Appeal No 239 of 1955
Appeal from the Judgment and Decree dated the 30th November 1953 of the former Nagpur High Court in First Appeal No 118 of 1947 arising out of the Judgment and Decree dated the 12th August 109 1947 of the Court of the Additional District Judge Wardha in Civil Suit No 9 A of 1946
M C Setalvad Attorney General for India J B Dadachanji section N Andley and Rameshwar Nath for the appellants
M Adhikari Advocate General for the State of Madhya Pradesh and 1
N Shroff for the respondent
January 21
The Judgment of the Court was delivered by GAJENDRAGADKAR J
This is an appeal by the widow and the minor son of Mangilal defendant 1 and it has been filed with a certificate by the High Court of Judicature at Nagpur
It arises out of a suit filed by the respondent Shrimati Lilabai wo Vrijpalji for the specific performance of a contract to lease or in the alternative for damages and for a declaration against defendant 2 the daughter of defendant 1 that she has no right title or interest in the property in suit
The respondent s case was that defendant I had executed an instrument exhibit P 1 in favour of the respondent by which he had contracted to lease to her in perpetuity in occupany right his four khudkasht lands admeasuring 9519 acres situated in Mouza Mohammadpur in consideration of the debt of Rs 8700
According to the respondent the instrument had provided that if defendant 1 did not repay to her the said debt on June 1 1944 the said contract of lease would be operative on and from that date
Defendant 1 did not repay the loan by the stipulated date and so he became liable to perform and give effect to the said contract of lease on June 1 1944
The respondent repeatedly called upon defendant 1 to perform the said contract but defendant I paid no heed to her demands and so she had to file the present suit for specific performance
The respondent had been and was still ready and willing to specifically perform the agreement and to accept a deed of lease for the lands in question in lieu of the said debt of Rs 8700
Defendant 1 however had been guilty of gross and unreasonable delay in performing his part of the con tract and that had caused the respondent the loss of 110 the benefit of the lease and consequent damage
On these allegations the respondent claimed specific performance of the contract and an amount of Rs 2340 as compensation or in the alternative damages amounting to Rs 11080
To this suit Mst
Durgabai the daughter of defendant I had been impleaded as defendant 2 on the ground that she was setting up her own title in respect of the lands in suit and a declaration was claimed against her that she had no right title or interest in the said lands
Defendant 2 filed a written statement contesting the respondent s claim for a declaration against her but she did not appear at the trial which proceeded exparte against her
In the result defend ant 1 was the only contesting defendant in the proceedings
Several pleas were raised by defendant I against the respondent s claim
He denied the receipt of the consideration alleged by her and he pleaded that the document exhibit P 1 was a bogus sham and collusive document which had been brought into existence for the purpose of shielding his property from
his creditors and it was not intended to be acted upon
It was also urged by him that the said document if held to be genuine was an agreement to lease under section 27 of the Indian  and since it was not registered it was inadmissible in evidence
The learned trial judge framed appropriate issues on these pleadings and found against defendant I on all of them
Accordingly a decree was passed ordering defendant 1 to execute a lease deed in respect of the fields mentioned in the plaint on a proper stamp paper in occupancy right in favour of the respondent and to put her in possession of them
A decree for the payment of Rs 2316 by way of compensation was also passed against him
The declaration claimed by respondent against defendant 2 was likewise granted
This decree was challenged by defendant 1 by his appeal before the High Court of Judicature at Nagpur
Pending the appeal defendant I died and his widow and his minor son came on the record as his 111 legal representatives and prosecuted the said appeal
The High Court held that the document was supported by consideration that it was not an agreement to lease under section 27 of the Indian and therefore it did not require registration and was admissible in evidence
In the result the decree passed by the trial court was confirmed and defendant 1 s appeal was dismissed
The present appellants then applied to the High Court for leave to appeal to this Court and the High Court granted leave because it held that the basic question involved in the decision of the appeal was the legal effect of exhibit P 1 and that the construction of a document of title is generally regarded as a substantial question of law
It is with this certificate that the present appeal has come before this Court and it raises two questions for our decision Is the document exhibit P 1 an agreement to lease under section 27 If not does it require registration under section 17 of the said Act  All other issues which arose between the parties in the courts below are concluded by concurrent findings and they have not been raised before us
Before dealing with these points we must first consider what the expression  an agreement to lease  means under section 27 of the Indian  hereinafter referred to as the Act
Section 27 provides that a lease includes a counterpart kabuliyat an undertaking to cultivate and occupy and an agreement to lease
In Hemanta Kumari Debi vs Midnapur Zamindari Co Ltd 1 the Privy Council has held that  an agreement to lease which a lease is by the sta tute declared to include must be a document which effects an actual demise and operates as a lease 
In other words an agreement between two parties which entitles one of them merely to claim the execution of a lease from the other without creating a present and immediate demise in his favour is not included under section 2 sub section
In Hemanta Kumari Debi s case 1 a petition setting out the terms of an agreement in compromise of a suit stated as one of the 1 1919 L R 46 1 A 240
112 terms that the plaintiff agreed that if she succeeded in another suit which she had brought to recover certain land other than that to which the compromised suit related she would grant to the defendants a lease of that land upon specified terms
The petition was recited in full in the decree made in the compromised suit under section 375 of the Code of Civil Procedure 1882
A subsequent suit was brou ght for specific performance of the said agreement and it was resisted on the ground that the agreement in question was an agreement to lease under section 27 and since it was not registered it was inadmissible in evidence
This plea was rejected by the Privy Council on the ground that the document did not effect an actual demise and was outside the provisions of section 27
In coming to the conclusion that the agreement to lease under the said section must be a document which effects an actual demise the Privy Council has expressly approved the observations made by Jenkins C J in the case of Panchanan Bose vs Chandra Charan Misra 1 in regard to the construction of section 17 of the Act
The document with which the Privy Council was concerned was construed by it as  an agreement that upon the happening of a contingent event at a date which was indeterminate and having regard to the slow progress of Indian litigation might be far distant a lease would be granted  and it was held that  until the happening of that event it was impossible to determine whether there would be any lease or not 
This decision makes it clear that the meaning of the expression  an agreement to lease   which in the context where it occurs and in the statute in which it is found must relate to some document that creates a present and immediate interest in the land 
Ever since this decision was pronounced by the Privy Council the expression  agreement to lease  has been consistently construed by all the Indian High Courts as an agreement which creates an immediate and a present demise in the property covered by it
It would be relevant now to refer to the observations 1 Cal
113 of Jenkins C J in the case of Panchanan Bose 1
In that case a solehnama by which no immediate interest in immoveable property was created was held not to amount to a lease within the meaning of cl
d of section 17 of the Act but merely an agreement to create a lease on a future day
 Such a document  it was observed  fell within cl
h of section 17 and as such was admissible in evidence without registration 
Jenkins C J held that  on a fair reading of the document no immediate interest was created there was no present demise and the document was merely an agreement to create a lease on a future day the terms of which were to be defined by documents to be thereafter executed 
 This being so  said the learned C J  I think the appellants I rave rightly contended before us that the document was admissible in evidence as it falls within cl
h of section 17 of the Indian 
This decision would show that an agreement which creates no immediate or present demise was not deemed to be a lease under section 27 and so it was hold to fall within section 17h of the Act and this view has been specifically affirmed by the Privy Council in Hemanta Kumari Debi s case 2
It is true that in Narayanan Chetty vs Muthiah Servai 3 a Full Beach of the Madras High Court had held that an agreement to execute a sub lease and to get it registered at a future date was a lease within section 3 of the Indian of 1877 III of 1877 and was compulsorily registrable under el
d of section 17
Such an agreement to grant a lease which requires registration it was held affects immoveable property and cannot be received in evidence in a suit for specific performance of an agreement
The question which was referred to the Full Bench apparently assumed that the agreement in question required registration and the point on which the decision of the Full Bench was sought for was whether such an agreement can be received in evidence in a suit for specific performance 1 where possession is given in pursuance of an agreement and 2 where it is not and the Full Bench 1 Cal 808
2 1919 LR 46 IA 240
3 Mad
15 114 answered this question in the negative  An agreement to lease  it was observed in the judgment of the Full Bench  is expressly included in the definition of the lease in the while it cannot be suggested that an agreement to sell falls within any definition of sale 
It is clear that the question about the construction of the words  agreement to lease  was not specifically argued before the Full Bench and the main point considered was the effect of the provisions of section 49 of the Act
In that connection the argument had centred round the effect of the provisions of cl
h of section 17 of the and section 54 of the Transfer of Property Act
The Full Bench took the view that in enacting section 49 of the Act 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 immoveable property but only created an
obligation to transfer the property
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 cl 2 v of section 17 but an agreement in writing to let falling within cl
d of section 17 is not
That is why according to the Full Bench such an agreement cannot be received in evidence of the transaction which affects the immovable property comprised therein
Thus this decision does not directly or materially assist us in construing the expression  agreement to lease 
Besides the said decision has not been followed by the Madras High Court in Swaminatha Mudaliar vs Ramaswami Mudaliar 1 on the ground that it can no longer be regarded as good law in view of the decision of the Privy Council in Hemanta Kumari Debi s case2 and as we have already pointed out all the other High Courts in India have consistently followed the said Privy Council decision
The learned Attorney General has however contended before us that the correctness of the decision of the Privy Council in Hemanta Kumari Debi s case 2 is open to doubt and he has suggested that we 1 Mad 399
2 1919 LR 46 I A 240
115 should re examine the point on the merits afresh
We do not think there is any substance in this contention because if we may say so with respect the view taken by the Privy Council in the said case is perfectly right
Section 171 of the Act deals with documents of which registration is compulsory
It is obvious that the documents falling under cls
a b c and e of sb section
I  are all documents which create an immediate and present demise in immovable properties mentioned therein
The learned Attorney General s argument is that cl
d which deals with leases does not import any such limitation because it refers to leases of immoveable properties from year to year or any term exceeding one year or reserving a yearly rent and the Act deliberately gives an inclusive definition of the term lease  in section 27
This argument however fails to take into account the relevant provisions of the Transfer  of Property Act
Section 4 of the said Act provides that section 54 paragraphs 2 and 3 59 107 and 123 shall be read as supplemental to the Indian 
Section 107 is material for our purpose
Under this section a lease of immoveable property from year to year or for any term exceeding one year or reserving a yearly rent can be made only under a registered instrument
This section also lays down that where a lease of immoveable property is made by a registered instrument such instrument or where there are more instruments than one each instrument shall be executed by both the lessor and the lessee
It would be noticed that if section 107 has to be read as supplemental to the Act the definition of the word I lease  prescribed by section 105 would inevitably become relevant and material and there is no doubt that under section 105 a lease of immoveable property is a transfer of right to enjoy such property made in the manner specified in the said section
Therefore it would not be right to assume that leases mentioned in cl
d of section 17 sub section
1 would cover cases of documents which do not involve a present and immediate transfer of leasehold rights
It would thus be reasonable to hold that like the instruments mentioned in cls
a b and c of section 171 leases also are instruments 116 which transfer leasehold rights in the property immediately and in presenti
We have already referred to the requirement of section 107 of the Transfer of Property Act that a lease must be executed both by the lessor and the lessee
It may be pertinent to point out that an instrument signed by the lessor alone which may not be a lease under section 107 may operate as an agreement to lease under section 27 of the Act
The legislative history of the provisions of section 172v may perhaps be of some assistance in this connection
Section 17h of Act III of 1877 which corresponds to the present section 172 v did not appear in the earlier Registration Acts of 18641866 and 1871
Its introduction in Act III of 1877 became necessary as a result of the decision of the Privy Council in Fati Chand Sahu vs Lilambar Singh Das 1 in which it was held that an agreement to sell immoveable property for Rs 22500 coupled with an acknowledgment of the receipt of Rs 7500 and a promise to execute a sale deed on the payment of the balance was compulsorily registrable under section 17 of the Act 2
Section 17h was therefore enacted in 1877 to make it clear that a document which does not itself create an interest in the immoveable property does not require registration even if it expressly contemplates and promises the creation of that interest by a subsequent document in other words contracts of sale and purchase of which specific performance would be granted under certain circumstances fall within this provision and would no longer be governed by the said decision of the Privy Council in the case of Fati Chand Sahu vs Lilambar Singh Das 1
Thus the policy of the Legislature clearly is to exclude from the application of cls
b and c of section 171 agreements of the said character
On principle there is no difference between such agreements of sale or purchase and agreements to lease
Under both classes of documents no present or immediate demise is made though both of them may lead to a successful claim for a specific performance
That is why the Privy Council observed in the 1  14 M L A 129
2 Act XX of 1866
117 case of Hemanta Kumari Debi 1 that the context and the scheme of the statute justified the view taken by Jenkins C J in the case of Panchanan Bose 2
It may also be relevant to bear in mind that the other documents which are included within the word I lease  by section 27 of the Act support the same conclusion
A counterpart as it is usually understood is a writing by which a tenant agrees to
pay a specified rent for the property let to him and signed by him alone
It is thus in the nature of a counterpart of a lease and as such it is included within the meaning of the word I lease  under section 27
Same is the position of a kabuliyat and an undertaking to cultivate or occupy
In other words it is clear that all the four instruments which under the inclusive definition of section 27 are treated as leases satisfy the test of immediate and present demise in respect of the immoveable property covered by them
We must therefore hold that the expression  an agreement to lease  covers only such agreements as create a present demise
Let us now proceed to deal with the question as to whether the document exhibit P 1 constitutes  an agreement to lease It purports to be a receipt executed in favour of the respondent by defendant I and bear a four anna revenue stamp
 I have this day giver to you  says the document  the land described below which is owned by me
Now you have become occupancy tenant of the same
You may enjoy the same in any way you like from generation to generation
My estate and heirs or myself shall have absolutely no right thereto
You shall become the owner of the said land from date 1 6 1944
1 will have absolutely no right thereto after the said date 
The the document proceeds to mention the properties and describes them in detail and it adds  all the above fields are situate at Mouza Mohammadpur mouz No 312 tahsil Arvi district Wardha
The estat described above has been given to you in lieu of you Rs 8700 due to you subject to the condition that case your amount has not been paid to you on date 1 6 1944 you may fully enjoy the estate describe 1 1919 LR 46 IA 240
2 Cal
118 above in any way you like from generation to generation 
The question for our decision is Does this document amount to an agreement to lease under section 27 of the Act  In construing this document it is necessary to remember that it has been executed by laymen without legal assistance and so it must be liberally construed without recourse to technical considerations
The heading of the document though relevant would not determine its character
It is true that an agreement would operate as a present demise although its terms may commence at a future date
Similarly it may amount to a present demise even though parties may contemplate to execute a more formal document in future
In considering the effect of the document we must enquire whether it contains unqualified and unconditional words of present demise and includes the essential terms of a lease
Generally if rent is made payable under an agreement from the date of its execution or other specified date it may be said to create a present demise
Another relevant test is the intention to deliver possession
If possession is given under an agreement and other terms of tenancy have been set out then the agreement can be taken to be an agreement to lease
As in the construction of other documents so in the construction of an agreement to lease regard must be had to all the relevant and material terms and an attempt must be made to reconcile the relevant terms if possible and not to treat any of them as idle surplusage
The learned Attorney General contends that this document is not a contingent grant of lease at all
According to him it evidences a grant of lease subject to a condition and that shows that a present demise is itended by the parties
He naturally relies upon the opening recitals of the document
According to him when the document says that defendant I has given to the respondent the land described below and that the respondent has become occupancy tenant of the same it amounts to a clear term of present demise
A similar recital is repeated in the latter part of the document where it is stated that the estate described 119 above has been given to the respondent in lieu of Rs 8700 due to her
In our opinion it would be unreasonable to construe these recitals by themselves apart from the other recitals in the document
We cannot lose sight of the fact that the document expressly states that the respondent shall become the owner of the land from 1 6 1944 and that defendant I  would have no title over it after that date
This recital also is repeated in the latter part of the document and it makes the intention of the parties clear that it is only if the amount of debt is not rapid by defendant I on the date specified that the agreement was to come into force
In other words reading the document as a whole it would be difficult to spell out a present or immediate demise of the occupancy rights in favour of the respondent
In this connection the fact that the document is described as a receipt may to some extent be relevant
It is clear that by executing this document the defendant wanted to comply with the respondent s request for acknowledging the receipt of the amount coupled with the promise that the amount would be repaid on 1 6 1944
The defendant also wanted to comply with the respondent s demand that if the amount was not repaid on the said date he would convey the occupancy rights in his lands to her
Besides it is significant that the document does not refer to the payment of rent and does not contemplate the delivery of possession until 1 6 1944
If the document had intended to convey immediately the occupancy rights to the respondent it would undoubtedly have referred to the delivery of possession and specified the rate at which and the date from which the rent had to be paid to her
The stamp purchased for the execution of the document also incidentally shows that the document was intended to be a receipt and nothing more
Under section 2 of the Central Provinces Land Revenue Act 1917 C P II of 1917 an agricultural year commences on the first day of June and it is from this date that the agreement would have taken effect if defendant I had not repaid the debt by then
It is clear that the respondent was not intended to be treated as an 120 occupancy tenant between the date of the document and June 1 1944
During that period the agreement did not come into operation at all
In other words it is on the contingency of defendant s failure to repay the amount on June 1 1944 that the agreement was to take effect
We have carefully considered the material terms of the document and we are satisfied that it was not intended to and did not effect an actual or present demise in favour of the respondent
In our opinion therefore the High Court was right in holding that the document was not an agreement to lease under section 27 of the Act and so did not require registration
We would now briefly refer to some of the decisions on which the learned Attorney General relied in support of his construction of the document
In Purmananddas Jiwandas vs Dharsey Virji 1 the agreement between the parties had expressly provided that the lease in question was to commence from October 1 1882 though the agreement was executed seven days later that the rent was to commence from that day and the rent then due was to be paid by the next day
It is in the light of these specific terms that the Bombay High Court held that the relevant words in the document operated as an actual demise
None of these conditions is present in the document with which we are concerned
Similarly in Pool vs Bentley 2 by the instrument in question Poole had agreed to let unto Bentley and Bentley had agreed to take all that piece of land described for the term of 61 years at the yearly rent of pound 120 free and clear of all taxes the said rent to be paid quarterly the first quarter s rent within 15 days after Michaelmas 1807 and that in consideration of the lease Bentley had agreed within the space of four years to expend and lay out in 5 or more houses of a third rate or class of building 2000 and Poole had agreed to grant a lease or leases of the said land and premises as soon as the said 5 houses were covered in
In dealing with the construction of this document Lord 1 Bom
2   121 Ellenborough C J observed that the rule to be collected from the relevant decisions cited before him was that the intention of the parties as described by the words of the instrument must govern the construction and that the intention of the parties to the document before him appeared to be that the tenant who was to have spent so much capital upon the premises within the first four years of the term should have a present legal interest in the term which was to be binding upon both parties though when certain progress was made in the building a more formal lease or leases might be executed
This decision only shows that if the intention is to effect a present demise the fact that a further formal document is contemplated by the parties would not detract from the said intention
It would however be noticed that the document in that case contained a stipulation for the payment of the rent and the tenant was to be let into possession immediately
This case also does not assist the appellant
In Satyadhyantirtha Swami vs Raghunath Daji 1 the contract of lease was contained in two documents which showed that the lands were being cultivated by Appaji and Ravji who had signed the first document
and that they were authorised to continue  in occupation of the lands on terms mentioned in the first document
The argument that a part of the agreement would not come into operation till some years later it was held did not operate to make the document other than a present demise
It is difficult to appreciate how this decision can assist us in construing the present document
In Balram vs Mahadeo 2 the Nagpur High Court was dealing with an instrument which purported to be a receipt and the terms of which seemed to contemplate the execution of a sale deed in respect of the properties covered by it
Even so the material clause was that I it is agreed to give to you both the above fields in occupancy rights 
It was held that on a fair and reasonable construction the document was 1 AIR 1926 Bom
2 ILR 16 122 intended to affect a transfer of the occupancy right in presenti and was as such an agreement to lease
No doubt as observed by Bose J  on a superficial view of the document it would not appear to be an agreement to lease
But in construing a transaction one has to look beneath the verbiage and ascertain what are the real rights which are being transferred
When that is done we consider that this document is an agreement to lease despite the fact that it calls itself a receipt and speaks throughout of a sale 
It is unnecessary to consider the merits of the conclusion rea ched by the Nagpur High Court in this case
It would be enough to say that the said decision would not afford any assistance in construing the document before us
Besides it is obvious that in construing documents the usefulness of the precedents is usually of a limited character after all courts have to consider the material and relevant terms of the document with which they are concerned and it is on a fair and reasonable construction of the said terms that the nature and character of the transaction evidenced by it has to be determined
In our opinion the High Court was right in holding that the instrument exhibit P 1 was not an agreement to lease under section 27 of the Act
The result is the appeal fails and must be dismissed with costs
Appeal dismissed


Summary:
The appellant s father let out the disputed building wherein the tenant respondent carried out the hotel business
The appellant landlord filed an eviction petition on 15181 before the Rent Controller stating that after his retirement from service on 3091981 he wanted to settle down in that town and as he had no other house to reside the disputed building was required by him bona fide for his occupation that the respondent tenant was using the property in such a manner as to materially and permanently reduce its value utility and purpose
The respondent contended that the building was not suitable for residential purposes that the appellant had a house and plot in his wife s name within the town that there was a lot of vacant land on the back side of the tenanted building which was suitable for house construction and that the property was not being used in such a way as to reduce its utility
The trial court dismissed the eviction petition of the landlord holding that as he failed in proving his bona fide need of the building the landlord was not entitled to an order of eviction under Section 113 of the 71 Kerala Buildings Lease  Rent Control Act 1965 and as the landlord failed to prove that the tenant was using the building in such a way to destroy its value and utility he was not entitled to an order under section 114ii of the Act
On appeal the Appellate Authority reversed the order of the Rent Controller
The High Court in revision set aside the order of the Appellate Authority against which the present appeal by special leave was filed before this Court by the landlord
On the question whether the respondent was liable to be evicted on the ground of bona fide need of the appellant for his personal occupation under section 113 of the Act this Court allowing the landlord s appeal HELD11
The scope of the revisional jurisdiction conferred under section 20 is wider than that conferred under section 115 CPC
But at the same time a revision under section 20 cannot be equated with an appeal
75 C 12
The revisional power conferred on the High Court is essentially a power of superintendence and despite the wide language employed the High Court should not interfere with the findings of fact of the subordinate authority merely because it does not agree with the said findings
75 E Dattonpant Gopalverao Devakate vs Vithabrao Maruthirao Janagaval 1975 Supp
SCR 67 Ms Sri Raja Lakshmi Dyeing Works  Ors
vs Rangaswamy Chettiar AIR 1980 SC 1253 followed
The revisional court must be reluctant to embark upon an independent reassessment of the evidence and to supplant a conclusion of its ownso long as the evidence on record admitted on and supported the one reached by the court below
75 F Rajbir vs section Chokesiri  Co at p37 followed
The question whether the building is required bona fide by the appellant for his own residence is primarily one of fact and the finding recorded by the Appellate Authority after considering the evidence on 72 record could not be interfered with by the High Court in exercise of the revisional jurisdiction under Section 20 of the Act because it could not be said that the said finding recorded by the Appellate authority was not supported by the evidence on record
77 E 22
The fact that the appellant has been living with his son in the house belonging to him son cannot head to the inference that the claim of the appellant that he want to live in a house of his own is false and not bona fide
The same is true about the building in question not having the requisite facilities and being not in a fit condition for residence because the appellant can make suitable repairs and alterations in the same to make it fit for residential purposes
78 B C 23
The claim of the landlord that he needs the building bona fide for his personal occupation cannot be negatived on the ground the the building requires repairs and alterations before the landlord can occupy the same
78 D 24
There is no prohibition that a landlord must occupy the house for residence without making any alterations in it
78 H 79A Devaky vs Krishnankutty  approved
Ramniklal Pitambardas Mehta vs Indradaman Amratlal Sheth   followed
Before passing a decree for eviction on the ground of bona fide need of the landlord under section 113 of the Act it was necessary for the Appellate Authority to consider whether the tenant was entitled to the benefit of the second proviso to sub section 3 of section 11 of the Act which precludes the passing of an order for eviction of a tenant who is depending for his livelihood mainly from the trade or business carried on in such building and there is no other suitable building available in the locality for him to carry on such trade or business
79 C 32
Since the Appellate Authority has omitted to consider the matter from this angle the matter should be remanded to the Appellate Authority for considering the question whether the respondent can invoke the protection of the second proviso to section 113 of the Act
79 G 80A 73