Sheth Maneklal Mansukhbhai Vs. Messrs.
Hormusji Jamshedji Ginwalla and Sons [1950] INSC 6 (21 March 1950)
MAHAJAN, MEHR CHAND FAZAL ALI, SAIYID
MUKHERJEA, B.K.
CITATION: 1950 AIR 1 1950 SCR 75
CITATOR INFO :
RF 1977 SC2425 (5)
ACT:
Transfer of Property Act (IV of 1882), 8.
53-A--Agreement to lease evidenced by correspondence--Lessee put in
possession--Acceptance of rent for several years--No registered lease
deed--Suit for ejectment of lessee as trespasser--Maintainability--Doctrine of
part performance.
HEADNOTE:
The predecessor in interest of the defendant,
being desirous of putting up a factory in certain plots of land situated within
a Taluqdari estate which was under the management of the Government under the
Gujarat Taluqdars Act, 1888, applied in writing to the Taluqdari Settlement
Officer for a permanent lease of the plots. The Taluqdari Officer agreed to
grant a lease on certain terms subject to the sanction of the Government and
forwarded a letter to the Government stating the offer to take the plots on
lease, his provisional acceptance of the same subject to the sanction of the
Government and the terms of the lease and by a Resolution dated 5th September,
1917, the Government granted the sanction. The defendant's predecessor was put
in possession and though a formal lease deed was not executed and registered,
the Taluqdari Officer and after the release of the estate by the Government,
the agent of the taluqdar, and the plaintiffs who came in as ijaradars
continued to receive the agreed rent up to 1939.. In 1933 the plaintiffs instituted
a suit to eject the defendant alleging that he was a. mere trespasser as there
was no registered lease deed:
Held, that the correspondence which passed
between the defendant's predecessor-in-title and the Taluqdari Officer, the
letter sent by the latter to the Government, and the Resolution of the
Government dated 5th September, 1917, proved that there was a contract in
writing to grant a lease on the terms.stated in the Taluqdari Officer's letter,
and as the defendant's predecessor was put in possession in furtherance of this
contract and the rents agreed upon were accepted for several years, s. 53-A of
the Transfer of Property Act was applicable to the case and the plaintiffs were
not entitled to eject the defendant.
Judgment of the Bombay High Court reversed.
APPEAL from the High Court of Judicature at
Bombay: Appeal No. XXXVII of 1949.
This was an appeal from a judgment and decree
of the Bombay High Court dated 9th March, 1943, in Second Appeal No. 717 of
1940, varying the decree of the Assistant Judge, Ahmedabad, in Appeal No. 173
of 1936 reversing the decree of the joint Sub-Judge, Ahmedabad, in Suit No. 830
of 1933.
R.J. Thakur, for the appellant.
Nanak Chand Pandit, (Diwan Charanjit Lal,
with him), for the respondents.
1950. March 21. The judgment of the Court was
delivered by MAHAJAN J .--This is an appeal from the judgment and decree of the
High Court of Bombay dated 9th March 1943 and made in Second Appeal No. 717 of
1940 varying the decree of the Assistant Judge, Ahmedabad, in Appeal No. 173 of
1936 reversing the decree of the Joint Sub-Judge, Ahmedabad, in Suit No. 830 of
1933.
The suit out of which this appeal arises was
filed by the respondent firm in ejectment to recover possession of survey Nos.
222, 223, 225 and 226 situate in Rampura in Ahmedabad district and for mesne
profits, as early as July, 1933, and during its 17 years' span of life it had a
somewhat chequered career. Those responsible for drawing up the pleadings did
not take pains to comprehend correctly as to what they were about and the whole
litigation was conducted in a slovenly and slipshod manner. Evidence which
should have been produced at the beginning was allowed to be produced at a much
later stage after the case went back on remand and the suit was determined by
the Assistant Judge on fresh issues and fresh materials. It was in this
confused state of the record that it was eventually decided by the High Court
and its judgment is by no means satisfactory, The long time taken in deciding
the suit which involved determination of a few simple issues is such as is
calculated to bring into ridicule the administration of justice.
77 There is a talukdari estate called the
Bhankoda estate in Viramgam taluka in Ahmedabad district. It is jointly owned
by several talukdars in different shares and comprises twelve villages one of
which is Rampura in which the suit lands are situate. By Government Resolution
No. 8170, dated 30th August 1912, the estate was taken under Government
management under section 28 of the Gujarat Talukdars Act (Bombay Act VI of
1888). The firm of Shah Manilal Maganlal and Bros. (predecessors in interest of
the appellant) desired to erect a ginning factory on survey Nos. 228, 225, and
226 and with that object approached the Talukdari Settlement Officer for a
permanent lease of these survey numbers. The said officer agreed to grant a
lease subject to sanction of Government. By Resolution No. 10795 of 1917 dated
5th September 1917 the Government of Bombay granted the requisite sanction.
Exhibit 181 is a certified copy of the letter from the Chief Secretary to
Government to the Commissioner and to the Talukdari Settlement Officer and in
detail it mentions the various steps taken to effect the transaction.
On 9th December 1916 an application was made
by Shah Manilal Maganlal in writing signed by him to the Talukdari Settlement
Officer offering to take a permanent lease of the above mentioned survey
numbers on an annual rental of Rs. 290 for the purpose of erecting a ginning
factory. On 12th July 1917 the said officer accepted provisionally this offer
after taking into consideration the objections raised by some of the talukdars
in respect of the grant of a lease.
He submitted the papers to government with
the following recommendations :-"As the petitioner was in urgent need to
start operations during the current ginning season I have in anticipation of
Government sanction permitted him to enter upon the land and have the honour to
approach you for sanction under section 27 (A) of the Court of Wards Act, the
provisions of which have been made applicable to Talukdari Estates by section
29 (G) of the Gujarat Talukdars Act," 78 The conditions of the lease agreed
upon by the parties were annexed with this letter and a copy of the offer was
also sent to Government. Ex. 181 recites the contents of the offer and states
the undertaking given by the lessee. There is intrinsic evidence within its
contents to show that these writings were signed by the proposer. The Talukdari
Settlement Officer in a signed writing accepted the offer and sent it for
Government sanction. It further appears that he communicated his acceptance to
the lessee and agreed to give a lease if Government gave sanction. The survey
numbers in question were in possession of tenants and it was agreed that the
lessee would take possession after making private settlements with them. It was
also agreed that if no such private arrangement could be made, then the
settlement officer would take steps to issue ejectment notice against the
tenants. On 20th July, 1917, the Commissioner forwarded the papers to
Government with his recommendations and the Government on 5th September, 1917,
sanctioned the arrangement agreed to by the Talukdari Settlement Officer with
Shah Manilal Maganlal. The sanction order is signed by the Chief Secretary to
the Government and it contains an endorsement of its having been sent to the
officers concerned. It is thus clear that a binding agreement to lease the
survey numbers in question was effected between the Talukdari Settlement
Officer and Shah Manilal Maganlal with the sanction of the Government. Though a
draft of a formal deed of lease was prepared, no such document was formally
executed or registered for reasons which it is not necessary to state herein.
Soon after the agreement the lessee took
possession of the survey numbers in suit and put up thereupon a ginning and a
pressing factory, a bungalow, engine rooms and other structures. He tendered
the agreed rent to the Talukdari Settlement Officer who received it from him.
He continued receiving it for about two years when the estate was released from
the management of the Government and came under the management of the talukdars.
The manager appointed by the talukdars continued to receive rent from the
lessee as had been settled by the Talukdari Settlement Officer.
79 On 4th May, 1924, a possessory mortgage of
the ginning factory along with all its buildings was effected by Shah Manilal
Maganlal in the sum of Rs. 1,40,000 in favour of the defendant. The mortgage
included in the schedule of the mortgaged property some other property as
'well. The two contestants in the suit, the defendant and the plaintiffs,
acquired their rights in this property during the years 1924-25. The defend ant
came in as a mortgagee as above stated, while the plaintiffs came in as
ijaradar and assignee of certain mortgage rights. The plaintiffs since then
have been receiving the rent according to the grant made by the Talukdari
Officer. In the year 1933 the appellant purchased the equity of redemption of
the suit property at a court auction and became vested with all the rights of
Manilal Maganlal in this property, the value of which has now been estimated in
the neighbourhood of Rs. 38,000.
In the year 1933 the plaintiffs discovered
that the defendant had no registered lease in his favour and therefore in law
he was not entitled to the rights of a permanent tenant in respect of the
survey numbers in dispute. They therefore instituted the present suit for
ejectment of the defendant. In the 2nd and 3rd paragraphs of the plaint it was
admitted that in .the course of the correspondence with the Government of
Bombay a lease was negotiated between the firm of Shah Manilal Maganlal and the
Talukari Settlement Officer in respect of the survey numbers in dispute for a
period of fifty years at an annual rental of Rs. 290, but it was stated that
because Manilal Maganlal did not execute a formal registered lease they were in
possession as trespassers. In the 4th paragraph the authority of the Talukdari
Settlement Officer to grant the lease was also challenged. In the 8th paragraph
it was said that the plaintiffs received the amount of the lease up to 31st July
1932 and that no notice was necessary to be given, the position of the
defendant being that of a trespasser. It was however alleged that a notice was
given on 25th December 1930, 11 80 The suit was defended on a number of
grounds,inter alia, it was pleaded that the plaintiffs had no right to sue in
ejectment, not being the landlord inasmuch as they had not obtained any right
in the land itself and had not acquired complete title by an assignment of the
whole of the interest of the talukdars in the survey numbers in dispute. It was
pleaded that the defendant was a permanent tenant of the survey numbers and
that the plaintiffs' own conduct debarred them from claiming ejectment.
The trial Judge decreed the suit on the
finding that as no written lease was forthcoming it should be deemed to be
non-existent. It was said that no efforts had been made to show that the
Settlement Officer had sanctioned with the approval of the Government a
permanent lease in respect of survey Nos. 223 and 225 to Shah Manilal Maganlal.
In the concluding part of the judgment it was remarked that the doctrine of
equitable part performance could not apply to the present case. Though no
specific issue was raised on this point, the matter seems to have been argued
at some stage before the trial Judge on facts found or admitted.
There was an unsuccessful effort to obtain a
review of this decision on the ground of discovery of fresh materials.
Thereafter the matter was taken to the court of appeal and it was alleged in
ground No. 3 that the Subordinate Judge had erred in not considering the
position created in the case by the equitable rule of law embodied in section
53-A of the Transfer of Property Act. On 30th July, 1938, the appellate court
made an order of remand under Order XLI, Rule 25, and called for a report on
the following two issues:(1) Whether the plaintiff was a mortgagee in occupation
of S. Nos. 222, 223, 225 and 226 ? (2) Whether the suit was bad for non-joinder
of parties ? The trial Judge reported on the remand issues against the
plaintiffs. He also admitted in evidence a number of documents produced after
remand and one of these is Ex. 181.
A point was raised that documents produced
after remand Were not relevant to the issues remanded 81 and should not be
admitted. This contention was overruled.
The Assistant Judge allowed the appeal on
27th April, 1940.
He held that the plaintiffs had failed to
establish their right to maintain the suit either as ijaradars or as assignees
of mortgage rights. In para. 21 of his judgment he observed as follows :-"Ex.
181 shows that the terms of the lease have been reduced to writing though no
regular lease appears to have been executed. On the question whether the lease
is binding on the plaintiff, I think section 53-A of the Transfer of the
Property Act is a complete answer. Ex. 181 shows that the Talukdari Settlement
Officer, with the sanction of the Government, contracted to lease out these
lands. The writing is signed by the Government. The terms of the lease can be
ascertained clearly from Ex. 181. It is not denied that the defendant's
predecessor-in-title was put in possession of this property in performance of
that contract. Also the acceptance by the Talukdari Settlement Officer as well
as by the plaintiff of the rent of the property as fixed by that contract shows
that. the possession of the defendant and his predecessor-in-title was in part
performance of the contract of lease. Admittedly, there is no registered lease.
The conditions of section 53-A of the Transfer of Property Act are fully
satisfied and the plaintiff cannot, therefore, eject the defendant on the
ground that there is no registered lease." Further on the learned Judge
said that section 53-A of the 'Transfer of Property Act embodied the doctrine
of estoppel and a plea to that effect had been taken inasmuch as the defendant
had pleaded that the plaintiffs were estopped by their conduct from asking for
possession and that therefore no separate issue was raised on this point.
The unsuccessful plaintiffs went up in second
appeal against this decision to the High. Court of Bombay. The High Court
allowed the appeal and modified the decree of the Assistant Judge. It decreed
the plaintiffs' suit in respect of survey Nos. 223 and 225 and dismissed the
suit in respect of survey Nos. 222 and 226, 82 On the question of the
plaintiffs' title to maintain the suit the High Court reached the following
decision:"If it were necessary we would hold that the plaintiff has
sufficiently proved that it is entitled to maintain this suit in its capacity
as ijaradar as well as assignee from the mortgagees. But we think even apart
from that, plaintiff is entitled to bring this suit because on the defendant's
own admission he has paid rent to the plaintiff for three of the suit fields, viz.,
survey Nos. 223, 225, and 226, and that too not the interest of 84 Dakdas in
them but for all the 100 Dakdas. In fact, ever since the plaintiff came on the
scene the defendant has treated the plaintiff as the landlord as regards these
three survey numbers, and in the present suit, therefore, the defendant cannot
dispute the plaintiff's right to sue." In a later part of the judgment it
was observed that in any case Ginwalla as the manager of the plaintiff firm
would be entitled to continue the present suit as receiver. On the second
question the learned judges of the High Court observed as follows :"We do
not think it necessary to decide whether if there had been a signed contract by
the transferor in the present case, it would have fallen under section
53-A,because, in our opinion, the correspondence Which is summarized in the
Government Resolution cannot be regarded as evidence of the contract, and
secondly, the terms of the contract also cannot be deduced from the
correspondence with any reasonable certainty. We, therefore, hold that the
Government Resolution on which the defendant relies is no evidence of the
writing of a contract referred to in section 53-A of the Transfer of Property
Act, and apart from that the defendant has no legal basis on which he can claim
to hold the land either as a permanent lessee or for a particular period."
The principal questions canvassed in this appeal are, whether the plaintiff
firm has proved its title to maintain the present suit in ejectment against the
defendant,' and whether the defendant is entitled to the benefit of the
provisions of sec. 53-A of the Transfer of Property Act. The question as to the
maintainability of the suit' 83 against the defendant without a proper notice
was raised before the High Court but permission to argue it was refused because
the matter had not been raised in either of the lower Courts.
The appeal was elaborately argued before us
by the learned counsel for the parties, but in our view, it is ' not necessary
to consider and decide all the points urged because we consider that the
Assistant Judge was right in entertaining and giving effect to the plea under
sec. 53-A of the Transfer of Property Act and we are satisfied that no
substantial grounds existed for reversingthat decision in second appeal. This
section introduced in the Transfer of Property Act in 1929 is in these terms :-"Where
any person contracts to transfer for consideration any immovable property by
writing signed by him or on his behalf from which the terms necessary to
constitute the transfer can be ascertained with reasonable certainty, and the
transferee has, in part-performance of the contract, taken possession of the
property or any part thereof ...... and has done some act in furtherance of the
contract, and the transferee has performed or is willing to perform his part of
the contract, then, notwithstanding that the contract, though required to be
registered, has not been registered ...... the transferor or any person
claiming under him shall be debarred from enforcing against the transferee and
persons claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right expressly
provided by the terms of the contract ...... ".
The section is a partial importation in the
statute law of India of the English doctrine of part-performance. It furnishes
a statutory defence to a person who has no. registered title deed in his favour
to maintain his possession if he can prove a written and signed contract in his
favour and some action on his part in part-performance of that contract. In
'order to find whether the defendant in the present case has satisfied the
conditions of the 84 section, it has to be held proved that the Talukdari
Settlement Officer contracted to give a lease of the survey numbers in suit to
Manilal Maganlal by a writing signed by him and that from this writing the
terms of the tenancy can be ascertained with reasonable certainty. It has
further to be held established that .the transferee took possession of the
property or did any acts in furtherance of the contract. It may be mentioned
that in cases of lease the legislature has recognized that the equity of part
performance is an active equity as in English law and is sufficient to support
an independent action by the plaintiff. (Vide S. 27-A of the Specific Relief
Act). This section however applies to contracts executed after 1st April, 1930,
and has no application in the present case; but there can be no mariner of doubt
that the defence under Section 53-A is available to a person who has an
agreement of lease in his favour though no lease has been executed and
registered. We are satisfied that the defendant has fulfilled both the conditions
necessary to attract the application of the section in the present case. The
High Court was in error when it held that the correspondence summarised in Ex.
181 could not be treated as evidence of the contract and that its terms could
not be reasonably deduced from this document. It is no doubt true that Ex. 181
is merely secondary evidence of the agreement of lease but it is equally true
that it is a very reliable piece of secondary evidence coming as it does from
government records. It furnishes proof of the fact that there was an acceptance
in writing under which the contract to transfer the survey numbers in suit by
way of lease was effected by the Talukdari Settlement Officer in favour of
Manilal Maganlal. The offer was also in writing signed by the offeror. The
Government Resolution which made the agreement binding was also in writing and
was signed by competent authority. No objection as to admission of secondary
evidence could be taken in this case as the primary evidence was in the
possession either of the plaintiff or of the talukdars, the predecessors in
interest and in spite of notice it was not produced. Reference in this
connection may be made to the statement of the 85 plaintiff in the witness box
which is to the following effect :-"I must have read the correspondence
with T.S.O. since it is so recited in the para. 2 of the plaint. I cannot say
whether that correspondence is in my office or with the talukdars. I cannot say
without that correspondence as to whether T.S.O. has called survey No. 226 as
Lalliti and hence the talukdars are not entitled to any income for it. I also
cannot say without that correspondence that the rents of survey Nos. 225 and
223 were fixed at Rs. 135 and Rs. 115 respectively and that Rs. 45 were to be
taken by way of sugar..." In another part of the same statement he said
that the talukdars had got the records of the time preceding his management. It
appears that the original documents were returned to the talukdars after the
discharge of the Talukdari Settlement Officer and were in the possession and
power of the plaintiff or his predecessors in interest and they were not
produced by him in spite of notice. Para. 2 of the plaint clearly recites that
there was correspondence between the Talukdari Settlement Officer and the
defendant's predecessor in interest under which a lease was negotiated. The
plaintiff's knowledge of this correspondence and its contents is thus prima
facie established and leads to the conclusion that it was in his possession or
power and he has intentionally withheld it. Without a perusal of this correspondence
the facts recited in para. 2 of the plaint could not have been mentioned in the
plaint. Once it is held that Ex. 181 is good secondary evidence of the
agreement of lease, there can then be no hesitation in holding that by an offer
and an acceptance made in writing and signed by the respective parties an
agreement was completed between the Talukdari Settlement Officer and the
predecessor in interest of the defendant and that necessary sanction of the'
Government was also in writing signed by the officer concerned. It has further
to be held that the terms of the contract can be fairly deduced from the recitals
of this document. The only important clause with which we are concerned in the
present case is as to the nature of the tenancy. It is clearly recited therein
86 that the lease was to be of a permanent character and the terms as regards
rental could be revised after a period of fifty years. The rent payable is
recited in unambiguous terms in the document as Rs. 290 per annum.
It was not denied that the lessee took
possession after this agreement was arrived at. It was argued that possession
was taken before sanction of the Government was obtained in September, 1917.
There is however no proof of this except a bare recital in the Talukdari
Settlement Officer's letter to Government that he had permitted the defendant
to enter on the land in anticipation of Government's sanction. As already
pointed out, the possession was with the tenants and had to be taken after
entering into an arrangement with them or by issuing notice to them. It is not
possible to think that this could have happened in such a short space of time
as elapsed between the middle of July and the beginning of September. In any
case the factory could not have been built before the sanction of the Government
was received. Not only did the lessee take possession in part-performance of
the agreement but he offered the rent agreed upon and paid it not only to the
Talukdari Settlement Officer but to all those who subsequently managed the
interest of the talukdars in the survey numbers in dispute. The original lessee
after having entered into possession of the property effected a mortgage of it
in favour of the defendant. The defendant advanced a substantial sum on
security of the property to the lessee. The equity of redemption was sold at an
auction sale. The defendant and his predecessor in interest were willing to
perform their part of the contract. As a matter of fact, they have performed
the whole of it. All that remains to be done is the execution of a lease deed
by the lessor in favour of the lessee and of getting it registered. The
plaintiff in para. 6 of the plaint in unambiguous terms admitted that he
received the amount of the lease up to 31st July, 1932, in respect of the
survey numbers in dispute. It is difficult to imagine what.
lease he was referring to in the absence of a
registered deed of lease. It Could only mean the agreement of lease given in
writing 87 and signed by the Talukdari Settlement Officer. It is in pursuance
of this agreement of lease that all the subsequent acts above mentioned were
done. It-may also be observed that an agreement of lease creating a present
demise but not registered is admissible under S. 49 of the Indian Registration
Act as evidence of part performance and Ex. 181 is secondary evidence of that
agreement. A formal lease is not necessary to attract the application of S.
53-A of the Transfer of Property Act. All that is required is that an agreement
in writing signed by the transferor can be gathered from the evidence. The
correspondence mentioned in Ex. 181 fully establishes that fact.
We are therefore of the opinion that the
learned Assistant Judge rightly dismissed the plaintiff's suit and the High
Court was in error in interfering with that decision in second appeal. The
result therefore is that the appeal is allowed, the decision of the Assistant
Judge restored and that of the High Court reversed. The circumstances of the
case are such that we would make no order as to costs. The defendant was at
fault in not producing all the documentary evidence at the proper stage of the
case and he has been enabled to avail himself of the defence furnished to him
under S. 53-A by reason of the admission in evidence after remand of Ex. 181,
which though not properly admitted at that stage was not rejected by the High
Court and could not be rejected at the stage when we dealt with the case. The
parties are therefore left to bear their own costs throughout.
Appeal allowed.
Agent for the appellant: S.P. Varma.
Agent for the respondent: Ganpat Rai.
Back
