ORDER
1. Challenge in these appeals by special leave is to the decision of the High Court which had, while setting aside the judgments of the trial court and the lower appellate court, dismissed the appellant's suit for specific performance.
2. Briefly stated, the facts are:
That on 25-11-1961 the parties in these appeals had entered into an agreement. By virtue of that agreement the appellant had agreed to take on lease for a period of 99 years a parcel of land which, at that time, was not in the possession of the respondent owners. The said land was in possession of the municipality and the agreement postulated that the municipality would be vacating the premises and would remove the postmortem house and thereupon the plot of land would be given on 99 years' lease to the appellant. The agreement further stated that at the time when the possession of the plot is handed over a balance sum of Rs. 2500 would be paid as advance rent for 50 years, Rs. 1000 having already been received on the date of the signing of the agreement by the representative of the owner, and a formal lease deed would be executed and registered in the presence of the Sub-Registrar.
3. It is on 31-1-1964 that the town municipality vacated the premises by removing the post-mortem house. It appears that the said municipality had constructed another post-mortem house to meet the requirements. The respondents took possession of the land in question on 1-21964. It is thereafter that an agreement was entered into on 16-3-1964 between the owner Respondent 1 and Respondent 2 whereby the same plot of land was sought to be given on lease to Respondent 2.
4. It is the case of the appellant that he repeatedly requested Respondent 2 to accept the balance amount of Rs. 2500 and to execute a registered lease deed. On this not being done the suit was filed for specific performance on 28-11965.
5. After the pleadings were completed and evidence led, the Munsiff by his judgment dated 10-11-1972 decreed the suit. The appeal filed by the respondents was dismissed by the District Judge on 5-21976. This led to the filing of second appeal before the High Court.
6. By the judgment under appeal, the High Court came to the conclusion that as the document in question was not signed by both the parties, the appellant herein could not take advantage of the provisions of Section 27A of the old Specific Relief Act. It then held that the document was a lease as defined by Section 2(7) of the Registration Act, 1908 and as it had not been registered in terms of Section 17(d) of the Registration Act, the appellant could not file a suit on the basis of the said document. The High Court accordingly allowed the appeal of the respondents and set aside the decree for specific performance.
7. We have heard the counsel for the parties at length. It is quite clear from a perusal of the document in question that on the date when the same was executed the possession of the property was still with the municipality. This document contains the recital that Rs. 3500 would be paid as advance rent for 50 years and Rs. 1000 had been taken as advance on that day. The decision was to execute the lease for 99 years but the date from which the lease was to commence was not stipulated. It was provided in the agreement that the lease would commence only after the municipality vacates the premises and removes the post-mortem house which had been constructed on the plot in question. The document envisaged that the possession of the land would be given simultaneously with the execution and registration of a lease deed. All this was to happen in future at a non-specified point of time because it was not known as to when the plot in question would fall vacant.
8. It is no doubt true that Section 2(7) of the Registration Act defines lease as including an 'agreement to lease'. It is on this basis that Shri Bhat, learned Counsel appearing for the respondents contends that an agreement to lease was compulsorily registrable and because the document was not registered, therefore. The High Court was right in coming to the conclusion that a suit for specific performance based on this document was not maintainable.
9. Mr. Javali, learned Senior Counsel appearing for the appellant has rightly relied, to meet this contention, on the decision of this Court in Trivenibai v. Lilabai 1959 Supp (2) SCR 107. After interpreting the provisions of Section 2(7) of the Registration Act and taking into consideration the decision of the Privy Council in Hemanta Kumari Devi v. Midnapur Zamindari Co. Ltd. (1919) 46 IA 240, this Court came to the conclusion that an agreement to lease under Section 2(7) of the Registration Act, 1908 must be a document which effects an actual demise and operates as a lease. An agreement between two parties, it was held, which entitles one of there merely to claim the execution of a lease from the other without creating a present and immediate demise in his favour is not an agreement to lease within the meaning of Section 2(7) of the Act.
10. Applying the aforesaid ratio to the present case we find that the document in question was not intended to, nor did it in fact result in a demise in present in favour of the appellant. This agreement was nothing more than a promise to do something in future, namely, to execute a lease deed and hand over possession of the plot in question to the appellant after the same was vacated by the municipality. The document, in other words, was a sort of undertaking or a promise given by Respondent 1 to the appellant that on the municipality vacating the plot, the same would be given on 99 years' lease to the appellant and the lease deed would be registered with the Sub-Registrar. Under no circumstances, in our opinion, did this document amount to a memorandum of a demise in the present time.
11. The High Court fell in error in reversing the decision of the courts below. We accordingly allow these appeals, set aside the decision of the High Court and restore the judgment of the lower appellate court. The parties to bear their own costs.