Om Parkash Chawla v. The Union Of India .

Harbans, C.J:— This is a revision filed against an order of the District Judge, Chandigarh, confirming that of the trial Court whereby the suit filed by Om Parkash Chawla, petitioner before me, against the Union of India through the Secretary to Government of India, Ministry of Defence, for recovery of sum of money being the arrears of rent of the house in question given on lease through the Garrison Engineer, Chandigarh, was stayed in view of the provisions of section 34 of the Arbitration Act, 1940.

2. The facts giving rise to the dispute between the parties may be briefly stated. The petitioner-plaintiff is the owner of house No. 1100 in Sector 19-B, Chandigarh. By an agreement, dated 6th of May, 1953, ground floor thereof was given on lease by Om Parkash Chawla to the Garrison Engineer on the basis of monthly tenancy with effect from 30th of October, 1962. Subsequently a letter was written by the Garrison Engineer agreeing to the enhancement of the rent from the original figure of Rs. 85/- to Rs. 135/- per month on the condition that the annual repairs were carried out by the landlord. We are not concerned in this case as to what actually was done in this connection. More than a year thereafter, another letter was received by the landlord to, the effect that the enhancement of the rent may be treated as cancelled.

3. Consequently a suit was brought by the landlord for the recovery of the rent at the enhanced rate after giving allowance for the rent already paid. One of the objections taken was that under the terms of the lease, all disputes arising out of the same were to be referred to an arbitrator who was to be an officer of the Department. Before the trial Court it was agreed that the document purporting to be the lease deed was in admissible in evidence not having been registered. Both the Courts below, however, came to the conclusion that so far as the arbitration term in the deed is concerned, that would be a collateral matter for which the document can be looked at, and that term can be enforced. The order of the trial Count staying the suit in terms of section 34 of the Arbitration Act was confirmed by the District Judge, and hence this revision petition.

4. There can be no manner of doubt that the document in question can be admissible in evidence only if it falls within the last part of the proviso to section 49 of the Indian Registration Act, 1908, which rues as follows:—

“Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received …….. as evidence of any collateral transaction not required to be effected by registered instrument”

5. I have no doubt in my mind that like the period of lease, the rate ‘of rent agreed upon, the terms regarding repairs of the building and the renewal of the lease, the method of settlement of disputes forms an integral pert of the lease, and none of the terms of the lease can be treated to be a collateral transaction. On the last hearing when this case came up before me, it was adjourned to enable the learned counsel for the respondent to make a research and to bring before me any case wherein the terms of a lease have been treated to be collateral transaction. The other purpose for which the case was adjourned was to enable him to find out from the Department if the matter can be amicably settled. The learned counsel has, however stated that the departmental authorities at Chandigarh find it difficult and are not in a position to enter into any compromise. I have therefore, heard the learned counsel with regard to the law point.

6. A number of authorities have been cited before me by the learned counsel for the respondent, but none of them is, to my mind, to the point. In V.H Deshpande v. R.D Deshpande . AIR 1942 Bom. 268. only a general statement was made that a collateral purpose would be any purpose other than the one of creating, declaring assigning, limiting or extinguishing a right to immovable property. This is just reproducing the provision of law, and the question still remains whether one of the terms of the lease deed can be separated from the others and treated as a collateral transaction. The other rulings cited by the learned counsel were— Shankri v. Milkha Singh . AIR 1941 Lah. 407, FB., head-note(h), Anta'ji v. Datta'ji . ILR 1895 19 Bom. 36. Komar gowda v. Bhimaji . ILR 1899 23 Bom. 602. Karnam Parthasarathy v. Karnam Barthamme . 16 IC Mad. 881. and Venkata Krishnarao v. G. Appalaswamy,6. I find that none of these cases is to the point and the facts of each one of these cases can be distinguished. In the Full Bench case all that was stated was that if a person gets into possession on the basis of a document which required registration he could show that he was in possession under an agreement of sale and that the agreement of sale which was oral was not subsequently rescinded. This would not amount to proving any terms of the sale. In I.L.R (1895) 19 Bom. 36, a mortgage was redeemed and thereafter a letter was issued attorning to the mortgagors and acknowledging the redemption. It was held that it was in admissible for proving redemption but could be taken into consideration for proving attornment. Here an attornment had absolutely, nothing to do with the redemption and therefore, would be a collateral transaction. In I.L.R (1899) 23 Bom. 602, a document had been executed by which a person agreed to perform mutaliki services in lieu of grant of certain lands, and the document relied upon was held to be not compulsorily registrable and, therefore, this decision can be of no help. In 16 I.C 881 (Madras), while acknowledging ownership under a prior conveyance, the convenantor agreed to pay a certain annuity to another and in the event of default to relinquish his ownership to the property. It was held that this document could be enforced for payment of annuity and for its specific performance, but the document being unregistered no suit could be maintained on it for possession. I feel that the facts of this case were entirely different. In A.I.R 1957 A.P 845, a document was considered to be admissible for proving that an offence of bribery was committed. This again obviously has no bearing on the point before me.

7. In view of the above, I feel that the term with regard, to arbitration, being an integral part of the lease deed, cannot be treated as collateral transaction, and the Courts below were in error in enforcing, this term and staying the suit. I, therefore, accept this petition, set aside the orders of the Courts below, and remand the case to the trial Court for proceeding with it in accordance with law. The petitioner will have his costs from the opposite party for the proceedings taken up to this time. Counsel will direct the parties to appear in the trial Court on 8th of March 1971 for further proceedings.

8. Petition accepted.