In the light of the discussion of the legal position as
mentioned above, the conclusion follows that, in the present
case, the lease for any period exceeding one year was
compulsorily registrable document requiring the registration
charges and the stamp duty in accordance with law. The
Court was, no doubt, wrong to admit the document of lease
in to evidence when it was compulsorily registrable
according to the law (supra) in view of the provisions in
Section 55 of the Maharashtra Rent Control Act read along
with Section 17(1) (d) of the Registration Act and further
read along with Section 107 of the Transfer of Property Act.
But then, the document can be taken into consideration for
collateral purposes, as stated above for proving the nature
and character of possession of the tenant and ascertaining
whether the purpose of lease was residential or not and for
ascertaining the commencement of possession, rate of rent
etc. as held by the first Appellate Court.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
SECOND APPEAL NO.201 OF 2013
Mohd. Shakil Mohd. Yunus, Vs Chandrabali Ramai Gupta
DATE : 12.06.2014.
Citation; 2014(5) MHLJ 206
CORAM : A.P.BHANGALE, J.
i) Can the learned lower Appellate Court legally upset the
finding of the learned trial Court dismissing the suit of
the plaintiff on the ground that the impugned lease is for
the period of five years and the same requires
compulsory registration under Section 17 (1) (d) of the
Registration Act in spite of observing that the
unregistered document cannot be admitted for proving
the relationship of Landlord and tenant and duration of
the lease and allow the appeal ?
ii) Is the learned Appellate Court right in law to allow
the appeal relying on the proviso to Section 49 of the
Registration Act that the lease document can be used for
collateral purposes ?
This Second Appeal is filed by the appellant (Original
2.
sa201.13.odt
Defendant) against the Judgment and Order, dated 21.12.2012
passed by District Judge, Akola in Regular Civil Appeal No.94
of 2005, which was allowed and the suit was decreed. The
said appeal arose from the Judgement and Order, dated
29.7.2005 passed by the trial Court (Civil Judge (Jr. Dn.,
Murtizapur) in Regular Civil Suit No.21 of 2004. The suit for
eviction, possession and damages was dismissed by the trial
trial Court.
Court. The parties are referred to by their nomenclature in the
3.
Brief facts are as under :
The plaintiff is owner of Nazul plot nos.28 and 29, sheet
no.26D admeasuring about 100 square feet situated in Tanga
Chowk, Murtizapur. In the year 1998, the defendant was given
the plot on lease for a term of five years under the Lease deed,
dated 29.8.1998. As per the agreement, the plaintiff had
agreed to spend a sum of Rs. 10,000/ for construction of the
shop on the said plot. The defendant had deposited the sum of
Rs. 15,000/ for the said purpose, agreeing to bear expenses
exceeding Rs 10,000/ if spent by the plaintiff for construction
upon the suit plot. Defendant had agreed to vacate the plot
after expiration of the lease term of five years, but did not. The
tenancy stood terminated by efflux of time as also by notice
served upon the defendant by Registered Post A/D. with effect
from 15.10.2003. The defendant also did not pay the rent
from October 2000 to October 2003. The defendant continued
to hold over unlawfully. The defendant admitted the fact that
he had approached the plaintiff and requested him to give the
plot on lease. The defendant denied the suit claim. The trial
Court negatived the suit claim of possession and dismissed the
suit. Ownership of the suit plot with the plaintiff was not
disputed by the defendant. The fact of lease of the suit plot was
not disputed. Only term of the lease was disputed. The
document of lease was unregistered.
4.
The trial Court dismissed the suit after it found that the
plaintiff had failed to prove the requirement of the suit
property for his own (Wife’s) occupation. The plaintiff had
proved that he was responsible for expenses of the
construction done by the defendant on the suit plot to the
extent of Rs. 10,000/ only. The trial Judge held that the
that the tenancy term was for 5 year.
5.
plaintiff failed to prove termination of the tenancy and also
The first Appellate Court reversed the findings of the
trial Court, allowed the appeal and decreed the suit. The
question argued is as to whether the first Appellate Court was
right in invoking the proviso to section 49 of the Registration
Act to hold that the unregistered lease document can be used
for collateral purpose and whether it is justified to reverse the
Judgment and Order passed by the trial Court on the ground
that, in view of Section 17(1) (d) of the Registration Act, the
lease required compulsory registration of the document to
prove the relationship of the Landlord and the Tenant. The
appellant sought to support the Judgment and Order passed by
the trial Court. The first Appellate Court held from the
evidence on record that there was a relationship of lessor and
lessee between the parties and the lease was for a period of
five years and by efflux of time, the lease was terminated on
16.10.2003. The fact that the defendant continued to hold over
and refused to vacate despite notice to vacate from the lessor
would not justify refusal of the relief. Hence the appeal was
6.
allowed.
Mr.L.A.Mohata, learned Counsel for the Appellant
submitted with reference to Section 49 of the Registration Act
collateral purpose.
that the unregistered document could not have been used for a
Mr.A.M.Ghare, learned Counsel for the respondents
7.
urged that the Lease deed in the present case was executory
with effect from 15.10.1998 to 15.10.2003 for the term of five
years and since it was compulsorily registrable, it was
inadmissible in evidence and for this vital flaw, the suit was
rightly dismissed. Unregistered Lease, however according to
Shri Ghare could have been used for the collateral purpose.
8.
Legal position in respect of Lease agreement for a term
exceeding a year may be examined now:
Section 107 of the Transfer of Property Act, 1882
provides the mode by which the contract of tenancy can be
entered into i.e. in which the lease can be made. Section 107
of the T. P. Act reads as under :
"Section 107 Leases how made
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.
All other leases of immovable property may be made
either by a registered instrument or by oral agreement
accompanied by delivery of possession.
Where a lease of immovable 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.
Provided that the State Government may, from time to
time, by notification in the Official Gazette, direct that
leases of immovable property, other than leases from
year to year, or for any term exceeding one year, or
reserving a yearly rent, or any class of such leases, may
9.
be made by unregistered instrument or by oral
agreement without delivery of possession."
A perusal of Section 106 of the Transfer of Property Act
leads a rule of evidence as regards the duration of certain lease
and according to letter and spirit of Section 106 of the T. P. Act,
in the absence of any contract, local law or usage to the
contrary, a lease of immovable properly for any purpose other
than the agriculture or manufacturing purpose, is to be deemed
to be lease from month to month, but so far as lease for
immovable property taken for the agricultural purpose or
manufacturing purpose, these leases are unless there is
anything to the contrary in the contract or local law or the
usage, to be deemed to be leased from year to year. This is a
rule of evidence i.e. all leases of immovable properties are to be
deemed in the eye of law to be month to month and, if any,
person alleges or claims to the contrary i.e. in other words, if
any person alleges or as asserts lease particularly lease to be a
fixed term lease or to be a yearly lease, he has to prove the same
by legal, valid and reliable evidence keeping in view the
provisions of Section 107 of the Transfer of Property Act as well
as the provisions of the Registration Act and the Evidence Act.
So, in the present case, burden did lie on the defendant
10.
to prove the averments of fact made by him in the Written
Statement to the effect that fixed term of the lease was for five
years and the period of lease could be extended at the option
Section 107 of the T. P. Act provides that lease for a
11.
and wish of the lessee.
fixed term or for a term of more than a year or for year to year
or reserving yearly rent can be made only by a registered
instrument while all other leases of immovable property can be
made either by a registered instrument or by oral agreement
accompanied with delivery of possession. Thus, the provisions of
Section 107 of the Transfer of Property Act by use of expression
'only' indicates that the Legislature or the Parliament intended
to prescribe the specific mode for making of the fixed term lease
for more than one year or reserving yearly rent. It is well settled
principle of law as laid down by Supreme Court in the case of
State of U. P. vs. Singhara Singh and Others, reported in AIR
1964 SC 358 as well as by Privy Council in the case of Nazir
Ahamad v. KingEmperor, reported in AIR 1936 PC 253 when
the law prescribes a certain mode or specific mode of or for
doing a thing or certain mode of exercising certain power of
authority or right or for performing certain Act, then that act or
thing has got to be done in that manner alone and not
otherwise. Other modes in respect thereof are necessarily and by
necessary implication taken to have been forbidden and closed.
Apart from these general principles, further use of expression
"only” after the expression “can be made" and before expression
“by a registered instrument" indicates the legislative intent that
legislature has intended that fixed term lease for a period of
more than a year of a lease from year to year or reserving the
yearly rent is to be and can be made in no other manner than by
entering into the contract of tenancy by a registered lease deed.
This being the legal position, there can be no lease for fixed
term for a period more than a year or the like, if the same has
been entered into orally or by some deed which is not registered
one, and in those cases, the presumption about the duration of
lease under Section 106, T.P. Act will apply. (See Allenbury
Engineers Pvt. Ltd. v. Shri Ram Krishna Dalmia and Others, AIR
1973 SC 425 i.e. 1973 (1) SCC 7).
Under the Registration Act, Lease for any term exceeding
one year is compulsorily registrable document.
Section 12. Documents of which registration is compulsory :
(1) The following documents shall be registered, if the property
to which they relate is situated in a district in which, and if
they have been executed on or after the date on which, Act XVI
of 1864, or the Indian Registration Act, 1866, or the Indian
Registration Act, 1871, or the Indian Registration Act, 1877, or
this Act came or comes into force, namely,
(a) Instruments of gift of immovable property;
(b) other nontestamentary instruments which purport or
operate to create, declare, assign, limit or extinguish, whether
in present or in future, any right, title or interest, whether
vested or contingent, of the value of one hundred rupees and
upwards, to or in immovable property;
(c) nontestamentary instruments which acknowledge the
receipt or payment of any consideration on account of the
creation, declaration, assignment, limitation or extinction of
any such right, title or interest; and
(d) Leases of immovable property from year to year, or for any
term exceeding one year, or reserving a yearly rent;
(e) nontestamentary instruments transferring or assigning any
decree or order of a Court or any award when such decree or
order or award purports or operates to create, declare, assign,
limit or extinguish, whether in present or in future, any right,
title or interest, whether vested or contingent, of the value of
one hundred rupees and upwards, to or in immovable
property:
Provided that the State Government may, by order published
in the Official Gazette, exempt from the operation of this sub
section any leases executed in any district, or part of a district,
the terms granted by which do not exceed five years and the
annual rents reserved by which do not exceed fifty
rupees........................................................................
S. 49 of the Registration Act mention the consequence of the
nonregistration of the document
49. Effect of nonregistration of documents required to be
registered
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,
1872, or as evidence of any collateral transaction not
required to be effected by registered instrument.
In Dina Ji and Others vs. Daddi & others reported
12.
in AIR 1990 SC 1153, the Supreme Court had considered the
effect of an unregistered document which is required to be
registered under Section 17 of the Registration Act, 1908 or
under any of the provision under the Transfer of Property Act.
It was observed that such a document will not avail to create,
declare, assign, limit or extinguish any right, title or interest in
or to the immovable property made mention of in the
document. In other words, an unregistered document cannot
be used for the purpose of establishing that the document
created or declared or assigned or limited or extinguished a
right to immovable property. However, trend of the judicial
decisions or trend of judicial opinion is to the effect that
unregistered documents which are compulsorily registrable
under Section 17 of the Registration Act can be looked into
only for collateral purposes. Collateral purpose has a limited
scope and meaning. It is possible to lay down some haphazard
illustrations on the point in the light of judicial
pronouncements.
Purposes which are collateral in nature:
a) For proving the nature and character of possession of the
tenant (Per Satish Chand Mukhan and Others v.
Goverdhandas Byas and Others (AIR 1984 SC 143).
b) For ascertaining whether the purpose of lease was
residential or not. (Per Rai Chand Jain v. Miss Chandra Kanta
Khosla (AIR 1991 SC 744).
c) For ascertaining the commencement of possession, rate of
rent etc. (Per Pieco Electronics and Electricals Ltd. v. Smt.
Tribeni Deve (AIR 1990 Cal. 135).
Purposes which are not collateral:
a) For ascertaining whether the lessee is entitled to create a
sublease or not. (Per M/s.Bajaj Auto Ltd. v. Bahari Lal Kolhi
(AIR 1989 SC 1806).
b) For ascertaining the term of lease. (Per Ishwar Dutt v.
Sunder Singh (AIR 1961 J&K 45).
c) For ascertaining the term in a lease regarding notice of
eviction. (Per M/s.Jagajit Industries Ltd. v. Rajiv Gupta (AIR
1981 Delhi 359).
d) For ascertaining the date on which the tenancy began. (Per
Zarif Ahmad and Another v. Satish Kumar and Another (AIR
1983 All. 164).
e) For ascertaining as to who is the tenant and on what terms
he has been created a tenant (Per Haran Chandra Chakravarti
v. Kaliprasanna Sarkar (AIR 1932 Cal. 83).
The aforesaid list is not exhaustive. The net
13.
conclusion that can be drawn from the decisions referred to
above is that an unregistered lease cannot be pressed into
service to create, declare, assign, limit or extinguish any right,
title or interest in or to the property comprised in the
document. As the term of lease imposes a limit on the interest
of the parties, an unregistered document cannot be relied on
for ascertaining the term of lease. This position is further
clarified by the Supreme Court in K.B.Saha and Sons Pvt. Ltd.
vs. Development Consultant Ltd. (2008) 8 SCC 564). Therein,
the Apex Court was considering a case where the eviction
proceedings were based on the memorandum of lease
agreement. The agreement was unregistered. There was a
clause in the agreement clause (9) which required the lessee
to use the tenanted premises only for its particular named
officer. The Apex Court found that it was an important term
forming part of lease agreement and it cannot be looked into
even for collateral purposes to come to a conclusion that the
respondent was liable to be evicted because of violation of the
aforesaid clause."
In Anthony v. K.C.Ittoop & Sons, (2000) 6 SCC
14.
394, the question arose whether a tenant of a building could
be evicted by filing a suit in the regular Court when the
building is situated in an area covered by the Kerala Buildings
(Lease and Rent Control) Act and when the lease was for a
period of more than one year and the lease deed was not
registered. The High Court held that the tenant has not
proved that independent of the void lease the relationship of
the landlord and tenant has come into existence between the
parties and therefore, the suit was maintainable. The
Supreme Court in the further appeal held that the instrument
of lease is required to be registered and the Court is disabled
from using the instrument as evidence and it goes out of
consideration. On the admission of the landlord that the
defendant was inducted into possession of the building by the
owner and thereafter, he was paying monthly rent, the legal
character of the defendant has to be attributed to a jural
relationship which cannot be placed in a way anything
different from that of lessor and lessee. Therefore, the
defendant could be evicted only under the provisions of the
Rent Control Act. In that case, the Court was concerned with
the status of the defendant as to whether he was a lessee or of
any other legal character. That by itself will not help the
revision petitioner in this case as by giving effect to the term
in the sale deed that the tenant can continue in possession for
ten years, he will be enforcing a term in a lease transaction,
which is otherwise unenforceable in law for want of a
registered document. If the original landlords were not bound
by the term of the lease deed as it was not a registered
document, the transferee also cannot be bound to do so. ..."
15. In the light of the discussion of the legal position as
mentioned above, the conclusion follows that, in the present
case, the lease for any period exceeding one year was
compulsorily registrable document requiring the registration
charges and the stamp duty in accordance with law. The
Court was, no doubt, wrong to admit the document of lease
in to evidence when it was compulsorily registrable
according to the law (supra) in view of the provisions in
Section 55 of the Maharashtra Rent Control Act read along
with Section 17(1) (d) of the Registration Act and further
read along with Section 107 of the Transfer of Property Act.
But then, the document can be taken into consideration for
collateral purposes, as stated above for proving the nature
and character of possession of the tenant and ascertaining
whether the purpose of lease was residential or not and for
ascertaining the commencement of possession, rate of rent
etc. as held by the first Appellate Court. Therefore, the suit
16.
was rightly decreed by the first Appellate Court.
In view of the above, the aforementioned
substantial questions of law are answered in the affirmative.
The Second Appeal lacks merits. Hence, it is dismissed with
costs. The tenant/occupant shall within three months from
today hand over possession of the suit property to the
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