This is an appeal filed by a former landlord against his conviction under Section 18(4) of the Bombay Rent Act, 1947, for contravention of the provisions of Section 18(3) thereof, though he had been acquitted of the offence under Section 18(1) of the same Act, with which also he had been charged in the trial Court. The facts of the prosecution case are that complainant K.S. Ghaswalla agreed to pay to the accused, through a firm of booking agents employed by the accused, a sum of Rs.5001/- as and by way of a construction loan in respect of a building proposed to be constructed by the accused at Kandivli in Bombay. Under the said agreement the said Ghaswalla was to be given the tenancy of Flat No. 36 on the first floor of building No. 3 in the housing colony of which the same was a part. The said Ghaswalla paid to the accused various sums aggregating to Rs.4000/- towards the said sum of Rupees 5001/- payable by him. The agreement between the said Ghaswalla and the accused was reduced into writing. (Exh F), and was dated 16th of September 1966, but was not registered as required by Section 18(3) of the Bombay Rent Act, 1947. Under the said agreement, it was by necessary implication, though not in express terms, provided that the said building was to be completed on or before 30th December 1967, but the said agreement did not contain any provision creating a charge on the said Building No. 3 and the interest of the accused in the land on which the said building was erected as required by sub-section (3) of S. 18 of the Bombay Rent Act, 1947. The said agreement also contained certain other conditions to which, however, it is not necessary to refer, but it may be stated that the said agreement clearly showed that the loan of Rs. 5001/- which Ghaswalla was to give to the accused was to be given for the purpose of financing the erection of building No. 3 which was to be constructed by the accused. The prosecution case is that the accused, however, failed to complete the said building by the stipulated date viz. 30th December 1967 and that he has in fact not yet completed the same and given possession to Ghaswalla of the flat allotted to him. The accused was, therefore, charged under Section 18(1) and Section 18(4) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and was tried for the said offences by the learned Presidency Magistrate, 23rd Court, Esplanade, Bombay, who convicted him of the offence under Section 18(4) of the said Act and sentenced him to a fine of Rs. 500/- but acquitted him of the offence under Section 18(1) of the said Act in view of the decision of the Supreme Court in the case of Tolaram v. State of Bombay. : [1955]1SCR158 . It is from the order convicting him of the offence under Section 18(4), that the accused has preferred the present appeal.
2.Several interesting questions releasing to the construction of Section 18 of the Bombay Rent Act, 1947, arise in this appeal and it would, therefore, be convenient at the outset to set out the substance of that section. Sub-section (1) of S. 18 makes it an offence for a landlord to receive any fine, premium or other like sum or deposit or any consideration other than standard rent or the permitted increases in respect of the grant, renewal or continuance of a lease of any premises or for the transfer of a lease'. Sub-section (2) of that section provides for the recovery of any fine, premium or other sum or deposit paid by the tenant to the landlord in violation of sub-section (1). Then come sub-sections (3) and (4), with which I am directly concerned in this appeal and I would, therefore, prefer to quote the same verbatim. These sub sections are in the following terms:
'(3) Nothing in this section shall apply to any payment made under any agreement entered into before the first day of September 1940 or to any payment made by any person to a landlord by way of a loan, for the purpose of financing the erection of the whole or part of a residential building or a residential section of a building on the land held by him as an owner, a lessee or in any other capacity entitling him to build on such land, under an agreement which shall be in writing and shall, notwithstanding anything contained in the Indian Registration Act, 1908, be registered. Such agreement shall inter alia include the following conditions namely :-
(1) that the landlord is to let to such person the whole or part of the building when completed for the use of such person or any member of his family;
(2) that the rate of interest on such loan shall not be less than four per cent per annum;
(3) that such loan shall be repayable by the landlord within a period of ten years from the date of the execution of the agreement or within a period of six months from the date of the termination of the tenancy by the landlord, whichever period expires earlier;
(4) that the amount of the loan shall be a charge on the entire building and the entire interest of the landlord in the land on which such building is erected; provided that if the loan has been advanced by more than one person, all such persons shall, notwithstanding anything contained in any law for the time being in force, be entitled to a charge on the entire building and the entire interest of the landlord in such land rateably according to the amount of the loan advanced by each of such persons;
(5) that the landlord shall use the amount of the loan for the purpose of erecting the whole or part as the case may be of the residential building and for no other purpose; and
(6) (a) that the erection of the building shall be completed within a period of two years from the date of execution of the agreement or if the agreements executed are more than one, from the date of the execution of the first of such agreements: Provided that the said period of two years may be extended to a further period not exceeding one year with the sanction of the Collector;
(b) that if the erection of the building is not completed within the period of two years or within the extended period specified in the proviso to clause (a) the loan shall be repayable forthwith to the person advancing the same with interest at the rate of four per cent per annum.
(4) If any landlord who has received a loan under an agreement in accordance with the provisions of sub-section (3), contravenes, without any reasonable excuse any of the conditions specified in sub-section (3), such landlord shall, on conviction, be punished with imprisonment for a term which may extend to six months or with fine or with both'.
It is not necessary for me to set the explanation to sub-section (4) of the said section. The prosecution case is that the accused has contravened sub-section (3) of S. 18 of the said Act in three respects, viz. (1) by failing to register the agreement dated 16th September 1966 (Exh. F) (2) by not creating a charge in respect of the said loan on building No.3 in which the said Ghaswalla was allotted a flat and on the land on which it was to be erected; and (3) by not completing the said building within the period of two years from the date of the execution of the said agreement dated 16th September 1966. Mr. N.A. Mody, who appeared on behalf of the accused, has contended that the conviction of the accused is erroneous on the following grounds :
(1) As the Supreme Court has now laid in Tolaram's case : [1955]1SCR158 that sub-section (1) of S. 18 does not apply to an agreement to grant a lease, but only applies to a present demise, and as sub-section (3) of that Section is worded only so as to be an exception to sub-section (1) thereof, there is nothing to which sub-section (3) can possibly apply;
(2) Sub-section (3) of Section 18 cannot apply to an agreement to grant a lease because of the controlling provisions of Section 6 of the Act that Part II in which Section 18 occurs applies only to premises 'let' for the purpose specified therein, which must mean a present demise and not a mere agreement to let, and also because of the definition of the word 'landlord' in Section 5(3) thereof which is to the same effect;
(3) Even if the view taken is that sub-section (3) applies to an agreement to grant a lease, the offence made punishable by sub-section (4) is only for contravention without reasonable excuse of any of the conditions specified in sub section (3), but no offence is created by sub-section (4), or by any other provision of the said Act, for not including the conditions of sub-section (3) in the agreement under which a construction loan is given to the landlord, or for not reducing that agreement into writing, or for not registering the same.
3.I shall now proceed to consider the first contention of Mr. Mody and, in that connection, I must immediately refer to the decision of the Supreme Court in Tolaram's case, : [1955]1SCR158 referred to above. The facts of that case were that the appellants before the Supreme Court, who were landlords, were charged under Section 18(1) of the Bombay Rent Act, 1947, for receiving a sum of Rs.2,400/- as premium or Pugree in respect of an agreement of a lease of Block No. 15 in a building under construction. The trial Magistrate found the appellants guilty and sentenced each of them to imprisonment and fine. The appeal by the convicted accused came up before a Division Bench of this Court, which referred it to a Full Bench and the Full Bench : AIR1953Bom347 (FB) took the view that the receipt of consideration for an executory agreement was within the mischief of Section 18 of the Act and the appeal by the convicted accused was dismissed by the Division Bench in consequence of that view. The accused having filed an appeal to the Supreme Court, the Supreme Court allowed that appeal and held that the language of Section 18(1) envisaged the existence of a lease and payment of an amount in respect of that lease, and that the receipt of money by the appellant from the complainant in that case at the time of the oral executory agreement of lease was to made punishable under Section 18(1) of the Act and was outside its mischief. The conviction of the appellants was, therefore, set aside and they were ordered to be acquitted. In my opinion, sub-section (3) of S. 18 is couched in the form of a Proviso to sub-section (1), for, though sub-section (3) does not start with the words 'Provided that' it would read perfectly well, if those words are prefixed to it. In my opinion, those words should be necessarily implied and must be read into sub-section (3) by reason of the way, in which it has been framed by the legislature. A Proviso to a section, however, is not always an exception to the main part of it. It may be a saving clause or in exceptional cases even a substantive provision itself, as when the substantive provision to which it is appended as a Proviso deals with a different subject altogether. A reference may be made in this connection to two decisions of the Supreme Court in regard to the way in which a Proviso should be construed. The first of them is the decision of the Supreme Court in the case of S.B.K. Oil Mills v. Subhash Chandra : [1962]2SCR159 , in which the question of the construction of the Proviso to Section 50 of the Bombay Rent Act itself arose for consideration. The Supreme Court observed (paragraph 9) that the law with regard to provisos was well-settled and well-understood, that, as a general rule, a Proviso was not interpreted as stating a general rule. The Supreme Court, however, proceeded to lay down that Provisos were, however, often added not as an exceptions or qualifications to main enactment but as saving clauses, in which cases they would not be construed as controlled by the Section. After setting out the contentions of either side on this point, the Supreme Court, however, stated that, in the view which they took on another point, it was not necessary for them to pronounce upon the proper construction of Section 50 of the Bombay Rent Act in the said case (para 10). The second decision of the Supreme Court in regard to the construction of Provisos is to be found in the case of Commr. of Commercial Taxes Board of Revenue Madras v. R.S. Jhaver : [1968]1SCR148 . The question which arose in that case was in regard to the proper construction of the proviso to sub-section (2) of S. 41 of the Madras General Sales Tax Act, 1959. Section 41 (2) dealt with inspection of the accounts, registers, records and other documents maintained by dealers, while the proviso thereto dealt with search of residential accommodation. The Supreme Court in its judgment dealt with an argument very similar to the argument which Mr. Mody has advanced before me on the point I am now considering viz. that a Proviso carves out something which is already contained in the main provision in sub-section (2) of S. 41 of the Madras General Sales Tax Act did not provide for search of purely residential accommodation the Proviso was otiose. In regard to that contention, the Supreme Court observed (paragraph 8) that generally speaking, it was true that a Proviso was an exception to the main part of the section, but it was recognized 'that in exceptional cases a Proviso may be substantive provision itself'. The Supreme Court in that judgment itself referred to three decisions on the point and stated (paragraph 11) that the said cases showed that 'in exceptional circumstances a proviso may not be really a Proviso in accepted sense but may be a substantive provision itself'. The Supreme Court then held that the proviso under consideration by it was of the exceptional nature, because the main part of the subsection did not provide for search for such search, it was providing for something independent of the main part of the sub-section. Now, if one turns to sub-section (3) of S. 18 of the Bombay Rent Act, with which I am concerned in the present case and which in the view taken by me above, is framed in the form of a Proviso to sub-section (1) thereto it is clear that it deals only with a stage prior to the stage of the actual demise with which alone sub-section (1) deals, viz. the stage of an executory agreement to grant a lease and, therefore, deals with a totally different subject-matter. I must, construe sub-section (3), which is in the nature of a Proviso to sub-section (1) as already stated above, in the same manner in which the Supreme Court has in the case of : [1968]1SCR148 construed the Proviso to sub-section (2) of S. 41 of the Madras General Sales Tax Act and held that sub-section (3) is a Proviso of an exceptional nature, in so far as it is not really any Proviso to sub-section (1) in accepted sense, but is a substantive provision itself. This view taken by me is supported by the fact that non-compliance with the provisions of sub-section (3) has been provided for, independently of sub-section (1) as an offence in sub-section (4) of S. 18. It appears that sub-section (3) has been framed in the form of a proviso to sub-section (1) ex majore cautela for the purpose of clarification as indicated by the Supreme Court itself in Tolaram's case : [1955]1SCR158 or is in the nature of an explanation and is not an exception as held by Bal. J. in the case of Sulochana Ganpat v. Madan Dattatraya 72 Bom LR 351. There is, therefore, no substance in the first contention advanced before me by Mr. Mody and the same must be rejected.
4. As far as the second contention of Mr. Mody is concerned, in my opinion, having regard to the fact that sub-section (3) of S. 18 in terms deals with an agreement to grant a lease, the word 'let' in Section 6 of the Act cannot be so construed as to nullify sub-section (3) of S. 18 altogether. The only way of arriving at a harmonious construction of Section 6 and sub-section (3) of S. 18 which occurs in Part II with which Section 6 deals is to construe the words 'premises let' in Section 6 as including premises agreed to be let for the purposes specified therein. In fact, the object of Section 6 appears to be to designate the purposes for which the premises must have been let or agreed to be let in order to make the provisions of Part II of the Act applicable. As far as the definition of the term 'landlord' in Section 5(3) of the Act is concerned, the said section starts with the words 'Unless there is anything repugnant to the subject or context' and, in my opinion, there cannot be the least doubt that sub-section (3) of S. 18 of the Act is in terms repugnant to giving to the terms 'landlord' used therein a meaning which would restrict it to a person who has created a present demise. Moreover, the words 'or who would so receive the rent' in Section 5(3) in my opinion, clearly include a person who has agreed to let the premises and receive the rent in respect thereof. The second contention of Mr. Mody must, therefore, also be rejected.
5.That brings me to the third contention of Mr. Mody on behalf of the accused. The same raises the following three questions : (a) Does sub-section (4) apply to breach of the conditions specified in sub-section (3) only when they are in fact included in a construction loan agreement are or the conditions of sub-section (3) incorporated by operation of law in all construction loan agreements by reason of sub-section (3)? (b) Does the term 'conditions' in sub-section (4) connote only those which are listed as (I) to (vi) in sub-section (3) or also the provision in the substantive part of sub-section (3) that the agreement should be in writing and registered And (c) Do the conditions listed as (I) to (vi) in sub section (3) apply (I) only if the agreement is in writing and registered; (ii) if the agreement is in writing, but is not registered; (iii) even if the agreement is oral?
6.Mr. Mody has contended that sub-section (4) of Section 18 applies to breach of the conditions specified in sub-section (3) only when they are in fact included in a construction loan agreement, because that, according to him is the only meaning of the plain terms of sub-section (3) which should be construed as it stands without adding words to it so as to read 'shall be deemed to include'. Alternatively, he has contended that, even if the view taken is that the words 'shall include' in sub-section (3) are capable of two constructions the one which is more favourable to the accused should be adopted. In support of these contentions, Mr. Mody has relied upon the dictionary meanings of the word 'include' is being comprise as a part, and of the word 'comprise' as being contain (Chambers's Dictionary) and that is also the meaning to be found in the Shorter Oxford English Dictionary (Third Edition). Mr. Mody has also relied upon a passage in Maxwell on the Interpretation of Statutes, 12th Edition, page 239, that, in a penal Statute, the Court must always see that the person to be penalised comes fairly and squarely within the plain words of the enactment, and that it is not enough that what he has done comes substantially within the mischief aimed at by the statute. Two of the main dictionary meanings of the word 'incorporate', however are 'to include in the body of something else' or 'to include as a part or parts of itself' (Shorter Oxford English Dictionary. Third Edition). Even as a matter of plain language, therefore, the words 'include and incorporate' are interchangeable as far as their meaning goes, depending of course on the context. In my opinion the words 'shall include' in sub-sec.(3) are capable of being construed as meaning 'shall be incorporated' without adding any words, merely as a matter of their fair and ordinary meaning, and the passage from Maxwell relied upon by Mr. Mody is, therefore, of no avail to him. The first limb of the argument of Mr. Mody is, therefore, of no avail to him. The first limb of the argument of Mr. Mody on the point I am now considering must be rejected.
7. As far as the second and alternative limb of his argument is concerned, Mr. Mody has relied upon another rule of construction stated in Maxwell (also at page 239) that if there are two reasonable constructions the Court must give the more lenient one which will avoid the penalty in any particular case. That rule of construction does not, however, lay down that if any two constructions are possible in regard to a penal statute the more lenient one must be adopted, but what it lays down is that if the words of a statute are capable of two reasonable constructions, the Court must adopt the more lenient one which will avoid the penalty. That, indeed, is the rule of construction which the Supreme Court itself has formulated and adopted in regard to the construction of Section 18 of the Bombay Rent Act itself in Tolaram's case already cited above. The Supreme Court has stated (at page 1209) :-
'It may be here observed that the provisions of Section 18(1) are penal in nature and it is a well settled rule of construction of penal statutes that if two possible and reasonable constructions can be put upon a penal provision, the Court must lean towards that construction which exempts the subject from penalty rather than the one which imposes penalty. It is not competent to the Court to stretch the meaning of an expression used by the legislature in order to carry out the intention of the legislature'.
In Maxwell on the Interpretation of Statutes it is, however, stated (at p.45) that if the choice is between two interpretations the narrower of which would fail to achieve the manifest purpose of the legislation, the Court should avoid a construction which would reduce the legislation to futility and should accept the bolder construction based on the view that the legislature would legislate only for the purpose of bringing about an effective result. Maxwell states that there are many examples of words in penal statutes being given a wide construction (page 247). Maxwell also cites another rule of construction (at page 137), and it is, that to carry out effectually the object of statute, it must be so construed as to defeat all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or enjoined. Several decisions of English Courts are cited by Maxwell in support of that rule, including a decision in a criminal case in which that rule has been applied (p. 139). The same rule has been cited in another way by Maxwell (p. 199) when it is stated that where to apply words literally would defeat the obvious intention of the legislation and produce a wholly unreasonable result, the Court must do some violence to the words and so achieve that obvious intention and produce a rational construction. These, in my opinion, are merely different facets of the rule of construction based on futility mentioned earlier in the judgment. It was, however, sought to be contended by Mr. Mody that the argument of futility which is based upon the decision of the House of Lords in the case of Nokes v. Doncaster Amalgamated Collieries Ltd. 1940 AC 1014 has been rejected by the Full Bench of this Court in Tolaram's case in regard to the construction of penal statutes : AIR1953Bom347 . In the judgment of the Supreme Court on appeal from the Full Bench judgment in the said case, however, I do not find any express rejection of that rule of construction by the Supreme Court, or even a reference to Nokes' case though there can be no doubt that the Supreme Court has (at p. 1209) based its own judgment primarily on the observations of Lord Macmillan in the case of London and North Eastern Railway Co. v. Berriman 1946 AC 278 . Even if one were to disregard the rule of construction based on futility, the position in regard to the construction of a penal section is that if the only reasonable way of construing such a section, without stretching its language, is one which goes against the accused, to so construe it would not violate the rule of strict construction of penal statutes.
8. Proceeding to examine sub-sections (3) and (4) of Section 18 in the light of these principles, the words, 'shall include' in sub-section (3) are, no doubt, theoretically capable of two constructors, viz. (a) that the conditions specified in sub-section (3) must, in fact, be included in the construction loan agreement in question; or (b) that they must be incorporated in all construction, loan agreements by operation of law. As a matter of plain language, both are equally correct without any stretching of language or addition of words. However, though these two constructions are possible in a theoretical sense, the only construction which in my opinion is reasonable is the second one, because I fail to see how the legislature could have intended merely to say 'you must include these conditions in your agreement', without providing for the consequences of or penalty for their non-inclusion. The manifest objects of the legislation embodied in the Bombay Rent Act, 1947, are to be found stated in the preamble to that Act, and have also been stated by Bal. J in the course of his judgment in the case of 72 Bom LR 351 . These objects are, to provide protection to tenants against exorbitant charges by landlords and against eviction except on proof of certain specified circumstances. To give to the words 'shall include' in sub-section (3) of Section 18 the narrower construction of physical inclusion in the construction loan agreement in question would not merely fail to achieve those objects, but would totally defeat them, for a landlord would only have to omit those terms from his written agreement and do with impunity what the law intended to forbid. That could never have been the intention of the legislature and, in my opinion, therefore, that would not bee a reasonable construction of those words at all. In this connection, it is also important to bear in mind that the conditions of sub-section (3) have not been made 'subject to contract to the contrary', which would indicate that the legislature intended them to be included in all construction loan agreements of the nature contemplated by that sub-section. I hold that the conditions of sub-section (3) of Section 18 of the Bombay Rent Act, 1947 are incorporated by operation of law in all construction loan agreements, whether they be oral or in writing.
9.It was, however, sought to be contended by Mr. Mody that the view which I am taking on this point is in conflict with the judgment of Bal J. in Sulochana Ganpat's case : (1970)72BOMLR351 to which I have already referred in another context, in so far as that very argument was advanced before that learned Judge and rejected by him (at page 357). The observations of Bal. J. in regard to the point of incorporation by operation of law, which I am now considering are clearly obiter dicta for the simple reason that the view which he took was (at p. 357) that S. 49 of the Registration Act only provides for the consequences of non-registration of a document required to be registered either under Section 17 of the Registration Act or under any provision of the Transfer of Property Act. He, therefore, held that non-registration of a loan agreement, though it may amount to non-compliance by the landlord with the requirement of Section 18(3) will not make the document inadmissible in evidence. His decision on the question of the admissibility of the document before him would have been the same, whichever view he took in regard to the argument that the conditions laid down in sub-section (3) are to be incorporated in every construction loan agreement. The observations of Bal. J. on the point which I am now considering being obiter dicta. I do not consider myself bound to follow the view taken by him in regard to the same. It may be mentioned that the decision of the Supreme Court in Tolaram's case, : [1955]1SCR158 does not appear to have been cited before Bal. J. in the said case.
10.It was next sought to be contended by Mr. Mody that the view which I am taking on this point is also in conflict with an unreported judgment of Patel, J. D/- 7-9-1960 in A.O. No. 170 of 1959 (Bom). The question before the learned Judge in that case was whether the rights created by the construction loan agreement before him could be said to be rights arising out of the Bombay Rent Act, or de hors the Bombay Rent Act. Patel, J. took the view that Section 18(3) created 'an exception in favour of validity provided the terms of contract were as those mentioned', that Section 18(3) does not purport to create any right either in the tenant or in the landlord, and that 'the rights would be the creation of the agreement between the parties de hors the Rent Act and cannot be said to arise out of the Act'. The sentence last quoted has been relied upon strongly by Mr. Mody as negativing the view that the legislature intended to incorporate the conditions mentioned in sub-section (3) in all construction loan agreements. With respect to the learned Judge, in proceeding on the basis that Section 18(3) is an exception to Section 18(1), he has proceeded on a basis which cannot stand in view of the decision of the Supreme Court in Tolaram's case which does not appear to have been cited before him holding that Section 18(1) applied only to cases of a present demise. In view of the said decision of the Supreme Court, I do not consider myself bound by the view taken by Patel, J. in regard to the interpretation of the provisions of Section 18(3).
11.I now turn to the second question which arises for my consideration, viz. whether the word 'conditions' in sub section (4) of Section 18 connotes only those conditions which are listed as (I) to (vi) in sub-section (3) or includes also the provision therein that the agreement should be in writing and registered. In my opinion, the provision that is to be found in sub-section (3) that the agreement should be in writing and registered is equally one of the conditions specified in sub-section (3) as there is no reason for excluding the same from the natural meaning of the term 'conditions'. The condition in regard to writing and registration is stated separately only because from its very nature and as a matter of plain grammatical construction it could not have been included in the conditions which are to be found listed as (I) to (vi) in that very sub-section.
12.That brings me to the third question that arises, viz. whether the conditions listed as (I) to (vi) in sub-section (3) apply (I) only if the agreement is in writing and registered; (ii) if the agreement is in writing but is not registered; (iii) even if the agreement is oral. From the view taken by me in the preceding paragraphs it does not follow that because the conditions in regard to writing and registration are separately stated in the substantive part of sub-section (3), the other conditions which are to be found listed in the sub-section need not be complied with if the agreement is not in writing or is not registered. The requirement of the agreement being in writing and being registered is as much a conditions as the other conditions listed in sub-section (3), no more and no less. If, therefore, the agreement under which a construction loan is taken by a landlord is not in writing, or is in writing but is not registered, the landlord commits an offence under sub-section (4) unless of course he can make out 'any reasonable excuse' for not reducing the agreement into writing or not registering the same, in which case, as the language of sub-section (4) clearly shows, he commits no offence. However, even if the landlord has a reasonable excuse for the agreement not being in writing or not being registered, he would still commit an offence if he committed breach of any of the conditions that are to be found listed as (I) to (vi) in sub-section (3), unless he can prove a reasonable excuse for breach of such listed condition also. I, therefore, take the view that the conditions listed in sub-section (3) must be complied with and breach thereof is an offence under sub-section (4) of Section 18, in all the three cases mentioned above unless of course reasonable excuse for non-compliance be proved.
13.I will now turn to the facts of the present case in the light of the construction which I have placed on sub-sections (3) and (4) of the Bombay Rent Act, 1947. The prosecution case is that the accused has committed breach of sub-section (3) of Section 18 by (1) not registering the agreement dated 16th September 1966 (Ex. F); (2) by not completing the building within the period of two years from the date of execution of that agreement; and (3) by not providing in the said agreement that the amount of the loan is to be a charge on the said building and the entire interest of the accused in the land on which that building was to be erected. In his evidence, the complainant Ghaswalla has deposed that the agreement (Ex. F) has not been registered, though it was intended to be registered immediately after it was executed. The accused has not elicited or led any evidence, nor has he, either in his statement under Section 342 of the Criminal Procedure Code or in the written statement which he has filed in the trial court, said anything which would show that he had any reasonable excuse for not registering that agreement as required by the provisions of sub-section (3) of Section 18 of the Bombay Rent Act. I, therefore, hold that the accused has committed an offence under sub-section (4) of the said Section 18 and has rightly been convicted of the same by the learned Magistrate. In that view of the matter, it is not really necessary for me to consider breach of any of the other conditions specified in sub section (3) of the said Section 18. Since, however, the matter has been argued at great length before me, I feel I must also deal with the alleged breach of the other two conditions mentioned above.
14.The complainant Ghaswalla had deposed in clear terms that the construction of the building in question 'is yet not complete' which must mean that it had not been completed at the date when he gave evidence in the trial court, by which time the statutory period of two years from the date of execution of the agreement dated 16th September 1966 (Ex. F) had long since expired. He has stated later on in his evidence once again that the flat allotted to him had not been completed at the time when he gave evidence in the trial court. It is true that the said agreement (Ex. F), by clear implication, provides for the completion of the building on or before 30th December 1967. However having regard to the provisions of clause (vi) (a) of sub-section (3) of Section 18, even if the building is not completed by the said date the accused would not, in my opinion, commit the offence under sub-section (4) of Section 18 unless the erection of the building transgresses the statutory period of two years provided in clause (vi) (a) of sub-section (3) of that section. It was sought to be contended by Mr. Mody that this evidence should not be accepted in view of the fact that Ghaswalla has stated at another place in his evidence that the last time he went to the site was only in June, 1967, with the result that the statements made earlier by him were not based on his own personal knowledge but were in the nature of hearsay evidence. The record of the proceedings in the trial court, however, shows that no objection has been taken at any time to the admissibility of the statements made by Ghaswalla and, under those circumstances, it is now too late in the day to raise that objection in the appellate Court. Moreover, that is not the only evidence on the point. Witness A.S. Narayan has also deposed in clear terms that the flat in question which it appears, has been re-allotted by the accused tot he said Narayan from whom the accused has taken another construction loan, was not ready at the date when he gave evidence in the trial court which was the 24th of Nov. 1969 and that he had not been able to get possession of the same. There is, therefore, no need to remand the case to the trial Court for taking evidence on the point as to whether or not the building has been completed within the statutory period of two years from the date of agreement (Ex. F) as Mr. Mody sought to urge before me. There was definite and clear evidence before the trial court on which it has arrived at its finding and I have no hesitation in coming to the conclusion that that finding is correct. Here again, the accused has not elicited or led any evidence, not has he made any statement either under Section 342 of the Criminal Procedure Code or in the written statement filed by him in the trial court, which would make out any reasonable excuse for not completing the building within the statutory period of two years from the date of the agreement. In the course of his arguments, Mr. Mody has relied on a statement that is to be found in the evidence of the complainant Ghaswalla himself that one Edulji, who was the President of the Tenants' Association of the said building, and was authorized to act on behalf of the tenants in the matter of the formation of a scoiety, has signed the agreements dated 31-5-1969 and 23-5-1969 under which the rights and liabilities of the accused were taken over by the society. I am afraid that fact, however, cannot be of any assistance to the accused in making out a reasonable excuse for non-completion of the building in question, for the simple reason that by the time the said agreements were executed, the statutory period of two years from the date of the agreement (Ex. F) had already expired on the 16th of September 1968 and the offence under sub-section (4) was already complete as far as the accused was concerned, and no subsequent act of the accused could possibly wipe out that offence. I, therefore, hold that the accused has also rightly been convicted under sub-section (4) of Section 18 for breach of the condition in regard to the non-completion of the said building within the statutory period of two years.
15.In the view which I have taken above, viz. that the conditions set out in sub-section (3) of Section 18 of the Bombay Rent Act are statutorily incorporated in every construction loan agreement, an accused person, in my opinion, does not commit any offence merely by failing to provide expressly in the agreement under which a construction loan is taken for a charge on the building and on his interest in the land. The view taken by the trial Magistrate that the accused has also committed an offence under sub-section (4) of Section 18 of the Bombay Rent Act in regard to the same is, therefore, not correct.
16.In the result, I hold that the accused has rightly been convicted by the trial court of the offence under sub-section (4) of Section 18 of the Bombay Rent Act, 1947, by reason of his having failed to register the agreement dated 16th September 1966 (Ex. F) and by reason of his having failed to complete the erection of the building within the statutory period of two years from the date of execution of that agreement. This appeal must, therefore, be dismissed.
17.As far as sentence is concerned, the trial court has passed a sentence of fine of Rs. 500/- and has ordered that, in default of payment of the fine, the accused should undergo rigorous imprisonment for four months. It has been pointed to me that the complainant Ghaswalla has, in fact, not suffered the loss of a single rupee, and it has been contended that the offence is, therefore, a technical one. It was stated to me that the complainant Ghaswalla has agreed to treat the amount of Rupees 4000/- paid by him as transferred to the credit of the Society which has already been formed in respect of the building in question, and to take the same flat from that Society on what is popularly known as ownership basis. In view of these facts I do not think the accused deserves any substantial sentence by way of fine. I, therefore, order that the sentence passed upon the accused be reduced to a fine of Rupees 100/- in default of payment of which, the accused should suffer simple imprisonment for one month. The surplus fine, if paid, should be refunded to the accused.
18. Appeal dismissed.