Morgan and Son vs N.P. Fernandez

Napier, J.—The question raised in this second appeal is whether the four letters A, B, C and D, or alternatively, the two letters A and B

require registration under Sections 17 and 49 of the Registration Act, Section 17, Sub-Section (1) requires that ""the following documents shall be

registered,"" namely, among them Clause (a) ""bases of immovable property from year to year, or for any term exceeding one year, or reserving a

yearly rent. ""Under the definition Section Sub-Section 7"" ''lease'' includes an agreement to lease."" There is a proviso to Section 17, Sub-section 2

which excepts some documents which would otherwise come under Clauses (b) and (c) and also distinguishes certain classes of documents which

might otherwise have been thought to fall under either of those two classes. One of these clauses is (5) ""any document not itself creating etc. any

right, title, etc. but merely creating a right to obtain another document which will when executed create such right, etc."" It has been held by a Full

Bench of this Court in Narayanan Chetty v. Muthiah Servai ILR (1910) M. 63. 21 M.L.J. 41 that as Clause (5) has not been applied by Sub-

Section (2) to leases the legislature must have had in its mind that documents with regard to leases cannot ""merely create a right to obtain another

document"" and so are unsuited for the application of Clause 5 and that the fact of their exclusion from that clause and the specific inclusion of

agreements to lease among ''leases'' in the definition section indicates that agreements so long as they settle the terms of the lease or leases, whether

they contemplate the creation of another document or not, are leases within the meaning of Section 2, That decision is of course binding on Rs. It is

of the greatest importance in considering the question raised in this appeal because if the contention for the appellant is correct it will be perfectly

easy to create valid leases without the necessity for registration. Where the legislature has desired to exclude documents creating particular rights it

has specifically mentioned them. (Vide several clauses to Sub-section 2). Subject to those exceptions the policy indicated by Section 17 is that all

other documents creating rights in immovable property as distinguished from documents merely entitling parties to obtain a document creating such

rights should be registered. Mr. K.N. Aiya, however, relies on certain cases which have put a limited construction on Section 17. His argument is

that the words in Section 17 Sub-section (1) ''the following documents'' only apply to cases where the right is created by a single instrument. The

first answer to that contention is that the word ''instrument'' has been omitted from Sub-section 1(d) although it appears in the other clauses of the

sub-section. It is not, ""instrument of lease"" as we have ""instrument of gift,"" but ""lease."" This difference of language has not, as far as I am aware,

been noted in any of the decided cases. The next answer is that the word ''documents'' in the section is certainly of itself wide enough to cover

more than one letter creating a lease. Certainly there is authority for the proposition, but I am unable to accede to it. On principle there can be no

reason why an agreement for lease created by a letter setting out the terms and endorsed ''accepted'' should require registration and the same

transaction embodied in two letters should not, and I cannot see where the practical difficulty lies in registering two or more letters constituting the

contract. The authority relied on is an unreported case of this court, Appeal No. 201 of 1908 where the learned Judges rely on certain other cases

for the proposition that if there is no one instrument which can be regarded as a lease, then Section 17 has no application. I have examined those

cases, which are relied on by the appellant before us also, and with the very greatest deference to the learned Judges I do not think they support

the proposition. One of them is a. decision of this court, Rajah of Venkatagiri v. Narayana Reddi ILR (1804) M. 456 : 4 M.L.J. 198, which being

a decision of a Full Bench would of course be binding onus. What was decided in that case was that Section 49 did not apply to the facts of the

case, vide page 458 where the learned Judges say that the document may be admitted to prove the contract and the damages occasioned by the

breach of it. This decision is explained in the judgment of the Bench before whom the case came, at page 460 where the Court uses the following

language: This is not a suit brought upon the kabuliat and cowle, but a suit upon a breach of an implied contract by the defendant to do that which it

was necessary for him to do in order to give effect to the agreement which he had entered into with the plaintiff. The other unregistered documents

that have been put in showing the terms of the lease, have not been put in to enforce the lease, but must be deemed to have been put in simply as

evidence of the character of the breach of agreement by the defendant, and as a basis for calculating the measure of damages, neither of which

things can, in the least, affect the land lying in the village of Valaimaid."" The last words are most important as indicating the test applied by the

learned Judges, for Section 49 Clause (c) uses the words ""affecting any immovable property comprised therein. ""It is therefore no : authority for

the proposition as stated by the learned Judges in the later case. Moreover, there are other words used in the same paragraph that I have quoted

which are a direct authority against that proposition. The words following the passage have not been put in to enforce the lease are in which case

they could not have been admissible as evidence as they would have been evidence of a transaction affecting Immovable property."" This

proposition establishes the exact opposite to what is contended for. It is certainly obiter but it shows that the Judges did not consider Section 17 of

the Act of 1877, which is in exactly, the same terms as the present Act, to apply to leases created by document only. The other cases relied on by

the learned Judges in Appeal No. 201 of 1908, and here, are three cases in VII Calcutta, namely those on pages 703, 708 and 717 i.e., (1) Syed

Sufdar Reza v. Amzad Ali (1881) Maharaja Luchmessar Singh v. Mussammat Dakho and Maharaja Luchmissur Singh v. Rung Lal ILR (1881) C.

703 Lall Jha v. Negroo ILR (1981) C. 717 respectively. The first was a Full Bench case which decided that an application for lease accepted by

writing the word ''granted'' in the margin was a lease. It does not say that if it had been accepted by a separate letter it would not have been a lease

or would not have required registration. The case on page 717 decides that an unaccepted proposal is not a lease though if accepted by

endorsement it is. It decides nothing else. The case on p. 708 was one in which the dowles did not contain the term for which the lands were said

to have been granted and were not signed by the parties. The court held that as the dowles contained a portion only of the terms they were neither

leases nor agreements for leases. This case, again, is obviously no authority for the proposition. Against the authority of this unreported case there

is the language used by the Privy Council in The Port Canning Land Investment Reclamation and Book Co., Ltd. v. A. Smith 4 (1874) 21 W.R.

This was decided on the language of Act XX of 1866 which is slightly more favourable to the appellant, for the words of Section 17 therein

are ""the instruments next hereinafter mentioned not ''the documents''. It may very fairly be said that the change of the language in the later Acts of

1877 and 1908 was. to get rid of the technical meaning of the word ''instrument''. Their Lordships of the Privy Council dealing with certain letters

that passed between the Port Canning Land Company and the Municipal Commissioners held that they did not amount to a lease or an agreement

for a lease; and, with regard to the question of registration, use the following language : ""Their Lordships think that the High. Court was perfectly

right in holding that the letters did not require registration. They do not amount to a lease or an agreement for a lease bat are evidence of a contract

of a special character, not ""corning within the definition found in the Registration Act."" It seems to me that if the Board had thought that letters do

not require registration even if they do amount to an agreement for a lease their Lordships would hive said so in plain words. The question was

considered by a single Judge of the High Court of Calcutta in the case reported in Boyd v. Kreig ILR (1890) C. 48 where certain correspondence

was sought to be put in and objection was taken that it disclosed an agreement for a term of more than a year and therefore required registration.

The point was elaborately argued and the learned Judge laid down the law as follows : ""As to the registration a series of cases shows that where

correspondence constitutes a contract leasing premises for more than a year, that correspondence must be registered, although a formal document

may be contemplated."" On the facts he decided that the correspondence did not require registration as it only constituted a demise for a single

year. The cases on which the learned Judge relied ace not mentioned. So there is only the authority of this one case. There being no difficulty in

registering correspondence and there being no principle under which a contract by two letters should be excluded while a contract by one letter

and an endorsement should be included, and the language of the section being wide enough to include an agreement for a lease by more than one

document, I must hold that the four letters, or at all events letters A and B did require registration. In my opinion Appeal 201 of 1908 was wrongly

decided and should not be followed.

The appeal should be dismissed with costs.

Ayling, J.

I agree.