The Hubli Panjarpol Samstha vs Prabhudev

B.V. Nagarathna, J.—1. The defendant in O.S. No. 36/2007 has preferred this Second Appeal, assailing judgment and decree passed in R.A. No. 11/2011 by the II Addl. Senior Civil Judge, Hubballi, dated 28.10.2013 confirming the judgment and decree passed in O.S. No. 36/2007 by the Principal Civil Judge and JMFC, Hubli, dated 16.11.2010.

For the sake of convenience, the parties shall be referred to, in terms of their status before the trial court.

The respondent-plaintiff filed the suit seeking specific performance of agreement to lease-cum-undertaking of lease dated 08.11.2005 by seeking a decree against the defendant to execute regular lease deed in respect of the suit property for a period of 99 years. According to the plaintiff, he is in actual possession and enjoyment of the suit property, which measures 2178 Sq. ft. The defendant is a registered Trust under the provisions of Karnataka Hindu Religious and Charitable Endowment Act, 1997. The defendant is the owner of the suit property and plaintiff has been a tenant of property for a period of 25 years. The suit property is a part of CTS No. 5175 situated in CTS Ward No. V of Hubli city. The defendant entered into an agreement of lease-cum-undertaking of lease with the plaintiff on 08.11.2005, agreeing to lease the suit property to the plaintiff for a period of 99 years on a yearly rent of Rs. 1,600/-. The defendant was to execute regular lease deed of the suit property for a period of 99 years within a period of three months from 08.11.2005 in favour of the plaintiff. There were several conditions and clauses in the agreement to lease-cum-undertaking of lease. According to the plaintiff, he has always been ready and willing to perform his part of the agreement and has always been paying rent in time by postal money order and for the period of 01.07.2005 to 30.06.2006 rents have been accepted as such by the defendant. When the defendant did not come forward to register the agreement to lease-cum-undertaking of lease in favour of the plaintiff, he filed a suit seeking specific performance of the agreement dated 08.11.2005.

On receipt of suit summons and court notice, defendant appeared and filed its written statement contending that the suit was not maintainable. That, no doubt the defendant is the owner of the suit property. But the agreement could not be enforced as it was for a period of 99 years and for such a long time the lease could not be executed. It was contended that the lease agreement being for a period of 99 years was illegal as the defendant was a charitable trust and could not enter into such an agreement and therefore, sought dismissal of the suit.

On the basis of the aforesaid pleadings, the trial court framed the following issues for its consideration:

Whether the plaintiff proves execution of agreement of lease-cum-undertaking of lease dated 08.11.2005 by defendant?

Whether the plaintiff is entitled for specific performance of contract?

What decree or order?

In support of his case, the plaintiff let in his evidence and examined himself as P.W. 1 and examined two witnesses as PWs. 2 and 3 and produced 25 documents which were marked as Ex. P. 1 to Ex. P. 25, while the defendant examined one witness as D.W. 1, but no documents were marked on behalf of the defendant.

On the basis of the said evidence, the trial court answered Issue Nos. 1 and 2 in the affirmative and decreed the suit, by directing the defendant to execute regular lease deed in respect of the suit property for a period of 99 years in favour of the plaintiff within two months from the date of the order, failing which, the Court Commissioner was to be appointed to execute the lease deed.

Being aggrieved by the said judgment and decree of the trial court, the defendant filed R.A. No. 11/2011 before the I Appellate Court, which on hearing the learned Counsel for the parties, framed the following points for its consideration:

It answered point Nos. 1 and 2 in the negative and dismissed the appeal by confirming the judgment and decree of the trial court passed in O.S. No. 36/2007 dated 16.11.2010.

Being aggrieved by the judgment and decree of the First Appellate Court, the defendant has preferred this Second Appeal.

I have heard the learned Counsel for the appellant and the learned Counsel for the respondent and perused the material on record.

It is contended on behalf of the appellant that the appellant is a charitable trust. Having regard to the aims and objectives of the said trust, it could not have executed agreement to lease-cum-undertaking of lease for a period of 99 years. That is against the interest of the Trust. In this context, it was stated that the annual rental is only Rs. 1,600/- which is meager and therefore, the appellant thought it prudent to execute the lease deed. It was also contended that the agreement is otherwise invalid and therefore, the courts below could not have granted specific performance of the suit agreement as the suit agreement has to be registered with proper stamp duty being paid thereon. He also contended that the agreement is dated 08.11.2005, whereas the stamp papers on which it is written are dated 03.11.2005 and 09.11.2005. He hence contended that the agreement is not enforceable. Appellant''s Counsel hence contended that substantial questions of law would arise in this appeal which requires that the matter may be admitted for a detailed hearing.

Per contra, learned Counsel for the respondent supporting the judgment and decree of the trial court, contended that there is a clear admission on the part of the defendant with regard to the duration of the lease in favour of the respondent-plaintiff i.e. for a period of 99 years. The agreement of lease for 99 years was executed by the defendant who did not come forward to execute the regular lease deed. Agreement of lease is neither registerable nor any stamp duty is required to be borne on the said agreement. He contended that the agreement may be effective from 08.11.2005. But it was written subsequent to that date on the stamp paper, which is permissible in law, as there can always be a contract of the above transaction which is subsequently put on in writing. He also brought to my notice the fact that the stamp paper on which agreement is typed was purchased by the defendant and agreement has been executed by the defendant and therefore, no fault could be found with the plaintiff in that regard. He submitted that no substantial question of law arises in the appeal and therefore, the same may be dismissed.

Having heard the learned Counsel for the parties and on perusal of the material on record, it is noted that the defendant had executed an agreement of lease-cum-undertaking of lease dated 8.11.2005 agreeing to let out an extent of 2178 sq. feet land to the plaintiff for a period of 99 years on yearly rental of Rs. 1,600/-. The defendant is a charitable trust. The plaintiff as on the date of the said agreement was already a tenant of the said land for about 25 years. Having regard to the length of tenancy already in existence and the defendant being a charitable institution, agreed to continue the lease agreement in favour of plaintiff for a period of 99 years. However, prior to the execution of the regular lease deed for the purpose of registration, an agreement to lease-cum-undertaking of lease dated 08.11.2005 was entered into. As no regular lease deed was executed and registered by the defendant, the plaintiff sought for specific performance of the agreement to lease-cum-undertaking of lease dated 08.11.2005. Both the courts have found that the plaintiff was ready and willing to perform his part of the contract. It was only the defendant who did not come forward to execute the regular lease deed. The courts below have noted that the agreement was executed by the defendant. It was not a concocted or fabricated document. The agreement did not require any registration. In fact, a regular lease deed was to be executed by the defendant and registered and both the courts have exercised discretion in favour of the plaintiff while granting the decree of specific performance of the agreement to lease-cum-undertaking of lease dated 08.11.2005.

The defendant, as already noted, is a charitable trust. Exercising its wisdom and prudence, it has decided to lease out the property to plaintiff for a period of 99 years. Neither the period of lease nor the rental for the lease is a matter which can be adjudicated upon by the court at the time of considering the suit for specific performance of the agreement, as the question of adequacy of consideration is beyond the pale of judicial adjudication. That is left to the wisdom of the parties who have entered into the agreement. The evidence let-in by the plaintiff in respect of the case of the plaintiff had to be considered. Ex. P. 2 is execution of Agreement to lease-cum-undertaking of lease, Ex. P. 3 is legal notice which is issued by the plaintiff and not replied to by the defendant. When defendant has admitted about the execution of Ex. P. 2 in his cross-examination not much weightage can be given with regard to the dates of non-judicial stamp papers. That apart, it is defendant who had purchased the stamp papers. The trial court has noted that the issue relating the dates on the non-judicial stamp papers not having been raised in the pleadings or evidence, it was raised for the first time in the written arguments. That apart, the fact that the plaintiff was already a tenant of defendant for a period of 25 years has been noted. The courts below did not find any reason to decline the relief of specific performance to the plaintiff. As both the courts below have exercised their discretion in favour of the plaintiff by granting a decree of specific performance of the agreement to lease-cum-undertaking of lease dated 8.11.2005, I do not think that the Second Appellate Court can exercise any discretion contrary to what has been exercised by the courts below as no illegality in the exercise of discretion has been pointed out by the defendant/appellant.

In the circumstances, no substantial question of law arises in the appeal. The appeal is dismissed.

Parties to bear their respective costs.