Sagarmal vs Jethmal

Nevaskar, J.—This is an appeal against an order of remand passed by the Additional District Judge Indore under order 41 Rule 23 C.P.C.

The facts giving rise to this appeal are as follows:-Plaintiff filed this suit for ejectment and arrears of rent amounting to Rs. 960/- on the allegation that the Defendant mortgaged with him his house in Chowk Bazar, Mahidpur, Ward No. 1, House No. 163 on 20-4-1950 under a deed of usufructuary mortgage duly registered for a consideration of Rs. 8000 and delivered possession to him on that day that out of the aforesaid property possession of the portion of the house mentioned in Para No. 1 of the plaint was actually given possession of to the Plaintiff and that the remaining portion of the house was taken by the Defendant on Rs 30 p.m. as rent that four days later i.e. on 20-4-1950, the Defendant executed a rent-note in Plaintiff''s favour in respect of that portion that the Defendant thereafter did not pay any rent; that the Plaintiff thereupon gave notice to him on 22-10-1952 calling upon him to pay the arrears of rent and vacate the premises by the end of the current month; that in-spite of the notice the Defendant neither paid the arrears nor vacated the premises. The Plaintiff therefore claimed Rs. 960 as arrears of rent upto 20-12-52, ejectment and further mesne profits.

The Defendant in his written statement denied the creation of the mortgage by a deed, dated 204-1950, delivery of possession of any portion of his property and execution of a rent-note in Plaintiff''s favour on 24-4-950 for Rs. 30 p.m. He admitted the receipt of Plaintiff''s notice and stated that the same had been replied to. He also raised questions relating to court, fees and the suit not being within pecuniary jurisdiction of that Court.

In the alternative the Defendant pleaded that the mortgage-deed even if held to have been made was sham and bogus and had been intended to save the property from his creditors. The transfer was, according to him, made as a result of Plaintiff''s inducement and on his assurance that the deed was valueless for affecting him adversely. He further contended that the mortgage transaction itself being bogus the rent-note too is so and is ineffective. Defence under Madhya Bharat Sthan Niyantran Vidhan was also taken.

As a result of these pleadings the Court framed issues. Issue No. 9 was to the following effect:

Whether the rent-note was compulsorily registrable and if so whether the Plaintiff''s suit is not maintainable ?

This issue was treated by the trial Court as preliminary and that Court relying upon the decisions of Madhya Bharat High Court in Madhya Bharat Law Reporter 1953 M.B.L.J. 491 Wamanrao v. Gopaldas and Calcutta High Court in Nabin Chandra Roy and Another Vs. Rajendra Kumar Nag Choudhury and Others, Nabin Chandra v. Rajendra Kumar and Atul Krishna Bose and Others Vs. Zahed Mondal and Others, Atul Krishna v. Zahed Mondal, dismissed the suit.

As against this decision the Plaintiff preferred appeal. The appellate Court set aside that decision holding that in the first place the Plaintiff bad alleged an oral tenancy dated 20-1-1950 attended with delivery of possession and subsequent execution of rent-note dated 24-4-50 and secondly that it was unilateral document not amounting to lease as contemplated by Section 107 of the Transfer of Property Act and did not require registration. It therefore cane to the conclusion that the dismissal of the suit was improper. It therefore remanded the suit for decision on other issues left undecided.

The present appeal is directed against that order of remand.

The case had come up before me earlier as a udge of the Madhya Bharat High Court. In view of two conflicting decisions of the single Judges of the Madhya Bharat High Court on the question under consideration I referred the case to a Division Bench. After the abolition of the Madhya Bharat High Court the case was placed for disposal before myself and Dixit. We held that in the changed context the reference was rendered unnecessary. The case accordingly was sent back for disposal by a single Judge, It is again placed before me for disposal.

Mr. Fadnis who appeared for the Plaintiff relied upon the decision of Bose J. in AIR 1936 Nag 174 Mt. Nasiban v. Mohammed Sayed for the view that the effect of Section 107 of the Transfer of Property Act and Section 4 and 17 (d) of the Registration Act Is to exclude from evidence and consideration all the unregistered leases which have been reduced to writing.

The reasoning employed by the learned Judge in that case is that the provisions of Section 107 of the Transfer of Property Act are exhaustive and leave no room for a written, but unregistered lease and that the effect of Section 17 (d) of the Registration Act and Section 107 of the Transfer of Property Act read along with Section 4 of that Act is to exclude all unregistered leases which have been reduced to writing. Proviso contained in Section 107 of the Transfer of Property Act was considered by him as clearly supporting this view. This decision was later considered in AIR 1940 143 (Nagpur) Tulsiram Rajaram v. Govinda Ramji, Gruer J, in this case observed as follows: --

The lower Courts relying on AIR 1936 Nag 174 (Mt. Nasiban v. Mohammad Sayed) have upheld this last plea. The rent-note is said to require registration u/s 107, Transfer of Property Act, and Section 17 (1) (d), Registration Act. This depends on whether it amounts to a lease or not. It is executed by the lessee only and is an agreement to take the house on rent, i.e. it is a unilateral document--a Kabullyat. As the lease is for six months. It did not require to be made by a registered instrument u/s 107 but could be by oral agreement accompanied by delivery of possession. If the Kabuliyat is to be looked upon as the lease then it of course would have to be registered and would require to be executed by both lessor and lessee. There is no other document executed by the lessor, and I do not see how one should be forced to look upon this Kabuliyat as a lease invalid both for want of registration and for want of signature by both parties. It would be in compliance with the law to regard the lease as made by oral agreement and the acknowledgment of the lease (Kabuliyat) to be by this document, which then did not require registration at all. In 24 N.L.R. 68 (Birdichand v. Popatlal) at page 74 such a Kabuliyat or rent-note was held not to require registration u/s 107, Transfer of Property Act, not being a lease granted by the lessor. This case does not appear to have been brought to the notice of Bose J. in deciding L.P.A. No. 17 of 1936 (Mt Nasiban v. Mohammad Sayed). In fact it seems to have been assumed in that case without discussion that the rent-note did amount to a lease. As the point was not discussed I do not feel pressed by that decision.

12 Practically the same view was taken by the Full-Bench of the Lahore High Court in AIR 1943 127 (Lahore) (Mohonlal v. Ganda Singh). In that case it was accepted as correct, the proposition that Section 107 of the Transfer of Property Act is exhaustive as regards the modes by which tenancy can be created it was further held that a unilateral document such as a rent-note or a Kabuliyat is not effective as a lease by reason of Section 107 of the Transfer of Property Act and that therefore if the document did not require registration under the Registration Act and was not a lease for the purpose of Section 107 of the Transfer of Property Act it would require no registration. The learned Judge of the Full Bench posed a question as follows:

Is there any reason why in cases where registration is not necessary It should be omitted to be taken into consideration and why an oral agreement of lease not spelt out of it as long as the other condition in regard to delivery of possession is found to have been complied with ?

and answered it by saying that there seemed to be no justification for the that document like a Kabuliyat cannot be looked for the purpose. According to them it contained an admission or an acknowledgment by the person attempted to be made liable and should be taken to be the best evidence as to the oral agreement.

13 The view in the Allahabad High Court is practically the same as above and as an instance we may refer to the observation, of the Division Bench of that Court in Para 24 of the decision reported in Sheo Dulare Lal Sah Vs. Anant Ram and Another, (480; Sheo Dulare v. Anant Ram.

In the present case the facts are clearer and leave no room for doubt According to the allegations made by the Plaintiff the Defendant had executed the mortgage and delivered possession to the Plaintiff of the mortgaged house and took from him under an oral lease a portion of the property. All this was on 20-4-50. Then on 24-4-1950 he executed a rent-note in aspect of the portion taken on rent. Thus there are clear allegations as regards existence of oral agreement attended with delivery of possession. Under these circumstances the trial Court could not have dismissed the suit on the preliminary point holding that the present suit was not maintainable. His finding that the rent-note needed registration is also not correct and the order of remand passed by the lower court is therefore unexceptionable and ought to be affirmed.

The appeal therefore fails and is dismissed with costs.