Mangan Lal Deoshi v. Mohammad Moinul Haque & Others. (1950 INSC 32)

Court: Supreme Court of India
Decided: 1 December 1950
Bench: H. J. Kania, M. Patanjali Sastri

Headnote

Indian R<gistration Act. 1908. s. 17 (1) (bl awl (d), !. 17 (21- " Lease "-Conivromise decree c1·eatina !tnder.lea.se l.Jetw::e11 A and E on condition that A vavs a. s1t11i. of money to 0-TV!utlrnr comr'llfrorify regist1·ab 1e-Aareem£nt to lease not creatin'] i'lnm~diate interest in la~d-Whether ''lease ".

An agreement for a lense, which a lease is by the Indian Registration Act declared to include, must be a document which effects an nctu•I demise and operates as a lease. It must creato a present and irn1nediate interest in land.

Where a litigation between two perrnns A and B who claimed to he tenants under C was settled by a compromise decree tho effect of which \\'RS to create a perpetual underlease between A and B which was to tako effect only on condition that A paid ll.s. 8,000 to C within a fixed period :

He,7d, that such a contingent agreement was not 11 a. lease"

within cl. (d) of s. I 7 (1) of the Indian Registrotion Act, ond even though it was covered by cl. (b' of the said section it was exempt from registration under cl. (vi) of sub·s. (2) of s. 17.

Hemanta Kumari Debi v. Midnapur Zaminiari Co. (I L.R. 47 Cal. 485 P.O.) relied on.

CIVIL APPELLATE j!JRISmGTION: Civil Appeal No. 94 of 1949. ·

1950 Appeal from a judgment and decree of the High M";;!:,:ti1 Court of Judicature at Patna in Appeal from Appel-

late Decree No. 97 of 1946 (Manohar Lall and v. Mukherji JJ.) dated 23rd December, 1947, confirming Mohammad the judgment of the District Judge of Purulia in Jfo;•u! Hague Appeal No. 159 of 1944 .

.tOthera S. P. Sinha (P. K. Bose, with him) for the

appellant.

N. C. Chatterjee and Panchanan Ghosh (Chandra Narayan Naik, with them) for the respondent.

1950. December 1. The Judgment of the Court was delivered by Patanjali PATANJALI SASTRI ].-This appeal arises out of a 8••tri J. suit brought by the respondent in the court of the

Subordinate Judge, Dhanbad, for recovery oi arrears of royalty and cess from the appellant and another alleged to be due under a compromise decree passed on the 6th March, 1923, in a previous suit between the predecessors in interest of the parties. The only plea which is material for the purpose of this appeal is that the compromise decree not having been registered was inadmissible in evidence. The courts below held that the document did not require registration and gave effect to its terms in decreeing the suit. The second defendant has preferred this appeal.

The facts are not now in dispute and may be briefly statJ!d. On 11th March, 1921, one Kumar Krishna Prasad Singh (hereinafter referred to as Kumar) granted a permanent lease of the right to the under-ground coal in 5,800 bighas of land belonging to him to Shibsaran Singh and Sitaram Singh (hereinafter referred to as the Singhs) by a registered patta stipu-lating for a salami of Rs. 8,000 and royalty at the rate of 2a. per ton of coal raised subject to a minimum of Rs. 8,000 and for certain other cesses and interest. On 7th June, 1921, Kumar executed another permanent patta leasing the right to the coal in 500 bighas out of the 5,800 bighas referred to above to one Prayagji Bo1llavji Deoshi and his son Harakchand Deoshi (here-inafter referred to as the Deoshis). By this document the Deoshis agreed inter alia to pay royalty at the rate 1950 of 2a. per ton on all classes of coal raised subject to a minimum of Rs. 750 a year. The Singhs feeling themsel-Mangan Lal ves aggrieved by the latter transaction brought a title Deoshi V. suit (No. 1291of1921) in the Court of the Subordinate Mohammad Judge of Dhan bad for a declaration of their title and .. 'lloinul Ha2ue for possession of the 500 bighas leased to the Deoshis cf Oth!rs. under the aforesaid patta of 7th June, 1921. To that suit Kumar was made a party as defendant No. 3, the Patanjali Deoshis being defendants 1 and 2. The suit was how-8a1tri J. ever compromised on 6th March, 1923, by all the parties and a decree based on the compromise was also passed on the same day. The interest of the Singhs was brought to sale in 1938 in execution of a decree obtained against them and was purchased by the plaintiff who instituted the present suit,on 3rd October, 1942, claiming the royalty and cesses payable under the compromise decree for the period from Pous 1345 to Asadh 1349 B. S. from defendants 1 and 2 as the representatives of the Deoshis who entered into the compromise of March, 1923.

In order to appreciate the contentions of the parties, it is necessary to set out the relevant terms of the compromise decree which are as follows :-

" The plaintiffs (the Singhs) within two months from this date shall pay Rs. 8,000 as salami to defendant No. 3 (Kumar). Otherwise all the terms of the compro-mise will stand cancelled and the plaintiffs shall not be competent to claim any right to or possession over the·land covered.by the patta dated 11th March, 1921. ..

The patta which defendant No. 3 executed in favour of the plaintiffs in respect of 5 ,800 bighas of coal land in village Rahraband shall remain in force, and the plaintiffs will get a decree of declaration of their right and title to the 500 bighas of coal land in dispute but defendants 1 and 2 (the Deoshis) shall hold posses-sion as tenants. Besides the terms mentioned below, defendants 1 and 2 shall remain bound by all the remaining terms under which they took settlement of the 500 bighas of coal land from defendant No. 3 under 1950 patta and Kabuliyat, and both the defendants 1 and 2

shall possess the same under the plaintiffs from gene-Mangan. Lal ration to generation and all the terms of the said patta

Dtosh$ and Kabuliyat shall remain effective and in force

Mohamma.t between them. Both the defendants 1 and 2 shall Moi01ul Haqus remain bound to pay to the plaintiffs commission at

¢ Otker1., the rate of 2a. 6p. per ton on all sorts of coal instead

of 2a. a ton as stated before in the pat ta of 5,800 big has Patanjali of land settled with the plaintiffs ... The plaintiffs shall Sadr\ J,

pay to defendant No. 3 in future the minimum royalty of R.s. 6,000 instead of Rs. 8,000 as stipulated in the original patta of 11th March 1921 and commission at the rate of la. 9p. a ton in place of 2a. a ton as stipu-lated in the patta of March 21 ...... Unless the plaintiffs pay to the defendant No. 3 Rs. 8,000 within 2 months from this day they shall not be competent to take out execution of this decree, nor shall they be competent to take possession of the land in dispute. The defend-ants 1 and 2 within one month frcm the date of payment of l~s. 8,000 as aforesaid to defendant No. 3 shall execute a new Kabuliyat in favour of the plaintiff in respect of the modified terms stated above, i.e., on the condition to pay commission at the rate of 2a. 6p. per ton ... In the new patta which defendant No. 3 will execute in favour of the plaintiffs he shall embody the condition that the annual minimum royalty will be 11'.s. 6,000 instead of Rs. 8,000 and commission will be at the rate of la. 9p. per ton in place of 2a. per ton as mentioned in the aforesaid patta. If the defendant No. 3 does not execute the patta on the aforesaid modified terms in favour of the plaintiffs within the time aforesaid and both the defendants 1 and 2 also do not execute a kabuliyat on the aforesaid modified terms, then this very rafanama shall be treated as the patta and kabuliyat, and the plaintiffs in accordance with the terms of the rafanama shall pay to defendant No. 3, Rs. 6,000 only as minimum royalty and com-mission at the rate of la. 9p. per ton with respect to 5,800 bighas and shall continue to realise commission at the rate of 2a. 6p. per ton from defendants 1 and 2 who shall remain bound to pay the same." ,......

The answer to the question whether this compromise decree requires registration depends on the legal effect of the changes in the status quo ante of the parties Mangan La,l brought about by the document. A careful analysis Deoshi v. reveals the following alterations :- Moliammaci

(1) In the lease to the Singhs, the rate of royalty or .Uoinul Haqu,4 commission was reduced from 2a. per ton of coal raised ct Oth6ra, -,- to la. 9p. per ton and the minimum royalty was PatanjaU reduced from I'{s. 8,000 to l'{s. 6,000 while the area of Sastr~ J. coal land in their khas possession was reduced by 500 bighas.

(2) In the lease to the Deoshis the rate of royalty or commission was enhanced from 2a. per ton to 2a. 6p.

per ton and this was made payable to the Singhs.

(3) The Singhs and the Deoshis were brought into a new legal relationship, the former accepting the latter as tenants holding the disputed 500 bighas under them in consideration of the latter agreeing to pay the enhanced royalty to the former.

(4) The whole arrangement was made conditional on the Singhs paying l'{s. 8 ,000 to Kumar within 2 months from the date of the compromise, it being expressly provided that the Singhs were not to be en-titled to execute the decree or to take possession of the disputed area of SO::> bighas which evidently had not till then passed into their possession.

Now, sub-section (I) of section 17 of the Registration Act, enumerates five categories of documents of which registration is made compulsory which include" (d) leases of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent;". Sub.section (2) however provided that "nothing in clauses (b) and (c) of sub-section (I) applies to ...... (vi) any decree or order of court." It may be mentioned in passing that this clause was amended with affect from the 1st April, 1930, by the Transfer of Property (Amendment) Supplementary Act, 1929, so as to exclude from the scope of the exception com pro· mise decrees comprising immovable property other than that which is the subject-matter of the suit. But

19~0 the amendment cannot affect the document here in

question which came into existence in 1923. Before Mangan L:il tlie amendment, the clause was held to cover even com-

DJoshi promise decrees comprising immovable property

Mohrimmad which was not the subject matter of the suit : lVide Moin.ul Haque Hemanta Kumari Debi v. Ji.1idnapur Zamindari Co. (1)].

tl Othors. That decision app)ies to the present case and obviates

the objection that because the compromise in question Patanjali covered also the remaining 5,300 bighas which were

Headnote as published in the Digital Supreme Court Reports by the Supreme Court of India. Paragraph references point to the judgment below.

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Judgment

S'astri J. not the subject-matter of the title suit of 1921, it was

outside the scope of the exception in sub-section (2), clause (vi).

The only question, therefore, is whether the com-promise decree is a "lease" [which expression includes "an agreement to lease" by the definition in section 2 (7)] within the meaning of cl. (d) of sub-section (1). It is obvious that if th~ compromise decree falls within clause (d) of sub.section (1) it would not be protected under clause (vi) of sub-sect.ion (2) which excepts only documents falling under the categories (b) and (c) of sub-section (1). The High Court was of opinion that, on a proper construction of the terms of the com-promise, it did not fall under clause (d). Manohar Lall J ., who delivered the leading judgment, observed : "It was a tripartite agreement embodied in the decree of the court and was, therefore, exempt from registra-tion. It will be observed also that so far as the defend-ants were concerned, their possession of the 500 bighas was not interfered with and they still remained in possession as the lessees, but instead of paying the royalty to the plaintiffs it was agreed between all the parties that the defendants would pay the royalty in future to Shibsaran and Sitaram. If the matter had stood there, the learned Advocate for the appellant could not have seriously contested the position, but he vehemently argued that when the agreement was not to pay the same amount of royalty or commission as previously agreed to but an altered amount of royalty and commission, the document should be held to fall within the mischief of section 17 ( 1) ( d) of the

(1) 47 C•I. 485; P.O.

Registration Act. The answer to this contention is, as 1950 I have stated just now, to be found in the Full Bench decision of this court:" [see Mangan Lal Charu Chandra Mitra's Deoshi case (')]. It was there held that a mere alteration of v. the rent reserved does not make the transaction a Mohammad new lease so as to bring it within clause (d) of sub-Moinul Haqu1 section (1). tt Others.

We are unable to share this view. It oversimplifies Patanjali the compromise transaction which, in our opinion, Sastri J. involves much more than a mere alteration of the royalties stipulated for in the previous pattas executed by Kumar. Nor can we accept the suggestion of Mr. Chatterjee for the respondents that the compro-mise operated as an assignment to the Singhs by Kumar of the latter's reversion under the "lease grant-ed to the Deoshis and all that the latter did was to acknowledge the Singhs as their landlords and attorn to them. On this view it was said that the trans-action would not fall under clause (d), al-though it would fall under clause (b) but then would be saved by the exception in clause (vi) of sub-section (2). The argument, however, overlooks that Kumar had leased the area of 5,800 bighas to the Singhs by his patta dated I Ith !\!arch, 1921, and the compromise by providing that the Singhs should pay the reduced royalty of la. 9p. per ton in respect of the whole area preserved Kumar's reversion intact. He could not therefore be deemed to have assigned any part of his interest in 5,800 bighas as landlord to the Singhs who continue to hold the entire extent as tenants under him. 'vVhat the compromise really did was, as stated already, to bring the Singhs and the Deoshis into a new legal relationship as under-lessor and under-lessee in respect of 500 bighas which were the subject-matter of the title suit; in other words, its legal effect was to create a perpetual under-lease between the Singhs and the Deoshis which would clearly fall under clause (d) but for the circumstance that it was to take effect only on condition that the Singh~ paid Rs. 8,000 to Kumar within 2 month::;

IP ~ P, L. J. 2>,5.

1950 thereafter. As pointed out by the Judicial Committee

in H emanta K uinar' s case (1) "An agreement for a Manann Lal lease, which a lease is by the statute declared to

Deas hi include, must, in their Lordships' opinion, be a docu-

'· ment which effects an actual demise and operates as a Mohammad Moi.nul Haque lease ...... The phrase which in the context where it

& Others. occurs and in the statute in which it is found, must in

their opinion relate to some document which creates Patanjali a present and immediate interest in the land." Saatri J,

The compromise decree expressly provides that unless the sum of Rs. 8,000 was paid within the stipulated time the Singhs were not to execute the decree or to take possession of the disputed property. Until the payment was made it was impossible to determine whether there would be any underlease or not. Such a contingent agreement is not within clause (d) and al-though it is covered by clause (b), is excepted by clause (vi) of sub-section (2). \Ve therefore agree with the con-clusion of the High Court though on different grounds and dismiss the appeal with costs.

Appeal dismissed. Agent for the appellant: P. K. Chatterjee.

Agent for the respondent : Sukumar Glzose.

RAJA KAMALA RANJAN ROY

1950 v.

Dec, 1. BAIJNATH BAJORIA.

(SHRI HARILAL KANIA C.J., PATANJALI SASTRI

and DAS JJ.) Conlract~Specific perforn"nce-0.ff:r to purchase leasehold right-Stipulation that lesse'J sho-uld obtain consent of lessor-Lessor ttnreasonably refflsing consent-Lessee, 1vhethe'· relieved of liribility f0 assign-Suit for sp-1cifi~ verformince by purchasftr-Maintain.• abilitr1-Lea.s9 . deed-Covenant " prohibitin1 assignm;nt of lease without l _f!s~or s co:isent, Sit' l i co 1isent, lunv,~v~r, not to b3 11,11reasonably u·i h-hJld in case of respectable p!rso'i "-llieaniru; and effect of co1,>!':1tant.

(1) 47 Ca.I. 48-'i, at p. 494.

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