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Smart Summary

Structured Summary of the Opinion — Chatterji, J. (with Pande, J. concurring)

Factual and Procedural Background

The plaintiffs brought suit for recovery of possession of a 9 annas share of village Jalalpur Paindapur and for mesne profits of Rs. 2279-1-11 (alternatively, damages). The factual chain as presented in the opinion:

  • Defendant 1 previously held the disputed 9 annas share under a zarpeshgi lease (patta dated 13-10-1939) for the period 1341 to 1347 Fasli.
  • Defendant 2 purportedly granted to the plaintiffs a thika lease dated 28-6-1940 (annual jama Rs. 650) for the period beginning 1348 to 1854 Fasli; the plaintiffs claim they came into possession under that lease.
  • Plaintiffs allege defendant 1 gave up possession on expiry of his lease in 1347, but defendant 1 later dispossessed the plaintiffs on 12-3-1941 following proceedings under Section 144 CrPC.
  • Because defendant 1 claimed Rs. 100 was due to him from defendant 2, the plaintiffs deposited Rs. 100 in favour of defendant 1 under Section 83 of the Transfer of Property Act on 30-5-1941, and then instituted the present suit on 13-6-1941.

Procedural history relevant to this High Court appeal:

  • The learned Subordinate Judge (2nd Court, Patna) tried the suit and decreed it in favour of the plaintiffs, declaring them thiekadars and directing recovery of possession (mesne profits to be ascertained later).
  • The learned District Judge of Patna confirmed the Subordinate Judge's decision (producing a decision which was the basis for an appeal).
  • The present appeal was brought by defendant 1. It was originally presented as a second appeal but the Court's stamp-reporter reported the appeal had been undervalued; the appeal valuation was corrected from Rs. 2929-1-11 to Rs. 7679-1-11 and the appeal was treated as a first appeal, with the consequence that the District Judge's decree must be deemed to have been passed without jurisdiction.
  • The High Court ultimately allowed the appeal and dismissed the suit; no order as to costs was made and the District Judge's decree was to be set aside as passed without jurisdiction.

Legal Issues Presented

  1. Whether the plaintiffs acquired a valid lease under the registered patta dated 28-6-1940, given the requirements of Section 107 of the Transfer of Property Act regarding execution of registered instruments by both lessor and lessee.
  2. Whether the plaintiffs' lease qualifies as an agricultural lease and is therefore exempt from the operation of Section 107 by virtue of Section 117 of the Transfer of Property Act.
  3. Whether the thika patta should be treated as a mortgage (i.e., whether the zarpeshgi arrangement had the essential characteristics of a mortgage) rather than a lease.
  4. Whether, alternatively, the plaintiffs could claim a valid lease for one year by oral agreement accompanied by delivery of possession under Section 107.
  5. Whether defendant 1 had been permitted to remain in possession by reason of having paid an additional Rs. 100 to defendant 2 (and whether such payment occurred).

Arguments of the Parties

Appellant (Defendant 1)'s Arguments — as presented by Mr. Nawal Kishore Prasad

  • The plaintiffs' registered patta does not create a valid lease because Section 107 of the Transfer of Property Act requires that a registered instrument creating a lease must be executed by both lessor and lessee; in this case the patta was executed by the lessor (defendant 2) alone while a separate kabuliat was executed by the plaintiffs alone.
  • Defendant 1 asserted that at the time of final wasilbaqi (Jeth 1347) defendant 2 demanded Rs. 100 in addition to Rs. 108-13-3, and that defendant 1 paid the extra Rs. 100 and was allowed to continue in possession (i.e., his possession was not displaced by the plaintiffs).

Respondents (Plaintiffs)' Arguments — as presented by Mr. Dasu Sinha

  • The registered patta and the kabuliat should be treated together as constituting one instrument, thereby satisfying Section 107's requirement that the instrument creating a lease be executed by both lessor and lessee.
  • The lease is an agricultural lease and is therefore exempt from the operation of Section 107 by virtue of Section 117 of the Transfer of Property Act; the patta's recital concerning khudkast land and the thikadars' obligation to cultivate and send polished rice supports this characterization.
  • The thika patta might be a mortgage rather than a mere lease (i.e., the transaction could have the characteristics of a mortgage rather than a pure lease).
  • Even if the registered patta did not comply with Section 107, the lease could operate as a one-year oral lease accompanied by delivery of possession under Section 107(2) (i.e., an oral agreement with delivery of possession suffices for a lease not exceeding one year).
  • Defendant 2 filed a written statement supporting the plaintiffs' claim.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Maheshwari Prasad v. Manrajo Kuer (23 Pat. 1851) — Full Bench Held that a thika lease for collection of rents is not a lease for agricultural purposes (i.e., not an agricultural lease governed by tenancy law). The Court relied on this Full Bench authority to treat the plaintiffs' thika patta (read as a whole) as a thika lease for collection of rents and therefore not an agricultural lease exempt under Section 117.
Sri Ram Chandra Naik v. Ajodhya Singh (15 Pat. 82) Held in that case that a lease which combined the right to collect agricultural rents and the right to cultivate lands was an agricultural lease governed by the Tenancy Act. The Court noted this decision but observed that it had been considered and qualified by the subsequent Full Bench decision in Maheshwari Prasad (supra); thus it did not support the plaintiffs' claim that the present patta was agricultural.
Kesho Prasad Singh v. Chandrika Prasad Singh (2 Pat. 2173) Explained the distinction between a zarpeshgi lease properly so called and a zarpeshgi transaction which in effect amounts to a mortgage (description of criteria distinguishing lease from mortgage). The Court applied the criteria from this authority to the present thika patta and concluded the patta did not create a mortgage-like interest (no provision for possession to continue as security until repayment); therefore the instrument was not a mortgage.

Court's Reasoning and Analysis

The Court's analysis proceeded step-by-step, applying statutory requirements and precedent to the facts as found by the trial court:

  1. Section 107 requirement — execution by both lessor and lessee:
    • The Court observed that the registered patta (Ex. 3) was executed by defendant 2 alone while the kabuliat (also registered) was executed by the plaintiffs alone. Section 107 requires that "such instrument ... shall be executed by both the lessor and the lessee."
    • The Court rejected the plaintiffs' submission that the two instruments should be treated as one so as to satisfy Section 107. Even if the kabuliat could be regarded as an instrument creating the lease, there remained two instruments and both were required to be signed by both parties under Section 107.
  2. Section 117 exception for agricultural leases:
    • Plaintiffs argued the patta was an agricultural lease and therefore exempt from Section 107. The Court examined the text of the patta (including a recital about "khudkast" land and obligations to cultivate and send polished rice) and the testimony of plaintiff 1 (who admitted there was no khudkasht land in the village).
    • Reading Ex. 3 as a whole, the Court concluded it was a thika lease for the collection of rents rather than a lease for agricultural purposes. The Court relied on the Full Bench decision in Maheshwari Prasad v. Manrajo Kuer to hold such a thika lease is not an agricultural lease within the scope of Section 117.
  3. Whether the thika patta was a mortgage:
    • The Court cited the test articulated in Kesho Prasad Singh v. Chandrika Prasad Singh distinguishing a zarpeshgi lease from one amounting to a mortgage (i.e., whether the lessee's interest continues after expiry until repayment of an advance). The Court examined Ex. 3 for any provision that the thikadar would remain in possession after the term as security for repayment.
    • Ex. 3 expressly contemplated setting off remaining peshgi money in the final year and the mauza coming into the lessor's possession; there was therefore no provision for continued possession as security. Accordingly, the Court concluded Ex. 3 could not be regarded as a mortgage.
  4. Oral lease for one year with delivery of possession (alternative argument):
    • Section 107 allows a lease for one year to be made either by registered instrument or by oral agreement accompanied by delivery of possession. The Court observed that the plaintiffs' pleaded case was that the lease was created by the registered patta; they did not establish an oral agreement.
    • Even if the plaintiffs were permitted to rely on an oral lease, they had to prove delivery of possession. The Court found the plaintiffs' evidence of possession unconvincing due to inconsistencies and circumstances: the patta held by defendant 1 (Ex. A) remained with him after the alleged surrender of possession; the plaintiffs' dates and the patta date did not align clearly; and the Subordinate Judge's acceptance of plaintiffs' possession was not supported by a clear definite finding.
    • Consequently, the Court held plaintiffs failed to prove oral lease accompanied by delivery of possession and therefore could not rely on the one-year oral-lease exception in Section 107.
  5. The alleged Rs. 100 payment (second point argued by appellant):
    • The Court examined competing account documents (Ex. B produced by defendant 1, showing Rs. 208-13-3 paid; Ex. 1 produced by defendant 2 showing Rs. 108-13-3). The Court found evidence of interpolation in Ex. B and no satisfactory explanation from defendant 2 for the discrepancy.
    • The Subordinate Judge disbelieved defendant 1's claim that he paid Rs. 100 more; the High Court agreed with the Subordinate Judge's finding and had no reason to differ.
  6. Overall conclusion from the analysis:
    • Because the plaintiffs failed to establish a valid lease under the registered patta (due to the Section 107 execution defect and failure to fit within the Section 117 exception), and because they failed to prove an oral lease with delivery of possession, the plaintiffs acquired no valid title under the lease allegedly granted by defendant 2.
    • The mere support of defendant 2 for the plaintiffs' claim did not confer title on the plaintiffs; to eject defendant 1 they had to prove their own title, which they did not.

Holding and Implications

Holding:

Appeal allowed; the suit is dismissed.

Additional operative directives and immediate consequences:

  • The High Court allowed the appeal brought by defendant 1 and dismissed the plaintiffs' suit for possession and mesne profits.
  • The decree previously passed by the learned District Judge (which had affirmed the Subordinate Judge) is to be set aside as having been passed without jurisdiction (because the present appeal was treated as a first appeal following re-valuation).
  • No order as to costs was made by the High Court.

Implications beyond the parties: The opinion applied existing statutory rules (Sections 107 and 117 of the Transfer of Property Act) and pre-existing case law to the facts; the Court did not purport to create or announce a new legal principle beyond the application of those authorities. The direct effect is the dismissal of the plaintiffs' suit and the setting aside of the District Judge's decree as without jurisdiction.


This summary is drawn exclusively from the provided opinion text and does not add or infer facts beyond what is contained in that opinion.

    Budhan Mahton v. Ramanugrah Singh

    Chatterji, J.:— This appeal, which is by defendant 1, was originally presented as a second appeal from the decision of the learned District Judge of Patna confirming the decision of the learned Subordinate Judge, 2nd Court, Patna. The appeal was valued at Rs. 2929-1-11 which was the value of the suit and also of the appeal before the District Judge. The stamp-reporter of this Court was of opinion that the suit as well as the appeal to this Court should have been valued at Rs. 7679-1-11. His report was accepted and the appeal was valued at Rs. 7679-1-11. The valuation of the suit was also similarly amended, and the plaintiffs-respondents paid the deficit court-fee on the plaint. The appeal was accordingly treated as a first appeal, ignoring the decision of the District Judge which must be deemed to have been passed without jurisdiction.

    2. The suit was brought by the plaintiffs for recovery of possession of 9 annas share of village Jalalpur Paindapur and for recovery of Rs. 2279-1-H as mesne profits, or, in the alternative, as damages. The plaintiffs claimed title to the disputed 9 annas share under a thika lease dated 28-6-1940 granted to them by defendant 2 at an annual jama of Rs. 650 for the period from the beginning of 1348 to 1854 Fasli. The disputed 9 annas share had previously been given by defendant 2 in zarpeshgi lease to defendant 1 under a patta dated 13-10-1939 for the period 1341 to 1347 Fasli. The plaintiffs' case was that the lease of defendant 1 came to an end in 1347 and he gave up possession of the disputed property, and that the plaintiffs came in possession under the lease dated 28-6-1940 granted to them by defendant 2, but subsequently as a result of a proceeding under Section 144 of the Cr PC, defendant 1 dispossessed the plaintiffs from the disputed property on 12-3-1941. As in the course of the proceeding under S. 144 defendant 1 claimed that Rs. 100 was still due to him from defendant 2 on account of the zarpeshgi money, the plaintiffs deposited the sum of Rs. 100 in favour of defendant 1 under Section 83 of the Transfer of Property Act, on 30-5-1941. The plaintiffs then brought the present suit on 13-6-1941.

    3. The suit was contested by defendant 1 on the grounds, inter alia, that the plaintiffs never came in possession of the disputed property, that at the time of wasilbaqi on 28th Jeth 1347 defendant 2 demanded from defendant 1 Rs. 100 more besides Rs. 108-13-3 due to him, that defendant 1 paid this amount to defendant 2 and was allowed to continue in possession of the disputed property, and that the plaintiffs acquired no valid title under their alleged lease. Defendant 2 filed a written statement supporting the claim of the plaintiffs.

    4. The learned Subordinate Judge who tried the suit held that the plaintiffs acquired a valid title to the disputed property under the lease dated 28-6-1940, and that defendant 1 had no right to remain in possession, his dues having been paid off. The Subordinate Judge accordingly decreed the suit in these terms:

    “Plaintiffs are declared to be the thieadars of the property in question and they are to recover possession of it. The amount of mesne profits to which they may be entitled will be ascertained in a subsequent proceeding.”

    5. The first point argued by Mr. Nawal Kishore Prasad No. 1 is that the plaintiffs' lease is not valid inasmuch as it contravenes the following provision of Section 107 of the Transfer of Property Act:

    “Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee.”

    6. The plaintiffs obtained a registered patta dated 28-6-1940 from defendant 2 and executed in favour of the latter a registered kabuliat on the same day. The patta was executed by defendant 2 alone, while the kabuliat was executed by the plaintiffs only. The lease, of course, was created by the patta, and this instrument should have been executed by both the lessor and the lessee. This not having been done, there is no valid lease created in view of the aforesaid provision of Section 107.

    7. It is argued by Mr. Dasu Sinha on behalf of the plaintiffs respondents that as the patta was executed by defendant 2 and the kabuliat by the plaintiffs, these two instruments must be treated as one, in which case the requirements of the aforesaid provision of S. 107 must be taken to have been satisfied. I am unable to accept this contention. Even assuming that the kabuliat may be regarded as an instrument creating the lease, there were un-doubtedly two instruments, namely, the patta and the kabuliat by which the lease was created, and according to the aforesaid provision of S. 107, both these instruments were required to be signed by both the lessor and the lessee.

    8. It is also contended by Mr. Dasu Sinha that the plaintiff's lease is an agricultural lease, and, therefore by reason of Section 117 of the Transfer of Property Act, this lease will be exempted from the operation of S. 107 of the Act. The contention that the lease is an agricultural lease is sought to be supported by the following recital in the patta. Ex. 3:

    “18 bighas and 15 kathas of khudkast land belongs to me, the declarant in the said mauza. The thikadars should themselves make arrangement for its cultivation and send polished rice to me the declarant.”

    9. It is said that the thikadars were given the right to cultivate the khudkast lands, and, therefore, the lease was for agricultural purposes. But plaintiff 1 (P.W 1) admitted in his evidence: “There is no khudkasht land in the village”. The patta Ex. 3 itself recites “The thikadars will have no right of enhancing the rent of the khudkasht land.” The patta ex. 3, read as a whole, seems to be a thika lease for the collection of rents. Such a lease has been held by a Full Bench of this Court in [Maheshwari Prasad v. Manrajo Kuer*] 23 Pat. 1851 to be a lease not for agricultural purposes. Mr. Dasu Sinha relies on the decision of this Court in [Sri Ram Chandra Naik v. Ajodhya Singh] 15 Pat. 82 in which a lease which was for collection of agricultural rents and also gave the lessee the right to cultivate lands was held to be an agricultural lease governed by the Tenancy Act; but this was considered in the said subsequent Full Bench case.

    10. It is further suggested by Mr. Dasu Sinha that the thika patta Ex. 3 is really not a lease but a mortgage. The distinction between a zarpeshgi which amounts to a lease and a zarpeshgi which amounts to a mortgage was pointed out by Dawsan-Miller, C.J sitting with Mullick, J., in [Kesho Prasad Singh v. Chand rika Prasad Singh] 2 Pat. 2173 in the following words:

    “In a zarpeshgi lease properly so called there is an advance to the lessor in consideration of which the lessee is given possession of the land for a term during which he recoups himself for the sum advanced and interest out of the profits of the land of which he is put in possession. There is no question of redemption upon paying off an advance. The lease terminates at the expiration of the term and the lessor may re-enter as on the termination of any other lease. The re-entry does not depend upon the repayment of the advance nor can the property be held after the determination of the lease to secure repayment as there is nothing to repay. The transaction is-really one in which rent is paid in a lump sum in advance instead of by instalments during the term. Where, however, the interest created in the lessee continues after the expiration of the term until the advance which is essentially a loan and not an advance of rent, is repaid, the transaction, in my opinion, has the essential characteristics of a mortgage.”

    11. In the present case there is no provision in the thika patta Ex. 3 which gives the thikadar the right to remain in possession after the expiry of the period of the thika until the repayment of the peshgi money. On the contrary, the patta Ex. 3 recites:

    “the remaining peshgi money which will be found due in the final year will be set off towards the rent in the final year and the said mauza will come in my sir possession.”

    12. Nor is there any provision in this patta to suggest that the thikadar was to remain in possession of the property as security for repayment of the advance made by him. In the circumstances, this thika patta cannot be regarded as a mortgage.

    13. Lastly, it is urged by Mr. Dasu Sinha that even though the patta Ex. 3 may not create a valid lease, the lease may be operative as a lease for one year, inasmuch as it was accompanied by delivery of possession. According to Section 107 of the Transfer of Property Act, a lease for one year may be made.

    “either by a registered instrument or by oral agreement accompanied by delivery of possession.”

    14. The argument of Mr. Dasu Sinha cannot succeed, unless it be held that the lease was created by oral agreement accompanied by delivery of possession. The plaintiffs never made out a case that the lease was created by an oral agreement. Their definite case was that the lease was created by the registered patta Ex. 3.

    15. Even assuming that the plaintiffs may be allowed to make out a case that the lease was created by an oral agreement, it must be proved that it was accompanied by delivery of possession. On the question of possession, the learned Subordinate Judge appears to have accepted the plaintiffs' case, though he does not give a clear and definite finding, because he says:

    “But if the question of possession and dispossession of the plaintiffs is to be decided, I see no reason to disbelieve their case.”

    16. It seems to me that the evidence adduced by the plaintiffs to prove that they were put in possession is not convincing. The evidence of plaintiff 1 (P.W 1) is that he came in possession of the property on 5th or 6th Asarh 1347. The thika patta Ex. 3 is dated 28-6-1940 which corresponds to 9th Asarh 1347. Admittedly there was a proceeding under S. 144 as a result of which defendant 1 is said to have dispossessed the plaintiffs on 12-3-1941. Defendant 1, who had admittedly the zarpeshgi lease of the property up to 1347, claimed to have continued in possession with the result that there was a proceeding under S. 144. The plaintiffs' evidence is that defendant 1 gave up possession on the expiry of the lease. If defendant 1 had actually given up possession, defendant 2 would have been expected to take back the patta of defendant 1 from him. But this patta Ex. A remained with defendant 1 and was produced by him in Court. The explanation given by defendant 2 is that defendant 1 told him that the patta was missing. The learned Subordinate Judge thinks that:

    “the retention of the Patta (Ex. A) by defendant 1 was a clever device on his part in order to put pressure on defendant 2 to reduce the jama, and to dissuade any body else from taking thicca of the property in question against his wishes.”

    17. If that is so, it does not seem likely that defendant 1 would quietly give up possession of the property. Considering the evidence and the circumstances, I am not convinced that the plaintiffs were put in possession of the property. Consequently, the plaintiffs cannot claim to have acquired a valid oral lease for one year.

    18. It follows that the plaintiffs acquired no valid title under the lease said to have been granted by defendant 2.

    19. It is argued that the plaintiffs' claim is supported by the lessor defendant 2, and defendant 1 being in possession without any title, the plaintiffs are entitled to recover possession from him. If the plaintiffs have not got any valid lease from defendant 2, the plaintiffs have got no title, and the mere fact that their claim is supported by defendant 2, does not confer on them any title. The defendant 1 may be in possession without any title, but the plaintiffs, in order that they may eject defendant 1, must prove their own title. In the view I take, it is unnecessary to deal with the second point raised by Mr. Nawal Kishore Prasad No. 1, namely, that defendant 1 was allowed to continue in possession, because he advanced Rs. 100 to defendant 2. However, as the point has been argued, it is better that I should record my finding. The evidence of defendant 1 is that at the time of the final wasilbaqi in Jeth 1347 defendant 2, demanded from him Rs. 100, more besides the amount due on account of the peshgi money, and that he paid the additional sum of Rs. 100. Admittedly, two sets of accounts were prepared at the time, one of which was Bigned by defendant 1 and kept by defendant 2, and the other signed by defendant 2, and kept by defendant 1. In the account Ex. B produced by defendant 1 there is an entry that Rs. 100 were paid besides Rs. 108-13-3 which was the amount due to defendant 2 on account of the peshgi money. In other words, the account Ex. B shows that the total amount paid to defendant 2 was Rs. 208-13-3. But the corresponding account Ex. 1 signed by defendant 1 and kept by defen-dant 2 and produced by the latter in Court shows that the amount paid was Rs. 108-13-3. The learned Subordinate Judge has found that in the account Ex. B Rs. 108-13-3 has been altered to Rs. 208-13-3. There is no satisfactory explanation offered by defendant 2 as to why in account Ex. 1 signed by him the amount entered was Rs. 108-13-3 and not Rs. 209-13-3. This fact by it self is sufficient to show that there must have been an interpolation in the entry in the account Ex. B which shows that the amount paid was Rs. 208-13-3. The learned Subordinate Judge has given other reasons also for disbelieving the evidence of defendant 1 that he paid Rs. 100 more to defendant 2. I have no reason to differ from the view taken by the Subordinate Judge.

    20. In the result, I would allow the, appeal and dismiss the suit, but, in the circumstances, 1 would make no order as to costs.

    21. It should be noted that the decree passed by the learned District Judge in the appeal that was filed in his Court should be set aside as being passed without jurisdiction.

    Pande, J.:— I agree.

    D.R/D.H

    22. Appeal allowed.

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    Comments

    Budhan Mahton v. Ramanugrah Singh
    (Mar 15, 1945)