Nidasanametla Venkata Seshayya vs The District Board

Abdur Rahman, J.—A suit for specific performance was filed on behalf of the District Board, East Godavari, against one N.

Venkataseshayya in the following circumstances: The plaintiff (District Board) advertised in the, Godavari District Gazette that a lease for

cultivation of certain lands would be put to auction. It was to be for five years. The terms on which the lease was to be granted were notified in the

Gazette. The auction was held on the 30th May, 1930, and the defendant being the higher bidder, the Board agreed to grant the lease to him. In

pursuance of the contract, a muchilika was executed by the defendant and presented to the District Board. It was not registered. The defendant

failed to make payment of the rent and on a suit having been filed for its recovery on behalf of the Board, an objection was taken that the lease was

inadmissible in evidence for want of registration and could not be relied upon by the Board. The Board then filed the present suit which was

dismissed by the District Munsif on the preliminary ground that a suit for specific performance was not maintainable. This view did not find favour

with the learned Subordinate Judge of Cocanada and he set aside the District Munsif''s finding and remanded the case to him for decision on the

merits. Aggrieved by this order the defendant has filed an appeal to this Court.

The only question which calls for decision in this case is whether the suit for specific performance is competent. It has been argued on behalf of

the appellant that the amendments of the Transfer of Property Act, the Specific Relief Act and the Registration Act in 1929 would not help the

Board and the suit for specific performance was rightly dismissed by the trial Court. It was contended that the right conferred by Section 53-A of

the Transfer of Property Act was only available to the defendant to protect his possession and could not be availed of by the plaintiff in this case.

Similarly it was urged that Section 27-A of the Specific Relief Act would not apply as the section refers to a contract to lease and not to a lease

itself. In the same way an attempt was made to get rid of the effect of the proviso to Section 49 of the Registration Act by urging that the contract

referred to in Section 49 would refer, in the circumstances of the case, only to a contract to lease and not to a lease. The learned Counsel for the

respondent placed his reliance, in reply, on Section 117 of the Transfer of Property Act and contended that the lease being of an agricultural land

the provisions of Section 107 of the Act would not be applicable to this case and the lease would be admissible in evidence even if it was not

registered. This contention has however no force as the annual rent reserved under the lease was more than Rs. 50 and the provisions contained in

proviso to Section 17(1)(d) of the Registration Act would thus be of no avail.

As for the contentions raised on behalf of the appellant, it seems to me that a reference to Section 53-A of the Transfer of Property Act or to

Section 27-A of the Specific Relief Act is not quite pertinent although Section 49-A of the Registration Act might have been amended at the same

time when the other Acts were amended. The fact, that all the three Acts were amended with the same object is also, in my opinion, immaterial.

What has to be considered here is whether a contract to lease can be specifically enforced when the terms of the contract relating to immovable

property have not only been settled between the parties but have also been embodied in a lease. The contention raised by the learned Counsel for

the appellant is that the amendment to Section 49 of the Registration Act has not altered the legal situation and the lease would still be inadmissible

in evidence in the suit for the specific performance of the-contract. If the proposition enunciated by the learned Counsel for the appellant be

correct, it appears to me that the legislature must be held to have failed to express its intention as this was exactly the mischief which the

amendment was designed to remedy. It is unnecessary for me to go into the history of this legislation. Lei me now examine the proviso to Section

49 of the Registration Act and see if the contention advanced on behalf of the appellant can be borne out by the language used therein. The

relevant words in the proviso read as follows:

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.

The learned Counsel for the appellant has urged that the words ""document affecting immovable property"" were meant to cover the documents

containing agreements such as a contract to lease or a contract to sell and were not intended to cover documents which conveyed or purported to

convey title to immovable properties. I do not agree with this contention. There is nothing in the language of the proviso which would justify one to

place such a narrow construction. The words are unambiguous and there is no reason why full effect should not be given to them. On the other

hand this interpretation would defeat the very purpose for which the amendment was effected. If the matter were res Integra, I would have no

hesitation in construing the language of the proviso in a manner which would make all the documents affecting immovable property admissible as

evidence of contracts in suits for specific performance particularly when we find that documents conveying title to immovable property do not

ordinarily come into existence without prior contracts. But the learned Counsel for the appellant has referred me to a recent case decided by a

Division Bench of this Court and published in Venkadari Somappa Vs. The Official Receiver of Bellary, , where it was held that the decisions

contained in Satyanarayana v. Chinna Venkatarao (1925) 50 M.L.J. 674 : ILR 49 ILR 49 Mad. 302 and Valambalachi Vs. Duraiswami Pillai and

Another, were unaffected by the amendments made in 1929. While pronouncing their decision in Venkadari Somappa Vs. The Official Receiver of

Bellary, one of the learned judges has observed:

It is not open to me to ignore the provisions of the Registration Act and treating the instrument as a contract to transfer which it is not - compel the

transferor to execute a formal transfer - which he has already done.

That is the effect of Mantri Venkataswami Vs. Padda Krishnayya, which was recently followed and affirmed in Satyanarayana v. Chinna

Venkatarao (1925) 50 M.L.J. 674 : ILR 49 Mad. 302. In the latter case Coutts-Trotter, C.J., said:

I should have thought it very vicious method of construction to say that a document which purports to be one thing is to be allowed to be treated as

a valid document of a different order altogether.

Mr. Somayya for the appellant contends that the new proviso to Section 49 of the Indian Registration Act has changed all that.

After quoting Section 49, the learned Judge observed:

But that is not the same thing as saying that the unregistered instrument is itself the contract.

From what has been said by my learned brothers it would follow that the position of a person who happens to have a duly executed deed of

sale or mortgage in his favour is worse than that of the person who holds merely a written contract to sell or mortgage in his possession. If this is

the correct position, the latter would, but the former would not, be able to sue for specific performance of the contract and the only remedy which

the person in the unfortunate position of a vendee or mortgagee or a lease-holder would have, is to apply for a compulsory registration within the

few months provided by the Registration Act failing which his remedy would be barred and the conveyance useless.

With great deference to my learned brothers, I am unable to construe the words of the proviso to Section 49 in the manner suggested by them.

If this were all, whatever interpretation I may be inclined to place on these words, I would be bound by the decision of the learned judges in the

Division Bench case unless I decided to refer the matter to a larger Bench. It is however unnecessary for me to do so as they happened to observe

at p. 366:

In the present case it is not established that a separate agreement to mortgage was entered into prior to the execution of the mortgage-deed to

prove which, the mortgage-deed might have been tendered in evidence.

In the present case, I find that the terms of the contract were advertised by the Board in the District Gazette before the auction took place and

the bidder must be taken to have agreed to the terms which were advertised on behalf of the Board before he gave the bid. The agreement to lease

is separate and was entered into on the date on which the auction was confirmed by the Board as a result of the bid given by the appellant. In the

circumstances of this case, the agreement could be proved by the Board without the necessity of spelling it out of the lease itself. I would therefore

hold that the contention raised on behalf of the appellant has no force and must be repelled. The order of the lower appellate Court is affirmed and

the appeal is dismissed with costs.

Leave asked for and granted.