JUDGMENT

The plaintiff who is the owner of the house “Riversdale”, Higgins Road, Ootcamund situated on a land with an extent of 23 cents, and with plinth area of 4000 sq. ft. has filed this suit for recovery of Rs. 1,87,500/- by way of damages from the defendant-Indian Bank, a body Corporate which has been impleaded thrice as being represented by its Branch, Manager Ooty, the Regional Manager, Coimbatore and the Assistant General Manager (Premises Department) Madras. Damages claimed are for the “discontinuance of the tenancy in violation and contravention of the solemn covenant of the lease for a fixed period”. The plaintiff has also claimed interest on the said sum and costs of the suit.

2. The plaint averments are that the plaintiff was approached by the defendant for the lease of the plaintiff's building to the defendant for its use as ‘holiday home’ for its employees and that after discussions with the General Manager of the Bank, it was agreed that there will be a lease of the building to the defendant “for a certain period of five years with an option for renewal for two years with 10% increase in rent”. The amount to be paid each month was Rs. 7500/- out of which Rs. 3000/- was towards rent and Rs. 4500/- was towards amenities including for caretaker and maintenance.

3. The terms of the lease according to the plaintiff, were incorporated in the defendant's sanction letter dated 9.6.1987 which was an interoffice memo, issued by the Head Office of the Premises Department to the Ooty office of the Bank. This document has been marked as Ex. P1 and constitutes the foundation of the plaintiff's case.

4. The plaintiff has further pleaded that the defendant, contrary to the commitment to remain in the plaintiff's premises as lessees for a fixed period of five years, prematurely terminated the tenancy by their notice dated 23.11.89, which has been marked as Ex. P10 whereby the defendants/bank intimated the plaintiff that it would be vacating the premises on 28.2.90 By the said letter, the plaintiff was also asked to adjust the sum of Rs. 22,500/- which had been paid by the defendants as advance at the time of taking the premises on lease, towards the rents payable for those three months.

5. The plaintiff having protested against the defendant's termination of the lease, the defendants wrote to the plaintiff on 23.12.89, which letter has been marked as Ex. P12, informing the plaintiff that the plaintiff had failed to provide several amenities in breach of the obligations undertaken by the plaintiff at the time the sanction order was issued. By that letter, the plaintiff was also informed that though the execution of the lease deed had been contemplated, no such lease deed had been executed and the tenancy was therefore a monthly tenancy which could be terminated by either party by giving notice. The plaintiff replied to that letter denying the allegation that he had failed to provide amenities and asserting that the defendants would be liable to the plaintiff for the non-compliance with their sanction order dated 9.6.1987

6. The suit was filed by the plaintiff on 5.2.1990 before the expiry of the period of the notice given by the defendant. It has been averred that the plaintiff was entitled to damages in a sum of Rs. 2,10,000/- being the equivalent of the amounts payable under the sanction order at the rate of Rs. 7500/- for 28 months on the ground that “the defendants are bound in law to compensate the plaintiff, by way of damages the sum of money the plaintiff is likely to lose by way of lease amount from 28.2.1990 to 15.6.1992”. From the sum of Rs. 2,10,000/- so calculated, the plaintiff has stated, that the plaintiff is adjusting the advance deposit of Rs. 22,500/- which had been paid by the defendant and after such adjustment, the amount due and payable by the defendants to the plaintiff was Rs. 1,87,500/- It is not in dispute that the defendant has paid to the plaintiff the agreed monthly payments till the date they vacated the premises.

7. Shortly after the suit was filed, the plaintiff took possession of the house and the receipt given by him on 13.3.90 confirming the receipt of the keys of the premises, has been marked as Ex. P13. The plaintiff has recorded therein that he has taken possession of the premises without prejudice to his rights in this suit and the application filed by him. There is also a note in that letter that the furniture and fittings are in a damaged condition.

8. The plaintiff had also advertised in “The Hindu” on 28.1.1990 before filing this suit about this premises being available for hire in furnished condition from 28.2.1990 A copy of the advertisement has been produced and marked as Ex. P15.

9. The defendant Indian Bank in its written statement has denied the allegations of the plaintiff and asserted that a lease deed not having been executed and registered and the sanction order also not being a registered document, there was no lease of the premises for a fixed period of five years and the tenancy was a monthly tenancy which the defendant was entitled to terminate by giving notice, which has been duly given. The defendants have also reiterated that the plaintiff has failed to perform his obligations of providing proper furniture and fittings as also the amenities undertaken to be provided by him at the time the Bank agreed to take the building on lease.

10. On the above pleadings the following issues were framed:—

1. Whether this Hon'ble Court has no jurisdiction to entertain the suit?

2. Whether the third defendant is a proper and necessary party to the suit?

3. Whether the defendant's decision to vacate the premises leased out is as a result of the alleged failure of the plaintiff to perform his obligations under the sanction order dated 9.6.87?

4. Whether the period of five years of lease stipulated under the sanction order dated 9.6.87 depended upon the plaintiff's providing the alleged amenities?

5. Whether the plaintiff has failed to provide the amenities and if so, whether the defendant has made demand for compliance?

6. Whether the defendant is entitled to unilaterally determine the lease prematurely?

7. Whether the sanction order dated 9.6.87 is dependent on any other obligation on the part of the plaintiff to be performed?

8. Whether the non-execution of tenancy agreement disentitles the plaintiff to claim damages under Tenancy Protection Act?

9. Whether the plaintiff is entitled to the damages as prayed for?

10. Whether the plaintiff carried out the amenities as required by the defendant's bank contained in the sanction order dt. 9.6.87?

11. Whether without registration as required under Sec. 107 of the Transfer of Property Act, the lease is only a monthly lease terminable by 15 days' notice under Section 111 of the Transfer of Property Act?

12. Whether the plaintiff is entitled to recover Rs. 1,87,500/- by way of damages from the defendant?

13. To what reliefs are the parties entitled to?

11. As the very foundation of the plaintiff's claim is that the defendant had prematurely terminated the subsisting lease which according to the plaintiff, was for a fixed period of five years from 15.6.1987, it is necessary to first examine as to whether the plaintiff has established that there was a fixed tenancy for a period of five years. The plaintiff will not be entitled to any relief in this suit if it were to be held that there was no subsisting lease for a fixed period of five years as alleged by him in the plaint. This case has been argued by the learned counsel for the defendant on the footing that the plaintiff should succeed or fail in the suit depending upon the finding to be given on this issue. Issue No. 11 is therefore taken up for consideration first.

12. The documents on which the plaintiff relies to show that there was a lease for a fixed term of five years is Ex. P1, the sanction order issued by the Premises Department of the defendant bank to its Ooty office. A copy of the document is marked by consent. However, the question of admissibility of this document in evidence to prove the lease has now to be considered, and the plaintiff's success or failure in this suit depends upon the admissibility or otherwise of this document as evidence.

13. Ex. P1 is, as stated earlier, a sanction order given by the Head Office to the defendant bank to its Ooty branch. The terms of the sanction are set out in that order. Besides giving the name and address of the owner and the area of the premises as also the rent and care-taker charges to be paid, the sanction order also includes the term relating to the advance that may be paid to the owner and the period of lease which has been extracted earlier. The sanction order also contains items (a) to (n) under the heading ‘other terms and contitions’ the obligations of the owner, regarding the amenities to be provided for the premises, its maintenance, etc. Item ‘m’ provides that all expenses towards registration of lease deed including stamp and registration charges will be borne by the bank.

14. This sanction order was not communicated to the plaintiff directly by the head office of the bank but a copy of that sanction order, as stated by the plaintiff in his evidence, and as also borne out by the letter from the Branch Manager, Ooty dated 13.6.87 which has been marked as Ex. P13, was sent to the plaintiff while he was at Ooty. That execution of a lease deed was contemplated is evident from item ‘m’ in the sanction order as also from the plaintiff's letter, Ex. P4 dt. 18.6.87 wherein, the plaintiff has stated “lease deed will be executed in due course by the Bank at its cost” and Ex. P5 dt. 30.6.87, sent by the plaintiff wherein he has stated “I would request to send a draft lease deed for my approval before finalising the same and fix a date for registration as suggested in my letter, dt. 18.6.87 cited above”. For the reasons best known to the parties, the lease deed was not executed and the plaintiff also apparently did not insist upon the lease deed being executed by the defendant.

15. Mr. P.N Narasimhan, learned counsel for the plaintiff, contends that even though, this Ex. P1 is not a registered document, nevertheless the plaintiff is entitled to rely upon the same for the period of lease as mentioned therein and claim damage from the defendants for premature termination of its tenancy, the termination being premature by reason of the defendant having put an end to the tenancy before the expiry of the period of five years from 15.6.1987

16. Mr. M.V Krishnan, learned counsel for the defendant, on the other hand forcefully submitted that it is not open to the plaintiff to contend that there was present demise under Ex. P1 and that the term of the said demise was breached by the defendant's termination of lease, as a lease for a period exceeding twelve months can only be by a registered instrument, and in the absence of any such registered document, there can be no lease for a term exceeding one year and the tenancy in this case is therefore, a monthly tenancy which could be terminated by either party by a notice to other. The learned counsel for the defendants relied on Sections 106, 107 and 111 of the Transfer of Property Act and Section 49 of the Indian Registration Act.

17. Section 49 of the Indian Registration Act reads as follows:

“No document required by section 17 or by any provision of the transfer of Property Act, 1882 to be registered shall:

(a) affect any immovable property comprised therein or

(b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power unless it has been registered.

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 a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882 or as evidence of any collateral transaction not required to be effected by registered instrument.”

18. Section 49(c) thus prohibits receiving in evidence any document required under the provision of Transfer of Property Act to be registered, as evidence of any transaction affecting immovable property. The proviso makes three exceptions:— Such unregistered document may be received (1) as evidence of contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, (2) as evidence of part of performance of a contract for the purposes of Section 53-A of the Transfer of Property Act, and (3) as evidence of any collateral transaction not required to be effected by registered instrument.

19. The document in question herein is one which contains the terms of lease of immovable property for a period exceeding one year, the term specified in the document being five years. The present suit is not one for specific performance of the agreement to lease. This document is also not being tendered as evidence of part performance of contract for the purposes of Section 53-A of the Transfer of Property Act. The only exception under which it is sought to be brought by the plaintiff is that it is evidence of collateral transaction not required to be effected by registered instrument.

20. The plaintiff in this case is seeking to claim damages from the defendants on the ground that the defendants committed breach of term regarding the period of lease being 5 years. The term, breach of which is complained, is clearly one which is required to be effected by registered instrument. Such a term cannot by any means be regarded as collateral transaction. The very foundation of the plaintiff's suit is thus based upon a transaction which was required to be effected by a registered instrument but has not been so effected.

21. Section 49 of the Indian Registration Act thus clearly precludes the plaintiff from relying on this unregistered document as evidence of transaction of lease for a period of five years and from seeking to recover damages from the defendant on the ground that the period so specified had not been adhered to by the defendant.

22. Section 107 of the Transfer of Property Act provided that a lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. The unregistered document relied upon by the plaintiff to prove that the document though unregistered should be looked into for ascertaining the period of the lease for the purpose of deciding whether the plaintiff is entitled to damages by reason of the breach on the part of the defendant in adhering to the period of the lease, is clearly an untenable plea and has no foundation in law.

23. Sri. P.N Narasimhan learned counsel for the plaintiff however strongly relied on a Judgment of the Full Bench of this Court in the case of Muruga Mudaliar (deceased) and others v. Subba Reddiar (1950) 2 M.L.J 818 = 64 L.W 18 (F.B) in support of his submission that an agreement of lease in writing which is required to be registered but unregistered may be used as evidence of the agreement of lease in a suit for damages for its breach. This decision is not of any assistance to the plaintiff. Although the head note in the report sets out the proposition as stated by the learned counsel for the plaintiff, it is clear from a perusal of the Judgment of Satyanarayana Rao, J, who delivered the majority judgment with which Rajamannar, C.J concurred, that what was held therein was only that the beneficiary of an agreement of lease may seek damages from the other party to the agreement for having failed to fulfil that agreement by non-leasing out the property. This is clear from the observations of the learned judge at page 826 of the Report that:

“In the present case the plaintiff is not seeking to establish a “transaction affecting immovable property”, for he is not seeking to prove a present demise of the land. He is no doubt asking that the document be received in evidence. The reception of the document in evidence in my Judgment, is not prohibited by Sub clause (c). What one has to see under the clause is to consider what is it that he is seeking to establish in evidence by using the document. Is he attempting to prove by the document a “transaction affecting immovable property. In other words, is he seeking to prove a present demise of the property or lease of the property? That is not the object of the plaintiff in the present case. The object is to establish an agreement to lease the property which was broken by the defendant. He is in no way attempting to show that an interest in immovable property is created by a present demise of the land. Proof of a mere agreement to lease, if one remembers the distinction drawn by the Privy Council in Hemantha Kumari's case, between agreements which merely enable a person to obtain a lease in future and agreements which operate to create a present demise, or an immediate interest in land, is not prohibited. The former agreement is not a transaction affecting immovable property. The agreement, therefore, in such a case is not hit at by Cl. (c) of Sec. 49, as a mere agreement to lease without more does not create ay interest in immovable property.

24. The plaintiff here is relying upon Ex. P.1 as a present demise for a fixed term of five years. Unless it is first established that there was a lease for five years, no claim for damages on the ground of premature termination of the lease will lie.

25. Learned counsel for the defendant relied upon the decision of the Supreme Court in the case of Bajaj Auto Limited v. Behla-d Lal Khohli, 1989 S.C 1806 wherein the Court held

“if a document inadmissible for want of unregistration, all its terms were inadmissible including the one dealing with the landlord's permission to his tenant to sublet”

26. In the case of Satish Chand v. Goverdhan Das AIR 1984 S.C 143, the Court while considering the admissibility of an unregistered document as evidence of lease for a term of nine years, held at para 6 “The document Ex. B.2 was admissable under the proviso to S. 49 of the Registration Act only for the collateral purpose of providing the nature and character of possession of the defendants. The proviso to Section 49 was however not applicable in the present case in as much as the terms of the lease are not a “collateral purpose” within its meaning. It follows that the unregistered draft lease agreement Ex. B.2 was inadmissable in evidence to prove the transaction of lease. It was also ineffective to create a valid lease for a renewed term of nine years for want of registration as required under Section 17(1)(d) of the Registration Act.”

27. Learned counsel for the defendant also referred to several rulings of this court and other High Courts reported in 1983 Cal. 389, 1952 (I) MLJ 937, 1965 (II) MLJ 308, 78 L.W 479; AIR 1994 A11, 221. It is however unnecessary to advert to them in view of the decisions of the Supreme Court referred to above.

28. In the light of the statutory provisions and the clear enunciation of law by the Apex Court, it is futile for the plaintiff to contend that this sanction order Ex. P.1 is admissable as evidence of lease for five years for the purpose of enabling the plaintiff to claim damages for its premature termination. Ex. P.1 may be looked into to ascertain the nature and character of the defendants possession, but is inadmissable as evidence of lease for a fixed term of five years.

29. The plaintiff has also relied on Ex. P.8, a letter written by the defendant to the Municipal Authorities and Ex. P.9 another letter written by the defendant to Citi Bank wherein the period of lease is mentioned as five years. The defendant's case is that these letters were sent at the instance of the plaintiff. These letters however are equally inadmissible as evidence of lease for five years, for want of registration.

30. The defendant's tenancy therefore is deemed to be a lease from month to month terminable, on the part of either lessor or lessee, by fifteen days notice, as provided in S. 106 of the Transfer of Property Act. The defendant admittedly had given notice of termination by its letter dt. 23.11.89 whereby they intimated the plaintiff that they would vacate on 28.2.1990, which is marked as Ex. P.10 The plaintiff has also acted on that notice by advertising in the newspaper marked as Ex. P.15 that the premises would be available to prospective tenants from 28.2.1990 The plaintiff has confirmed his resuming possession of the premises by his letter dt. 13.3.90 marked as Ex. P. 14. The defendant's tenancy has thus been determined in accordance with S. 111 (h) of the Transfer of Property Act.

31. The oral testimony of the plaintiff who has examined himself as P.W 1 is of no avail to establish his right to claim damages for premature termination of a lease for five years which is not evidenced by a registered deed.

32. As the tenancy was a monthly tenancy and the same was duly determined by the defendant, the plaintiff is not entitled to claim damages for premature termination and is not entitled to all or any part of the amount claimed in the suit.

33. As regards the other issues framed, I would hold on issue 1 that this court has jurisdiction to entertain this suit as part of the cause of action has arisen in Madras, and the defendant Bank has its head office at Madras. Regarding issue 2, the legal entity being only one, impleading the same entity through three different officers was entirely superfluous. It was however appropriate for the plaintiff to implead the defendant by its appropriate personnel at its Head Office, and the third defendant is not only a proper party, but should have been impleaded as the sole defendant.

34. Regarding issues 3, 5 and 10 which deal with the amenities provided by the plaintiff, DW1 has stated that the amenities provided by the plaintiff were not adequate and the furniture and fittings were of poor quality resulting in complaints from the officers, and their families for whose use as a holiday home, the building had been taken on lease, and that therefore the defendant terminated the tenancy. Regarding the amenities and furniture the sanction order does not specify the quality or size of the Geyser or of the furniture. The required numbers of these items had been provided by the defendants. The defendants continued their occupation for over two and half years and the list of items allegedly not supplied by the defendant was given to him for the first time after the notice of termination was given. If has therefore to be held that though the defendant's dissatisfaction with the quality of the amenities provided may be genuine, the plaintiff had not failed to perform his obligations set out in the sanction order Ex. P. 1. The answer to these issues 3 and 5 has therefore to be held in the negative and the answer to issue 10 in the affirmative.

35. The sanction order itself not being a lease, and the document being unregistered there was no lease for a fixed term of five years. Issue No. 4 therefore does not survive. The tenancy being a monthly tenancy it was open to the defendant to determine the lease. The lease was not determined prematurely. Issue 6 as framed does not arise as the lease was not for a fixed period. The answer to issue 7 is that the sanction order stipulated conditions which were meant to be observed by the plaintiff. No argument was addressed regarding issue 8.

36. The answer to issues 9, 12 and 13 is that the plaintiff is not entitled to any damages.

37. The plaintiff's suit therefore fails and is dismissed. The parties however shall bear their respective costs.

RR/VCS