Narayana Chetty and Another vs Muthiah Servai and Others

We answer the question referred in the negative. It is immaterial whether possession has passed or not in accordance with the agreement. It is

clear that the decision of the Full Bench in Raja of Venkatagiri v. Narayana Reddi ILR (1884) M. 456 does not cover the point. As is explained in

the order of reference what was held in Raja of Venkatagiri v. Narayana Reddi ILR (1884) M. 456, was that a Kabuliat signed by the lessee but

inadmissible to prove the lease for want of registration was admissible to prove the karar or the agreement to lease which preceded it. The decision

in Konduru Srinivasa Charyulu v. Gottumukkala Venkataraju (1907) 17 M.L.J. 218 would seem to have proceeded upon a misapprehension of

the Full Bench case. The learned Judges who decided it assumed that the Full Bench case was a suit for damages for the breach of an agreement in

writing to let which was unregistered though compulsorily registrable. They held, and in our opinion rightly, that there was no distinction between a

suit for specific performance of such an agreement and one for damages for the breach of it. The learned Judges merely applied, as we venture to

think, erroneously, the decision of the Full Bench to the case before them. They did not discuss any provision of the Registration Act. Mr. Justice

Boddam who was a party to this decision took the opposite view in second appeal No. 525 of 19O3, sitting with Mr. Justice Sankaran Nair. The

judgment of Subramanya Aiyar and Miller, JJ. in second appeal No. 973 of 19O4, is open to the same observation as the decision in Konduru

Srinivasa Charyulu v. Gottumukkala Venkataraju (1907) 17 M.L.J. 218. Our attention was invited to the judgment of the learned Chief Justice and

Mr. Justice Miller in Second appeal No. 979 of 1904 Bangarayya Garu v. P. Jaganna Raju Garu (1907) 7 M.L.T. 278. The document in that case

was not an agreement to lease. There the instrument recited a request by the executant and an agreement by the other party to give certain lands to

her and an actual grant of the same, and contained a promise to manage the lands and enjoy them subject to certain terms. The operative part of

the instrument was held to require registration. The question was whether for want of registration it was inadmissible to prove the recital. The

learned Judges held that the document was admissible to prove the recital, i.e., the admission by the plaintiff of the existence of an agreement to

give some lands to the plaintiff which itself was not in writing or at all events did not require registration. But there are certain observations in their

judgment which have been pressed upon us. After referring to Raja of Venkatagiri v. Narayana Reddi ILR (1894) M. 456, and Konduru Srtnivasa

Charyulu v. Gottumukkala Venkataraju (1907) 17 M.L.J. 218 the learned Judges observe ""that an agreement to lease Immovable property is not

actually a transaction affecting land unless in cases where by the agreement itself a right in the land is created"" and that ""on that ground it may be

held that evidence can be give of such an agreement by means of an unregistered document which is compulsorily registrable."" We do not think this

can be regarded as an adjudication on the question which has been referred to us. The decision in Satyendra Nath Bose v. Anil Chandra Ghosh

(1910) 14 C.W.N. 65 is that of a single judge sitting on the Original Side. He simply followed the decision in Konduru Srinivasa Charyulu v.

Gottumukkala Venkataraju (1907) 17 M.L.J. 218. As regards the suggestion made in that case that, a lease is the sale of a limited interest and that

an agreement to lease stands on the same footing as an agreement to sell pro tanto. The learned judge would seem to have overlooked the fact that

the legal incidents of the two transactions are entirely different. An agreement to lease is expressly included in the definition of lease in the

Registration Act while it cannot be suggested that an agreement to sell falls within any definition of sale. Clause (h) of Section 17 excludes an

agreement to sell from the class of compulsorily registrable documents and Section 54 of the Transfer of Property Act provides that a contract to

sell does not create an interest in the property. It is true that an agreement to lease may likewise not create an interest in Immovable property

though Clause (h) of Section 17 has no application to it, and there is no statutory provision in India which says so. But Mr. S. Srinivasa Iyengar has

in his able argument drawn our attention to the provisions of Section 40 of the Transfer of Property Act and Section 91 of the Trusts Act. The 1st

of these provisions speaks of an obligation arising out of a contract and annexed to the ownership of Immovable property but not amounting to an

interest therein or easement thereon being enforceable against a transferee with notice or a gratuitou transferee of the property affected thereby.

This shows that a contract to sell or an agreement to lease Immovable property is a transaction which affects the property. In fact, the illustration to

that section puts the case of an agreement to sell being enforceable against the transferee with notice, as he has taken property affected by the

previous contract to sell it. Section 91 of the Trusts Act puts the same case of a person acquiring property with notice that another person has

entered into an existing contract affecting that property of which specific performance could be enforced and consequently becoming liable to hold

the property for the benefit of the other. When, therefore, Section 49 of the Registration Act declares that a document compulsorily registrable but

remaining unregistered shall not be ""received in evidence of a transaction affecting such property"" or, as put by the Calcutta High Court, see

Ulfatunnissa Elahijan Bibi v. Hossain Khan ILR (1882) C. 520 ""of a transaction so far as it affects such property"" it would seem that the legislature

meant to indicate that the instrument should not be received in evidence even where the transaction sought to be proved did not amount to a

transfer of interest in Immovable property but only created on obligation to transfer the property.

Section 49 consists of two parts. It provides first ""that no document required by Section 17 to be registered shall affect any Immovable property

comprised therein, etc."" The second part of section says that such a document ""shall not be received as evidence of any transaction affecting such

property,"" i.e., as we take it, the Immovable property comprised therein. As regards Immovable property other than that comprised in the

instrument or a transaction in respect thereof, the section contains no prohibition against the admissibility of the instrument. We must assume that

the two parts of the section deal with different subjects. See Wilson J. in the order of reference to the Full Bench in Ulfatunnissa Elahijan Bibi v.

Hossain Khan (1841) 46 E.R. 562. The first part apparently presupposes that the document itself is the transaction or the mode in which it is

carried out. The second part of the section seems to relate to cases where the document itself is not the transaction but is only a record of a

transaction or being itself a transaction contains a reference to or a recital of another transaction which affects the Immovable property comprised

therein. Even in the last case the document may be inadmissible to prove the other transacion provided it affects the Immovable property

comprised therein. As the Registration Act deals only with written instruments, it may be doubted whether the transaction referred to in Section 49

can be merely oral. It is unnecessary to define the exact scope of this clause as to in admissibility for proving a transaction affecting such property.

It is enough for the purpose of this reference to say that a contract to lease Immovable property which is compulsorily registrable u/s 17, Clause

(d), affects the Immovable property see Green J., in Raju Babu v. Krishnarav Ramachandra ILR (1876) B. 273 and cannot if unregistered affect

the property or be received in evidence to prove the contract. Suits for specific performance of a contract to sell were referred to in the course of

the argument as suits affecting property. That is no doubt true as the relief asked for is the conveyance of property. The doctrine of lis pendens has

been held to apply to a transfer of Immovable property pending a suit of for specific performance - Turner v. Wright (1845) 49 E.R. 252 Hadly v.

The London Bank of Scotland (1841) 46 E.R. 562; Pranjivan Govardhan Das v. Baju ILR (1880) B. 34; Mati Lal Pal v. Preo Nath Mitra (1908)

CRI.L.J. 96. If a transaction like a contract to sell or lease Immovable property does not affect it, it is difficult to see how a suit to enforce the

transaction can be regarded as affecting it. A contract to sell Immovable property, in writing, though it may affect the property without passing an

interest in it, is exempted from registration by Clause (h) [now Clause (2) v] of Section 17 of the Registration Act. But an agreement in writing to

let falling within Clause (d) of Section 17 is not. It cannot be therefore received in evidence of the transaction which affects the Immovable

property comprised therein.