On plain reading of the said provision, I have no hesitation in observing that lease can be said to have been created in respect of an immovable property on year to year basis only by a registered instrument. The said provision further postulates that all other leases of immovable property may be either by a registered instrument or by oral agreement accompanied by delivery of possession. We are concerned with the later situation in the present case. However, the petitioner, in the plaint, has clearly asserted that an oral agreement was arrived at between the parties and the document in question was being relied upon only to buttress the stand that an oral agreement of lease was arrived at between the parties. In other words, the document (Exhibit- 48) is not pressed into service to contend that the same is an agreement of lease. It is only a circumstance relied upon by the petitioner to support his plea in the plaint that an oral agreement of lease was arrived at between the parties in respect of the suit premises. From the assertions made in the plaint, it is absolutely clear that the petitioner concedes that possession of the suit promises was not accompanied along with the oral agreement arrived at between the parties on 23rd March, 1978. On the other hand, the requirement, in law, by virtue of section 107 of Transfer of Property Act, particularly the second proviso thereof, is that if the parties enter into an oral agreement of lease, then it should be accompanied by delivery of possession. Even assuming that there was an oral agreement between the parties, it was not accompanied by delivery of possession; and, therefore, such a transaction, in my view, cannot be classified as lease within the meaning of section 105 read with section 107 of the Act. However, such a transaction would be only in the realm of agreement to create lease and not agreement of lease itself. It is pertinent to note that there is nothing on record to indicate that the State Government has issued any notification in terms of proviso to section 107 that lease may be unregistered instrument or by oral agreement without delivery of possession. In absence of such a notification, the rigours of second proviso of section 107, mandating that the oral agreement shall be accompanied by delivery of possession for entering into an agreement of lease, apply with full force. In which case, it is not possible to countenance the plea that the transaction in question qualifications the requirement of a lease. Resultantly, it is not possible to assume in law that there was any concluded contract of lease between the parties which created relationship of landlord and tenant in respect of the suit premises. A fortiori, the suit would then be in the nature of claim for specific performance and the same would be outside the scope of jurisdiction of the Rent Court. Section 28 of the Bombay Rent Act clearly postulates that the suit or proceeding between the landlord and tenant should be relating to the recovery of rent or possession of any premises. It presupposes that there should be existing relationship of landlord and tenant between the parties in respect of the suit premises. In the present case, since there was no concluded contract of lease, it is not possible to hold that the relationship of landlord and tenant was already created between the parties so as to invoke the jurisdiction of the Rent Court.
IN THE HIGH COURT OF BOMBAY
Writ Petition No. 3989 of 1991
Decided On: 23.02.2001
Sudhakar Pralhad Phagade Vs. Subhash Mahadeo Tokekar and Ors.
Hon'ble Judges/Coram:
A.M. Khanwilkar, J.
Citation: 2001(2) MHLJ730
1. This writ petition is directed against the order dated 27th March, 1991 passed by the IV Additional District Judge, Pune in Civil Revision No. 10 of 1987.
2. The petitioner claims to be tenant in respect of ground floor shop premises in 322, Narayan Peth, Pune 411030. The petitioner claims that on 23rd March 1978 the petitioner and respondent No. 1 entered into an agreement in writing in respect of neighbouring premises by which respondent No. 1 created tenancy rights in favour of the petitioner. According to the petitioner, on the same day, another oral agreement was arrived at between the parties in respect of the suit premises whereby it was agreed that the suit premises is let out to the petitioner and possession thereof was to be handed over to the petitioner on 5th April, 1978. The petitioner further claims that in consideration of the said oral agreement, the petitioner paid a sum of Rs. 2,500/- by cheque and Rs. 10,000/- by cash. The petitioner relies on receipt issued by respondent No. 1 for having received the amount by cheque. The petitioner has also relied on the receipt issued by respondent No. 1 towards the amount paid by cash. The case made out by the petitioner is that finishing work of the suit premises was underway and therefore the parties agreed that the possession of the suit premises will be made over to the petitioner on 5th April, 1978. In other words, the petitioner's case is that there was a concluded contract between the petitioner and respondent No. 1 creating tenancy rights in respect of the suit premises. However, respondent No. 1 failed to hand over possession of the suit premises to the petitioner and instead occupied the same for his personal use. In the circumstances, the petitioner filed the suit for recovery of possession of the suit premises before the Small Causes Court at Pune being Civil Suit No. 455 of 1981.
3. The respondents resisted the said suit by filing written statement, in which, besides denying the material facts, raised a specific plea that the agreement referred to by the petitioner does not create relationship of landlord and tenant between the parties; and that in absence of such relationship, the suit as filed before the Small Causes Court was not maintainable in view of express bar contained in section 28 of the Bombay Rent Act.
4. On the basis of the rival pleadings, the Court below framed issues. Issue No. 8 framed by the trial Court reads thus:
"Issue No. 8:---Whether this Court has no jurisdiction to entertain the claim in the suit?" The trial Court examined the said issue as preliminary issue and by an order dated 23rd August, 1983 held that the Rent Court has jurisdiction to try the suit.
5. Against the said decision of the trial Court, the matter was carried in appeal by the respondents, which appeal was allowed vide order dated 20th February, 1986 and the matter was remanded to the trial Court for fresh trial after giving opportunity to both sides to adduce evidence.
6. After remand, the trial Court by order dated 10th December, 1986 held that there was agreement of tenancy between the parties creating relationship of landlord and tenant and therefore the Rent Court had jurisdiction to entertain the suit. Against the said decision, the respondents, preferred Revision Application before the District Court, Pune. The IV Additional District Judge, Pune by the impugned order has allowed the Revision Application. The reason adopted by the District Court is that the agreement in question was admittedly an oral agreement and since possession of the suit premises was not accompanied while entering into the said agreement, it cannot be said that there was a concluded contract of lease or that of lease having been made between the parties as envisaged by the provision of section 107 of Transfer of Property Act, 1882. In the circumstances, the District Court by the impugned order allowed the Revision Application and held that since the relationship of landlord and tenant was not created by the parties, the suit as filed was not maintainable. In its judgment, the Revisional Court has relied upon a decision of this Court in M/s. Chunnilal Radeshyam & Sons v. Amin Manilal & Co. Pvt. Ltd., reported in 1982 (1) B.C.R. 35.
7. The aforesaid view is subject matter of challenge in the present writ petition. The learned Counsel for the petitioner has emphasised that from the averments in the plaint, supported by document (Exhibit- 48), coupled with the oral evidence adduced on behalf of the petitioner, it was evident that the parties had clearly created lease in favour of the petitioner in respect of the suit premises; and, therefore, the relationship between the petitioner and the respondents that of landlord and tenant was already created, for which reason the suit presented before the Small Causes Court was maintainable.
8. However, on examining the averments in the plaint and the documents relied upon the petitioner, what is seen is that: admittedly, no agreement of lease in writing in respect of the suit premises has been executed between the parties. It is common ground that the parties entered into an oral agreement. Besides that, the documents in the form of receipts clearly state that the possession of the suit premises would be delivered on a future date on 5th April, 1978. Therefore, the question that arises for consideration is whether such a transaction can be said to be one creating lease between the parties or it is only in the realm of an agreement to create lease. To answer this crucial question, it would be apposite to advert to section 107 of the Transfer of Property Act. Section 107 reads thus:
"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 be made by unregistered instrument or by oral agreement without delivery of possession."
9. On plain reading of the said provision, I have no hesitation in observing that lease can be said to have been created in respect of an immovable property on year to year basis only by a registered instrument. The said provision further postulates that all other leases of immovable property may be either by a registered instrument or by oral agreement accompanied by delivery of possession. We are concerned with the later situation in the present case. However, the petitioner, in the plaint, has clearly asserted that an oral agreement was arrived at between the parties and the document in question was being relied upon only to buttress the stand that an oral agreement of lease was arrived at between the parties. In other words, the document (Exhibit- 48) is not pressed into service to contend that the same is an agreement of lease. It is only a circumstance relied upon by the petitioner to support his plea in the plaint that an oral agreement of lease was arrived at between the parties in respect of the suit premises. From the assertions made in the plaint, it is absolutely clear that the petitioner concedes that possession of the suit promises was not accompanied along with the oral agreement arrived at between the parties on 23rd March, 1978. On the other hand, the requirement, in law, by virtue of section 107 of Transfer of Property Act, particularly the second proviso thereof, is that if the parties enter into an oral agreement of lease, then it should be accompanied by delivery of possession. Even assuming that there was an oral agreement between the parties, it was not accompanied by delivery of possession; and, therefore, such a transaction, in my view, cannot be classified as lease within the meaning of section 105 read with section 107 of the Act. However, such a transaction would be only in the realm of agreement to create lease and not agreement of lease itself. It is pertinent to note that there is nothing on record to indicate that the State Government has issued any notification in terms of proviso to section 107 that lease may be unregistered instrument or by oral agreement without delivery of possession. In absence of such a notification, the rigours of second proviso of section 107, mandating that the oral agreement shall be accompanied by delivery of possession for entering into an agreement of lease, apply with full force. In which case, it is not possible to countenance the plea that the transaction in question qualifications the requirement of a lease. Resultantly, it is not possible to assume in law that there was any concluded contract of lease between the parties which created relationship of landlord and tenant in respect of the suit premises. A fortiori, the suit would then be in the nature of claim for specific performance and the same would be outside the scope of jurisdiction of the Rent Court. Section 28 of the Bombay Rent Act clearly postulates that the suit or proceeding between the landlord and tenant should be relating to the recovery of rent or possession of any premises. It presupposes that there should be existing relationship of landlord and tenant between the parties in respect of the suit premises. In the present case, since there was no concluded contract of lease, it is not possible to hold that the relationship of landlord and tenant was already created between the parties so as to invoke the jurisdiction of the Rent Court. This question has been answered in the decision of this Court reported in 1988 (3) All.M.R. 753, Vikrant Engineers & others v. Shridhar Bhaskar Paranjape.
10. Mr. Mandlik has relied upon the decision of the Supreme Court in the case of Smt. Juthika Mulick v. Dr. Mahendra Yashwant Bal, reported in MANU/SC/0261/1995 : AIR1995SC1142 to contend that the document (Exhibit- 48) in question would clearly indicate that there was certainty of time agreed between the parties regarding delivery of possession of the suit premises and, therefore, the petitioner would be justified in contending that the relationship of landlord and tenant was already created between the parties. However, the said decision has no application to the facts of the present case. In the present case, admittedly, the agreement of lease, according to the petitioner, is an oral agreement and was not accompanied by delivery of possession. In such a situation, by virtue of section 107 of the Act, it cannot be said that there was concluded contract of lease and that relationship of landlord and tenant having been created between the parties. The transaction in question would at best be in the realm of an agreement to enter into a contract of lease. The subtle distinction between the two if kept in mind, the relief between the parties would be one of specific performance of the agreement and cannot be entertained by the Rent Court.
11. In the circumstances, the petition is devoid of merits. I find no reason to interfere with the view taken by the Revisional Court which is based on correct legal position. The petition therefore fails and is dismissed with no order as to costs.
12. At this stage, Mr. Mandlik states that since the petitioner has consumed time in litigating in this matter, the petitioner should be given benefit of this period for filing suit for specific performance. This question is left open to be decided by the Court as and when occasion arises.
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