Sumatibai Waman Kirtikar Vs. Anant Balkrishna Shirgaonkar - Court Judgment

M.C. Chagla, C.J.

1. The question that arises for consideration in this Letters Patent appeal is whether a compromise decree which operates as a lease requires registration.

2. The plaintiff in the suit from which this appeal arises executed a lease in favour of the defendant on April 1, 1943, which expired by efflux of time on March 31, 1944. As the defendant did not hand over possession, the plaintiff filed a suit for ejectment on April 16, 1944, On April 16, 1945, a consent decree was arrived at between the parties and it is this decree which calls for an interpretation at our hands. By this decree the defendant agreed to continue to occupy the property which had been leased to him and the plaintiff agreed that the defendant should continue to occupy the property from April 1, 1944 to June 30, 1947. The defendant further agreed to give vacant possession to the plaintiff of the property in suit on June 30, 1947, and the defendant agreed that he would pay to the plaintiff the rent of the suit property in the manner laid down in the decree. As possession was not handed over by the defendant on June 30, 1947, the plaintiff filed a darkhast to execute the decree and obtained possession under it. The executing Court ordered execution to issue. Prom that order there was an appeal preferred to the District Court and the District Court took the view that after June 30, 1947, the judgment-debtor was protected by Act LVII of 1947 and therefore set aside the order of the executing Court. The plaintiff came in second appeal to this Court and Mr. Justice Jahagirdar held that the decree was not capable of execution because it was not registered. He therefore upheld the order of the District Court, but on a different ground. He then gave a certificate for a Letters Patent appeal, and the appeal now comes on before us for decision.

3. A very ingenious argument has been advanced before as by Mr. Dharap. According to Mr. Dharap, the provisions contained in the consent decree do not and cannot constitute a lease because they do not conform to the provisions of Section 107 of the Transfer of Property Act. That section lays down the mode of making leases mentioned therein and it provides that '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 by a registered instrument,' It further provides that 'where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee.' Therefore, argues Mr. Dharap, that as a decree is not an instrument which is executed by both the lessor and the lessee, it is not a lease contemplated by the Transfer of Property Act and therefore it is not compulsorily registrable, Mr. Dharap wants us to read the document as an order of the Court resulting from a compromise whereby the judgment-debtor is permitted to continue in possession of the property in suit till a fixed date and thereafter to hand over possession to the judgment-creditor, and Mr. Dharap says that this is a decree which he is seeking to execute and there is nothing in law to prevent him from executing such a decree.

4. Now, in order to decide whether the document is compulsorily registrable or not, we have got to consider the provisions not so much of the Transfer of Property Act as of the Indian Registration Act, and that Act in Section 17 enumerates the documents of which registration is compulsory, and under Sub-section (1) Clause (d) one of such documents is 'leases of immoveable property from year to year or for any term exceeding one year, or reserving a yearly rent.' The only definition given in the Act of a lease is an inclusive and not an exhaustive definition. 'Lease' is merely denned as including a kabuliyat, counterpart, an undertaking to cultivate or occupy and an agreement to lease. Mr. Dharap's contention is that Section 17 refers only to private documents executed inter partes and Section 17 is not intended to apply to decrees of the Court which fall into a different category altogether. This contention is wholly erroneous, because when we look at the scheme of Section 17 it is clear that the Legislature never intended that a decree of a Court could not fall under one or other of the sub-clauses of Section 17. The Legislature on the contrary fully realised that decrees of the Court may fall under one or other of these sub-clauses and therefore it enacted Section 17(2) of the Indian Registration Act which excludes decrees or orders of the Court if they fall under Clauses (6) and (c) of Sub-section (7) of Section 17. Therefore, although a decree of the Court may fall under Sub-clause (a) or Sub-clause (6) and would have been registrable it does not require registration because of the exemption contained in Sub-section (2). But that exemption is not extended to leases which fall under Sub-clause (d). Now, it is a well established canon of construction that when the Legislature enumerates various classes for any specific purpose, if a document falls under one specific class for the purpose of construction, the Court should put that document in that particular class rather than in a wider or more residuary class, and therefore if a document is a lease, although it may also fall under Sub-clause (b) of Section 17(1) for the purpose of the Indian Registration Act, it must be looked upon as falling under Clause (d) and not under Clause (6), because Clause (d) deals with a specific class of documents and not general documents which may fall in some other class. The fallacy underlying Mr. Dharap's argument is that only leases referred to in Section 107 of the Transfer of Property Act are made compulsorily registrable by the Registration Act. That is clearly not so because a lease is really defined by Section 105 of the Transfer of Property Act and that section lays down what are the essential ingredients of a lease, and those ingredients are three: A lease must state the premises which are demised, it must state the rent reserved under the lease, and it must state the term during which the lease is to continue. Once, those three ingredients are present in a document, then the document is a lease. Section 107 refers to those documents which are executed by parties and it lays down what is the mode to be adopted in order to make leases of that particular character. But when we turn to the Registration Act and when we find that all leases are compulsorily registrable we cannot cut down that directive of the Legislature and apply it merely to leases of a particular kind enacted in Section 107 of the Transfer of Property Act.

5. There seems to be no reason in principle why a lease cannot be made by parties arriving at a compromise of a suit and giving effect to that compromise in a decree of a Court. If two parties agree that one will give a lease of a land to the other and if they want that agreement to be embodied in the decree of a Court, that decree would operate as a lease as much as an instrument executed by two parties making a lease as provided by Section 107 of the Transfer of Property Act, and therefore we see no reason whatever why if this document can be read as constituting a lease there is anything in law to preclude the Court by embodying it in a decree which it passes as a result of a compromise. Looking to the terms of the document itself there can be no doubt that it is a lease and it does create the relationship of landlord and tenant between the judgment-creditor and the judgment-debtor. It is not a case of the judgment-debtor being permitted to use and occupy the land for a certain period and be required to pay compensation for that use and occupation. It expressly sets out the rent that has got to be paid by the tenant, it fixes the term of the lease, and it requires the tenant to hand over possession at the end of that term. The use of the expression 'rent' is very significant and we cannot accept Mr. Dharap's contention that 'rent' must be read in the sense of compensation rather than in its strict technical sense. The distinction between rent and compensation is well known and well understood, and if the parties deliberately use the expression 'rent' and when we find the other ingredients of a lease present, there is no reason why we should take the view that what the parties agreed upon was not the making of a lease but bringing into existence some other document. There is a further provision in the decree which also goes to show that the document was intended to operate as a lease. On the failure of the defendant to pay any of the amount which is fixed as rent on its due date, the only right the decree gave to the judgment-creditor was to have it executed for the amount which remained due; it did not entitle the judgment-creditor to take possession of the land on default of. payment of rent.

6. In taking the view that a consent decree can operate as a lease we are accepting the view taken by the other High Courts in India and also a view which in our opinion is implicit in a decision of the Privy Council. We will first refer to the decision of the Privy Council that is reported in Hemanta Kumari Debt v. Midnapur Zamindari Company (1019) L.R. 46 IndAp 240 : 22 Bom. L.R. 488 The Privy Council was considering a suit, filed for the specific performance of an agreement which was embodied in a compromise decree, and the question was whether that compromise decree required registration or not. The plaintiff's contention was that the compromise decree was an agreement to lease and he had filed the suit to enforce that agreement. The Privy Council held that the decree did not require registration because according to their Lordships the decree did not create a present and immediate interest in the land; there was no present demise and the lease was to be given only on a contingency happening and therefore the compromise decree did not embody or operate as a lease as required by the Registration Act. Now what is very significant and what is important to note is that in the whole of the judgment the Privy Council proceeded on the assumption that a compromise decree could operate as a lease. But for the assumption it would have been entirely unnecessary to consider the various points that their Lordships considered. The short answer to the defendant's contention would have been that a consent decree cannot operate as a lease and therefore the question of registration did not arise. Therefore we read the Privy Council case as deciding not directly but by necessary implication that a consent decree can operate as a lease, and if it does operate as a lease it would attract to itself all the consequences which the Registration Act lays down. The same view has been taken by the Madras High Court in Kasim v. Abdul Rahiman [1044] Mad. 543 by the Calcutta High Court in Nazar Ali v. Indra Kumar Sutar I.L.R. (1028) Cal. 427 and the Patna High Court in Sachindra Mohan Ghose v. Ramjash Agarwalla I.L.R. (1931) Pat. 98

7. The next contention of Mr. Dharap is that assuming this consent decree operates as a lease, even so he is not precluded from executing his decree and obtaining possession of the property which the judgment-debtor was bound to hand over to him on the expiry of the period stated in the decree. Now, the consequences of non-registration are to be found in Section 49 of the Indian Registration Act, and those consequences are that 'No document required by Section 17 to be registered shall (a) affect any immoveable property comprised therein (we are not concerned with (b), or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. Mr. Dharap argues that he does not want this decree which he is executing to be received in evidence. The decree is already on the record of the Court and therefore if the Court executes the decree it does not in any way contravene the provisions of Section 49(c). But it is not the provisions of Sub-clause (c) that Mr. Dharap has got to get over, but the provisions of Sub-clause (a), because by that sub-clause the decree cannot be permitted to affect any immoveable property which is comprised in that document, and it is difficult to see how Mr. Dharap's client can get possession of the property under the decree without the decree affecting that immoveable property, Mr. Dharap says that if the decree operates as a lease it is the lessee alone who is interested in relying on the terms of the decree for his possession. That again is incorrect because not only the possession of the lessee is attributable to the lease, but the right of the lessor to obtain possession on the efflux of time is also attributable to the terms of the lease, and therefore if the lessor seeks to obtain possession from his lessee at the end of the term of the lease, he is doing so by reason of the fact that the relations of landlord and tenant were established between him and his judgment-debtor. The Court cannot permit him to obtain possession because if it were to do so it is permitting the decree to affect the immoveable property which the law prohibits the Court from doing. It is not a case of the Court going behind the decree; it is not open to the executing Court to do so. But the executing Court must give effect to the provisions of the law, and one of the provisions of the law is that contained in Section 49 of the Indian Registration Act which will not permit any document which is com-pulsorily registerable and which has not been registered to affect any immoveable property comprised in that document.

8. The result, therefore, is that we agree with Mr. Justice Jahagirdar that the decree in question was intended to operate as a lease, that as a lease it was compulsorily registrable under Section 17(2)(d), and that as it was not registered the judgment-creditor cannot obtain possession of the property in suit under the terms of this decree. The result therefore is that this appeal will be dismissed with costs.

9. There are cross-objections with regard to the order of costs made by Mr. Justice Jahagirdar. As the order for costs is purely discretionary, we see no reason why we should interfere with that order. Cross-objections are also dismissed with costs.