not require registration as a new lease. A decision that it requires registration because it is covered by s. 17(1)(b)(c) cannot help the defendant. In Lalit Mohan Ghosh v. Gopali Chuck Coal Company, Ltd.,(5) it was held that a document which varies the essential terms of an existing lease such as the amount of rent, the time of payment thereof and the consequences of default, would amount to a new lease and required registration. On the other hand in Doe v. Geekie,(6) Crowley v. Vitty,(7) and Inchiquin v. Lyons,(8) it has been held that while a tenant from year to year is in possession of the lands under an agreement reserving a certain rent, and he agrees to pay an increased or reduced rent, this will not necessarily have the effect of creating a new tenancy. It was pointed out in Jayanal Abedin v. Hyderali Khan Pani that the question of variation of the rent did not affect the question of registration, because though it may not in itself amount to a lease yet it may quire registration under the other sub-clauses of s. 17(1).

The question therefore is whether the decree in this case creates a new lease or merely alters the amount of the rent provided in the previous lease. Turning to the decree it is evident that it confirms the mulgeni lease which was in existance and confirms the possession of the defendants as tenants. For the first twenty-seven years a stipulated rent as stated therein has to be paid and from the 28th year the rent is to be paid on an altered basis. There is a further stipulation that the tenant is to pay the Government revenue and local fund tax and whatever further tax may be imposed in future if the same is due to Government. At the end of the clause it is further reiterated that subject to these conditions, the mulgeni lease is kept intact. The only contention urged here is that the stipulation about payment of the further tax to Government if any, alters the terms of the lease. But it must be remembered that the alteration is only in connection with the rent. The scheme is that in addition to the stipulated rent (which is varied) the tenant agreed to pay the Government revenue, local fund tax and any other Government tax which may be imposed. This is not a condition varying any other terms of the lease but only varying the amount of the rent payable by the tenants. Under the mulgeni lease it is not disputed that the liability to pay Government revenue was upon the tenants. The variation is open to the construction that the intention was merely to amplify this provision and nothing more. Whatever be the intention, the effect is that the liability of the tenant to pay the stipulated rent to the landlord is coupled with a stated liability to pay the taxes. I am unable to read this portion as amounting to a creation of a new lease. The case therefore is not covered by s. 17(1)(d) of the Indian Registration Act and the conclusion of the lower Court that the decree is admissible in evidence is upheld but on the abovementioned ground. As the decision of the lower Court is upheld on a ground on which there was an admission on behalf of the plaintiff (which is now withdrawn), I think there should be no order as to costs of these applications. The Rule in both the applications is discharged.