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 Bamadev Panigrahi v. Monorama Raj

AIR 1974 AP 226

JUDGMENT Kondaiah, J. This appeal by the defendant is directed against the

judgment and decree of the Additional Subordinate Judge, Srikakulam, in O. S. No. 76 of
1966 decreeing the plaintiff's suit for the recovery of a sum of the equipment of a cinema
concern known as 'Kumar Touring Talkies'.

2. The material facts leading to this appeal may briefly be stated: The plaintiff's husband,
late Profulla Kumar Raj and the defendant were friends. According to the plaint
allegations, the plaintiff's husband had obtained a possessory mortgage. On 1-9-1957
from the Raja of Mandasa on 1-9-1957 from the Raja of Mandasa in respect of a site
measuring about Ac. 3-51 cents known as 'Pula Thota' which contains a bunglow in it, for
a sum of Rs. 4,000/- with a view to run to cinema in that place. Profulla Kumar Raj, the
plaintiff's husband, advanced from the year 1952 till the end of 1959 various sums
amounting to Rs. 15,000/- to the defendant to meet his obligations under forest contracts
which he had entered into with the Raja Seheb of Mandasa. The plaintiff's husband built
a temporary cinema structure and erected a temporary pandal in a portion of the plaint
schedule site. For the purpose of the plaint schedule site. For the purpose of the cinema,
the plaintiff's husband purchased under a hire purchase agreement dated 17-2-1958 a
cinema projector and its accessories under an agreement with the Commercial Credit
Corporation, Madras, for a sum of Rs. 16,327/-. On the same day, he purchased a diesel
amount of Rs. 3,506/-. The aforesaid cinema projector and the oil engine and their
accessories have been imbedded and installed in the earth by constructing foundations
for the purpose of running the cinema concern known as 'Kumar Touring Talkies.'
Finding no time to manage the cinema concern the entrusted the management of the trust
and confidence in him. The defendant taking advantage of his position, as being the
person in management, colluded with the Raja Saheb of Mandesa and got an
endorsement, of discharge made on the mortgage bond dated 1-9-1957 and subsequently
obtained the mortgage in his name on 6-3-1961. The plaintiff's husband had issued a
notice on 5-5-1961 calling upon the defendant to render a correct account of the
management of the cinema concern and demanding from him the payment of Rs. 15,000/-
previously advanced by him and to deliver possession of the entire cinema concern
including the machinery, equipment, records etc., and also the site. The defendant, by his
reply dated 2-6-1961, denied has liability either to account for the management of Kumar

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 Touring Talkies or to the return of Rs. 15,000/- alleged to have been advanced by the
plaintiff's husband. Though the claim of the plaintiffs' husband was denied categorically
by the defendant as early as 2-6-1961, no suit had been filed by him during his lifetime
for the recovery of possession of the cinema equipment or for recovery of the amount
advanced by him. However, the plaintiffs' husband filed a suit, O. S. No. 124 of 1961, on
the file of the District Munsif Sompeta, for the recovery of the mortgage amount of Rs.
4,000/- against the Raja of Mandasa and the defendant. That suit was decree ex parte and
the proceedings to set aside the ex parte decree are said to be pending in this High Court.

3. As the plaintiff's husband was sick in 1963 and continued to be so till 7-8-1965 when he
died, the plaintiff filed the present suit for declaration that she is the owner of the cinema
equipment such a projector and diesal oil engine etc., embodied in the plaint schedule
site relating to the cinema concern known as Kumar Touring Talkies, and for directing
the defendant to remove the said cinema equipment and deliver the same to the plaintiff,
or in the alternative, for recovery of a sum of Rs. 19,833/- being the values of the
machinery, with subsequent interest and for costs. The suit claim was resisted by the
defendant contending inter alia that it was he, but not the plaintiff's husband , who is real
owner of the Kumar Touring Talkies, that he had obtained the mortgage deed from the
Raja of Mandasa though he got the deed executed benami in the name of the plaintif's
husband, that it was he who really obtained the hire purchase agreement from the
Commercial Credit Corporation, Madras in the name of the plaintiffs' husband, that he
had paid the instalments as per the agreement, that he did to borrow any amount from
the plaintiff's husband and that the suit pertains to the recovery of possession of movable
property and is, therefore, barred by limitation. It is further stated that the defendant
removed the equipment, machinery, projector etc. in December, 1961, and January, 1962,
that his attempt to obtain a licence in his name from the concerned authorities in his name
from the concerned authorities was unsuccesful on account of the attitude of the plaintiff's
husband and that there is no merit in the suit.

4. The trial Court, framed as many as 16 issues as specified in paragraph 10 of its

judgment, Issues 9 and 11 were recast on 19-10-1970. The plaintiff examined P. Ws. 1 to 4
and marked Exs. A-1 to A-49 in support of her claim. The defendant examined himself as
D. W. 1 in addition to examining D. Ws. 2 and 3 and filed Exs. B-1 to B-75 in support of
his defence.

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 5. The trial Court, on a consideration of the material on record, has found that the cinema
equipment as well as the oil engine which were embedded in the earth are immovable
property and, therefore, the suit was within the period of limitation, that the suit property
really belonged to the plaintiff's husband who had entrusted the management of the
cinema concern and the suit premises to the defendant and that it was the plaintiff's
husband that entered into the hire purchase agreement with the Commercial Credit
Corporation, Madras. In the result, declaring the plaitiff's husband and after his death,
the plaintiff as the owner of the suit property, a decree for the recovery of Rs. 19,388/- was
granted to the plaintiff. Hence, this appeal.

6. The principal contention of Mr. S. Ramamurthy the learned counsel appearing for the
appellant, is that the cinema projector and the oil engine and their accessories are movable
property and they do not become immovable property on their being embedded in or
fastened to any property in the Kumar Touring Talkies as the intention and object of
fixing the same was to have the beneficial enjoyment of the equipment and machinery
but not to benefit the land. On such premise, it is argued that the suit being one related
to movable property, should have been preferred within 3 years from the date of the
refusal or denial of the plaintiff's claim by the defendant on 2-6-1961 and the present suit
filed on July 20, 1966 is, therefore, barred by limitation. He also contended that it is the
appellant, but not the plaintiff's husband, that was the real owner of the suit property and
the plaintiff has no claim to the suit property.

7. Mr. Gangadhara Rao, the learned counsel appearing for the respondent, opposed the
claim of the appellant contending inter alia that the suit for declaration of the plaintiff's
title to the cinema concern is maintainable and is within the period of limitation, as the
recovered, is immovable but not movable property and there is no justifiable ground for
interference with the findings of fact arrived at by the trial Court relating to the ownership
of the Cinema equipment and oil engine and the appeal merits dismissal.

8. Upon the respective contentions of the parties, the following questions arise for our
decisions. (1) Whether, on the facts and in the circumstances, the suit for the recovery of
possession of the cinema equipment, and the diesal oil engine and their accessories or, in
the alternative, for recovery of their value, is barred by limitation as pleaded by the
defendant? (2) Whether the plaintiff's husband and after his death, the plaintiff is entitled
to the cinema equipment and the diesel oil engine and their accessories?

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 9. It is well-settled that a suit for declaration of title to, or for recovery of possession of,
immovable property can be filed within 12 years from the date of the refusal or denial of
the plaintiff's right by the opposing party. However, in the case of movable property, such
a suit must be filed within 3 years from the date of refusal or denial of the plaintiff's right.
The answer to the point relating to limitation depends upon the nature and character of
the property whose possession is sought to be recovered by the plaintiff. If the property
in respect of which the declaration is sought for and of which delivery of possession is
prayed for, or in lieu of which alternative claim for recovery of money is made, is found
to be immovable but not movable property the present suit filed 5 years after the denial
by the defendant of the plaintiff's right must be held to be within the period of limitation.
But, on the other hand, if the reliefs sought for are construed to be in respect of movable
property as contended by the appellant the suit must be held to be barred by limitation
as it is filed beyond the period of three years. The pertinent question that falls for decision
is whether the reliefs sought for in the plaint relate to movable or immovable property.

10. Before adverting to the facts and circumstances of the case, for the purpose of
determining whether the suit relates to movable or immovable property, it is not only
profitable but relevant and necessary to briefly refer to the concept and the content of the
expression "movable property" and 'immovable property' and the case law on that aspect.
The expressions 'Movable Property' and 'Immovable Property' have not been defined
under the Limitation Act whose provisions are applicable to decide the point of
limitation. However, they have been defined under the General Clauses Act, Transfer of
Property Act and the Registration Act which we shall presently indicate. The expression
'immovable property' has been defined under clause (26) of Section 3 of the General
Clauses Act, 1897 as follows : "Immovable property shall include land, benefits to arise
out of land, and things attached to the earth or permanently fastened to anything attached
to the earth." Clause 36 of Section 3 of the General Clauses Act, 1897, defines 'movable
property' as 'property of every description except immovable property'. The same
definitions have been provided under clauses (14) and (19) of Section 3 of the Andhra
Pradesh General Clauses Act, 1897. 'Movable Property' is defined in clause (9) of Section
2 of the Registration Act as including 'standing timber, growing crops and grass , fruit
upon and juice in trees , and property of every other description, except immovable
property." 'Immovable Property' defined in clause (6) of Section 2 of the said Act. 'includes
land, buildings and things attached to the earth or permanently fastened to anything
which is attached to the earth, but not standing timber, growing crops nor grass." The

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 definitions in the Transfer of Property Act, 1882 may now be noted. Section 3 of the
Transfer of Property Act defines "immovable property" thus :- "Immovable property does
not include standing timber, growing crop or grass." The expression "attached to the
earth" means (a) rooted in the earth, as in the case of trees and shrubs; (b) embedded in
the earth, as in the case of walls or buildings or (c) attached to what is so embedded for
the permanent beneficial enjoyment of that to which it is attached."

11. From a reading of the statutory definitions of the terms "movable property" and
"immovable property" referred to above, it is manifest that things attached to the earth or
permanently fastened to anything attached to the earth are not movable but immovable
property. The machinery in question, i.e., the cinema projector, diesel oil engine and their
accessories does not fall within any of the categories of immovable property. Though it is
really movable property , it may become immovable property if it is attached to the earth
or permanently fastened to anything which is attached to the earth. The enquiry should
be not whether the attachment is direct or indirect but what the nature and character of
the attachment and the intendment and object of such attachment are.

12. The English law of fixtures has no strict application to the law in India relating to
machinery attached to the earth or permanently fastened to anything attached to the
earth, in view of the statutory definitions pointed out earlier. We may, however, notice
some English decisions wherein certain tests or guidelines for determining whether any
machinery is movable or immovable property have been laid down.

13. In Holland v. Hodgson, (1872) 7 CP 328 at p. 334 looms attached earth and floor of a
worsted mill were held to be fixtures. Therein, it was observed by Blackburn, J. as follows
: "................ the general maxim of the law is, that what is annexed to the land becomes
part of the land; but it is very difficult , if not impossible , to say with precision what
constitutes an annexation sufficient for this purpose. It is a question which must depend
on the circumstances of each case, and mainly on two circumstances, as indicating the
intention viz., the degree of annexation and the object of the annexation. 14. In Leigh v.
Taylor, (1902 AC 157 at p. 161) the House of Lords held that certain valuable tapestries
affixed by a tenant to the walls of a house for the purpose of ornament and for the better
enjoyment of them as chattels had not become part of the house, but formed part of the
personal estate of the tenant for life. It was observed by the learned Lord Chancellor
Halsbury that there were no real divergences of opinion amongst different judges except
that "facts have been regarded in different aspects according to the fashion of the times,

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 the mode of ornamentation , and the mode in which houses were built, and the degree of
attachment which from time to time to time become necessary or not according to the
nature of the structure which was being dealt with. The principle appears to me to be the
same today as it was in early times, and the broad principle is that, unless it has become
path of the house in any intelligible sense, is not a thing which passes to the heir." The
same view was reiterated in Spyer v. Phillipson , (1931-2 Ch 183).

15. The two guidelines evolved by the English Courts have been accepted by the Courts
in India for being followed while considered the question whether any machinery
imbedded in the earth or fastened to anything attached to the earth is movable or
immovable property. In Narayana Sa. v. Balaguruswami, (AIR 1924 Mad 187),
Kumaraswami Sastriar, J. held that copper Stills which were placed upon two iron rails
in a distillery building and which could be removed by pulling down the brick and the
mud wall put up on one side for the purpose of keeping them in position, were movables.
The machinery fixed in a building for the purpose of baling cotton was held by the
Allahabad High Court in Megraj v. Krishna Chandra, (AIR 1924 All 365), to be movable
property. In Subhrahmaniam Firm v. Chidambaram, (AIR 1940 Mad 527 at p. 529), the
machinery installed by a tenant for running a cinema in the premises taken by him on
lease for his own profit, was held to be movable property within the meaning of Section
3 of the Transfer of Property Act, as it was not a permanent improvement to the premises.
We may notice the following passage in the judgment of the learned Judges, Wadsworth,
and J.: "If a thing is imbedded in the earth or attached to what is so imbedded for the
permanent beneficial enjoyment of that to which it is attached, then it is part of the
immovable property. If the attachment of the chatter itself, then it remains a chatter, even
though fixed for the time being so that it may be enjoyed. The question must in each case
be decided according to the circumstances." A Division Bench of the Madras High Court,
in Mohammed Ibrahim v. Northern Circars Fibre Trading Co., Coconada, 1944 (2) Mad
LJ 60 at p. 64 (AIR 1944 Mad 492) was of the view that the machinery installed on a cement
platform and held in position by being attached to iron pillars fixed in the ground, was
immovable property, as the annexation was made by the person who owned the building
as well as the machinery. The learned Judge, Krishnaswami Ayyangar, J., who spoke for
the Court, observed thus: "It is obvious that his object was to become the owner of both
for the purpose of carrying on a business and for his own and individual benefit. If the
argument is correct, namely, that the same intention which the vendors had must be
attributed to the purchaser, the only way of establishing a different in only way of

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 establishing a different intention would be by the purchaser removing the machinery
from the ground to which it was annexed and again attaching it with the express intention
of making it part of the land. We cannot imagine that the law requires any such procedure
to the adopted for inferring an intention on the part of the purchaser to make the
machinery part of the land ." In Board of Revenue v. Venkataswami Naidu, a Full Bench
of the Madras High Court held that a lease of the properties relating to a touring cinema
is not chargeable to stamp duty as the equipment of the touring cinema which is capable
of being removed and collapsible does not fall within the category of immovable
property. To the same effect is the decision of another Division Bench of the Madras High
Court in Perumal Naicker v. Ramaswami Kone, wherein a Petter engine mounted and
fastened to a cement base was found to be immovable property on the ground that it was
fixed to the earth for the beneficial enjoyment of the property during its lease. Where the
machinery owned by one person was attached to the land belonging to another, it was
held by a Division Bench of the Nagpur High Court in J. H. Subbaiah v. Govind Rao, (AIR
1953 Nag 224) that the machinery is movable property. However, a boiler engine and a
decorticator fixed and imbedded in a ginning and decorticating factory building were
held by a Division Bench of this Court in Chetty & Co. v. Collector of Anantpur, to be
immovable property, as they had been fixed for the beneficial use of the building as a
factory.

16. From the foregoing discussion, the following principles emerge: The question whether
any machinery such as an oil engine imbedded in earth or permanently fastened to
anything attached to the earth is movable or immovable property, is a mixed question of
fact and law depending upon the facts and circumstances of each case. There is no
statutory test or guideline having universal application, for the determination of the
nature or circumstances by itself may not be conclusive or decisive, but the cumulative
effect or the totality of the material facts and circumstances must be taken as a fair and
reasonable guide to determine the nature of the property in a given case. The English law
of fixtures has no strict application to this aspect of the law in so far as our country is
concerned, in view of the statutory definitions of the expressions 'immovable property'
and 'movable property' in the General Clauses Act. Transfer of Property Act and
Registration Act.

17. The tests enunciated by the decided cases to determine the character and nature of the
property are: (I) What is the intendment, object and purpose of installing the machinery

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 -- Whether it is the beneficial enjoyment of the building, land or structure, or the
enjoyment of the very machinery? (ii) The degree and manner of attachment or
annexation of the machinery to the earth. Where the machinery and the building or land
on which it is installed, are owned by one and the same person, normally it should be
inferred, unless the contrary is proved, that the object and purpose of installing the
machinery is to have beneficial enjoyment of the entire building or land, but not the sole
enjoyment of the very machinery is to have beneficial enjoyment of the entire building or
land, but not the sole enjoyment of the very machinery itself. However, where the
machinery imbedded or installed and the building or land belong to two different
powers, the intendment and object of the person who is in possession and enjoyment of
the property in installing or annexing the machinery must normally be presumed, until
the contrary is proved, to be to exploit the benefit of the machinery alone, as he is not
interested in the building or the land. Where the building or land or factory is taken on
lease for a term by a lessee and he installs certain machinery on that property during the
lease period, it has to be held the machinery was the beneficial enjoyment of the very
machinery during the period of his lease. A tenant, who is in possession of land for a
certain period, would not intent to make any permanent improvement to the land itself
but try to make use of any machine or oil engine during the period of his lease. In all
probability, he may remove the oil engine or machine from the land the moment his object
of its beneficial enjoyment during his lease period is achieved. In such a case, fixtures on
the land cannot be termed to be a permanent one so as to bring it within the meaning of
immovable property. The nature of the stalled is also a relevant and material factor to be
taken into consideration in determining the character of the machinery. Where the
building in which machinery such as an oil engine or a cinema projector has been
installed by the owner, is not a pucca and permanent one, but it only a temporary shed
or tent, his intention and purpose could only be the beneficial enjoyment of the very
machinery but not the building. However, where a cinema projector and an oil engine
have been installed in a permanent cinema theatre, purpose and object of installing the
same must invariably be the beneficial enjoyment of the very cinema theatre. The
intendment, object and purpose of the person who fastens or installs the machinery has
to be inferred from the proved facts and admitted circumstances.

18. On the application of the aforesaid principles, we shall now proceed to examine the
facts and circumstances of the case on hand for the purpose of determining whether the
cinema equipment such as cinema projector and diesal oil engine in question is movable

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 or immovable property. The cinema concern is a touring talkie. It is not a pucca cinema
hall, but it is only a temporary shed build partly with zinc sheets and partly with oil cloth.
The cabin portion is built with zinc sheets and the remaining intent is covered with oil
cloths. The cinema concern, as its very name "Kumar Touring Talkies" indicates, is a
temporary concern. The management of the concern obtained permission to exhibit
shows temporarily during the period for which a temporary licence has been granted by
the concerned authorities. It admits of no doubt that a touring talkie would not be
generally at one and the same place permanently but it will be moved freely from place
to place depending upon the demand and the convenience of the proprietor.
Indisputable, the land on which the said kumar Touring Talkies has been raised, really
belongs to the Raja of Mandasa. The claimant of the touring talkies, be it the appellant or
the respondent's husband, must be held to be a usufactuary mortgagee of the land
belonging to the Raja of Mandasa. The lease obtained for running the Kumar Touring
Talkies was only for a period of one year, after the expoiry of which there was no
guarantee or assurance that the management of the concern would automatically get
extension of period for running the shows. The management may or may not obtain such
extension. In fact, on account of the disputes that cropped up between the appellant and
the plaintiff's husband, no one could successfully obtain the requisite permission from
the concerned authorities for running the cinema shows after expiry of one year period
originally granted . The person, be he the appellant or the plaintiff's husband, who
installed the cinema equipment on the land owned by the Raja of Mandasa, during the
lease period for the specific and limited purpose of exhibiting cinema shows, being the
usufactuary mortgagee of the land but not the owner thereof, must have intended to have
only the beneficial enjoyment of the cinema equipment, but would not have intended to
benefit the very land which was not owned by him. The lessee or the usufactuary
mortgagee of the land, which was not owned by him. The lessee or the usufactuary
morgagee of the land, in installing the diesal oil engine, cinema projector etc., must
invariably have intended to make use of the said equipment during the limited lease
period and thereafter , separate the same from the land, as he was not interested, in the
improvement of the land belonging to another . On a careful consideration of the entire
facts and circumstances, we are of the firm view that the intendment, object and purpose
of installing the cinema equipment in question, was only to have the beneficial enjoyment
of the very equipment during the period of the lease or mortgage. That apart, the diesal
oil engine and the cinema projector are not rooted in the earth as in the case of trees and

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 shurbs, or imbedded in the earth as in the case of walls or buildings, or attached to what
is so imbedded for the permanent beneficial enjoyment of that to which they are attached.
In the circumstances, the equipment or machinery must be held to have not been attached
to the earth within the meaning of the expression "attached to the earth" under Section 3
of the Transfer of Property Act. The machinery is not only not attached to the earth, but
also not permanently fastened to anything attached to the earth. Hence, the machinery in
question must be held to be movable property but not immovable property. On that
premise, it must be held that the suit for the recovery of possession, or in the alternative,
for recovery of the value of such movable property, beyond the period of three years after
the denial by the defendant of the plaintiff's right, is barred by limitation.

19. The contention of Mr. Gangadhara Rao that the suit, as framed, is not barred by
limitation and that the subsequent withdrawal by the plaintiff of her claim for declaration
of her right to the cinema equipment, would not disentitle her to continue the suit in
respect of the other reliefs cannot be acceded to. This submission of the counsel is based
on the assumption that the prayer for declaration of the plaintiff's right to the cinema
equipment relates to immovable property. We have earlier held that the cinema projector
and the diesal oil engine etc., are movable property. That apart, the very declaration, as
revealed from the plaint, appears to only in respect of the cinema equipment, but not the
touring talkies. We are satisfied that he declaration sought for by the plaintiff is only in
respect of movable property but not immovable property.

20. Hench this submission of the plaintiff has no leges to stand. The suit must have been
filed within three years from the date of the refusal or denial by the defendant of the right
of the plaintiff's husband to the suit property. We may also add that the conduct of the
plaintiff in not filing the suit within three years after the denial of her right to the suit
property by the defendant, is a material factor to be taken into consideration factor to be
taken into consideration. For all reasons stated, question No. 1 is answered in the
affirmative and in favour the appellant.

21. In view of our finding that the suit is barred by limitation, we do not find it necessary
to advert to question No. 2 relating to the ownership of the property.

22. In the result, the appeal is allowed setting aside the judgment and decree of the Court
below, with costs throughout.

23. Appeal allowed.

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 Duncans Industries Ltd v State of U.P. & Ors
(2000) SCC 633
SANTOSH HEGDE, J. A Deed of Conveyance dated 9.6.1994 executed by a
company named ICI India Ltd. in favour of Chand Chhap Fertilizer and Chemicals
Ltd. when presented for registration, the concerned Registrar referred the said
document under Section 47-A(II) of the Stamp Act to the Collector complaining of
the non-compliance of Section 27 of the said Act and praying for proper valuation
to be made and to collect the stamp duty and penalty payable on the said
document. The Collector after inquiry levied a stamp duty of Rs.37,01,26,832.50
and a penalty of Rs.30,53,167.50. The said order came to be challenged by the
aggrieved party in a revision under Section 56 of the Stamp Act before the Chief
Controlling Revenue Authority in Stamp Revision No.36/95-96 and the said
Revisional Authority as per his order dated 4.4.95 partly allowed the challenge and
so far as the imposition of penalty was concerned the same was set aside and
slightly modified the stamp duty levied by the Collector. Consequent to the order
of the Revisional Authority, the appellant herein became liable to pay stamp duty
on the said Deed of Conveyance amount to Rs.36,68,08.887.50. This order of the
Revisional Authority came to be challenged before the High Court in Civil Misc.
Writ Petition No.9170/95 which came to be dismissed and as against this order of
the High Court of Judicature at Allahabad dated 7.7.1997, the appellant has
preferred the above civil appeal.

2. Briefly stated, the facts leading to the controversy in question are as follows :
ICI India Ltd., a company registered under the Companies Act, 1956 executed an
agreement of sale dated 11.11.1993 wherein it agreed to transfer on an as is where
is basis and as a going concern its fertilizer business of manufacturing, marketing,
distribution and sale of urea fertilizer in favour of Chand Chhap Fertilizer and
Chemicals Ltd. (hereinafter referred to as the CCFCL) also a company
incorporated under the Companies Act, 1956 which company has since been
renamed as M/s. Duncans Industries Limited, Fertilizer Division, Kanpur Nagar
(the appellant herein) for a total sale consideration of Rs.70 crores which was
termed as slump price in the agreement. The said agreement also stated that the
vendor would on the transfer date transfer the fertilizer business by actual delivery

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 of possession to the CCFCL in respect of such of the estates and properties
mentioned in the agreement as were capable of being transferred by actual and/or
constructive delivery and in respect of the estates requiring transfer by execution
of necessary documents vesting the title thereof in CCFCL, and it was further
agreed and declared that the ownership in respect of the assets and properties
comprised in the fertilizer business to be transferred as per the agreement, would
be deemed to be vested in CCFCL on and from the transfer date which, according
to the agreement means 1.12.1993 or such other date as may be agreed to by and
between ICI India and CCFCL. The term fertilizer business was defined to mean
and include the following other properties : (i) Demised land being plot nos. 2B
and 5 and the sub-divided portion of plot No.2 demarcated and admeasuring in
the aggregate an area of 243.4387 acres equivalent to 9,85,159.50 sq. mtrs. Being the
unshaded portion shown on the plan annexed hereto together with the buildings
and structures thereon forming part of the fertilizer business as on the Transfer
Date; (ii) freehold land and residential building thereon with the name
Chandralok, situate at plot no.4/284, Parbati Bangla Road, Kanpur comprising 94
residential flats; (iii) freehold land and residential building thereon with the name
Chandrakala, situate at Navsheel Apartments, 56 Cantonment, Kanpur
comprising a Guest House on the ground floor and 3 residential flats on the first
floor; (iv) Plant and machinery relating to the Fertilizer business including the
Ammonia Manufacturing Plants, the Captive power plant and all other movable
capital assets including vehicles, furniture, air-conditioners, stand-by systems,
pipelines, railway siding etc., as on the Transfer Date and wheresoever situate, all
of which relate exclusively to the Fertilizer Business and are owned and in the
possession of ICI or are owned by ICI but in the lawful possession of any third
party for and on behalf of ICI:

3. Pursuant to the said agreement, a deed of conveyance dated 9.6.1994 was

executed by the said ICI in favour of CCFCL, on the presentation of the said
Conveyance Deed for registration. The Sub- Registrar made a reference to the
Collector under Section 47-A(2) of the Stamp Act, 1899 (hereinafter referred to as
the Act) stating that in the document under reference all the details required under
Section 27 of the Act had not been given by the parties, hence valuation and

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 examination is essential and requested the Collector to determine the value as
required under the Act and the Rules and to take action to realise the deficit stamp
duty and penalty. Consequent upon this reference made by the Sub- Registrar, the
Collector after necessary inquiry as per his order dated 20.2.1995 referred to above,
levied stamp duty and penalty to which reference has already been made. Being
aggrieved by the said order of the Collector, the appellant preferred a revision
petition to the Chief Controlling Revenue Authority who, as already stated, by his
order dated 9.6.1994 set aside the penalty and modified the duty payable to
Rs.36,68,08,887.50 which order came to be challenged before the High Court
unsuccessfully. Before the High Court the appellant had challenged the authority
of the Sub-Registrar to make a reference to the Collector on the ground that there
was no material to entertain any reason to believe that the market value of the
property which was the subject-matter of the conveyance deed had not been truly
set forth in the instrument. The High Court negatived the said contention after
considering the arguments of the appellant in detail, and before us no argument
has been advanced on this score. Mr. M L Verma, learned senior counsel appearing
for the appellant, urged that the High Court committed an error in coming to the
conclusion that the plant and machinery which were transferred by the vendor to
the appellant, were immovable properties, attracting the provisions of the Stamp
Act and at any rate under the conveyance deed dated 9.6.1994, the vendor had not
conveyed any title to the appellant in regard to these plant and machinery. He also
contended that the High Court erred in relying upon paragraphs 10 and 11 of the
conveyance deed to come to the conclusion that the plant and machinery were the
subject- matter of the said deed. He contended that the said paragraphs merely
made a reference to an earlier instrument and mere reference to some earlier
transaction in a document does not amount to incorporation in that document of
the terms and conditions relating thereto.

4. It was also contended that the High Court failed to look into the intention of the
parties who by an agreement dated 11.11.1993 had treated the plant and
machinery as movables and have delivered possession of the said plant and
machinery as movables on 11.12.1993. Hence, the said plant and machinery is
neither immovable property nor the property which has been transferred by virtue
of the deed of conveyance dated 9.6.1994. Therefore, the value of the said plant and

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 machinery could not have been taken into consideration for the purpose of
arriving at the correct and true value of the property conveyed under the deed of
conveyance. He also contended that the valuation in regard to the plant and
machinery made by the authorities and as accepted by the High Court is incorrect
and contrary to law. Mr. Gopal Subramaniam, learned senior counsel appearing
on behalf of the State, in reply, contended that the document dated 11.11.1993
(agreement of sale and transfer of fertilizer business) by ICI in favour of the CCFCL
contemplated an agreement to transfer the business of manufacturing, marketing,
distribution and sale of urea fertilizer that is fertilizer business itself with a
stipulation that the first stream, second stream and the third stream urea
manufacturing plants as well as the Ammonia manufacturing plants would also
be transferred as a part of the transfer of fertilizer business of the ICI as a going
concern. He also contended that a reading of the document at Para 1(e)(i) which
defines fertilizer business clearly shows that the intention of the vendor was to
transfer all properties that comprised the fertiliser business. He also drew our
attention to the observations of the High Court which had in specific terms noted
that the learned counsel representing the appellant before it, had not seriously
challenged the valuation made by the authorities, hence he contended that the
challenge made to the valuation by the appellant before us should not be
countenanced. We have heard learned counsel for the parties and the question that
arises for our consideration is : whether by the conveyance deed dated 9.6.1994,
the plant and machinery were also transferred; and if so, whether the High Court
was right in accepting the valuation as made by the authorities for the purpose of
stamp duty payable ? Considering the question whether the plant & machinery in
the instant case can be construed as immovable property or not, the High Court
came to the conclusion that the machineries which formed the fertilizer plant, were
permanently embedded in the earth with an intention of running the fertilizer
factory and while embedding these machineries the intention of the party was not
to remove the same for the purpose of any sale of the same either as a part of a
machinery or scrap and in the very nature of the user of these machineries, it was
necessary that these machineries be permanently fixed to the ground. Therefore, it
came to the conclusion that these machineries were immovable property which
were permanently attached to the land in question.

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 5.While coming to this conclusion the learned Judge relied upon the observations
found in the case of Reynolds v. Ashby & Son (1904 AC 466) and Official
Liquidator v. Sri Krishna Deo & Ors. (AIR 1959 All. 247). We are inclined to agree
with the above finding of the High Court 105 that the plant and machinery in the
instant case are immovable properties. The question whether machinery which is
embedded in the earth is movable property or an immovable property, depends
upon the facts and circumstances of each case. Primarily, the court will have to
take into consideration the intention of the parties when it decided to embed the
machinery whether such embedment was intended to be temporary or permanent.
A careful perusal of the agreement of sale and the conveyance deed along with the
attendant circumstances and taking into consideration the nature of machineries
involved clearly shows that the machineries which have been embedded in the
earth to constitute a fertiliser plant in the instant case, are definitely embedded
permanently with a view to utilise the same as a fertiliser plant. The description of
the machines as seen in the Schedule attached to the deed of conveyance also
shows without any doubt that they were set up permanently in the land in
question with a view to operate a fertilizer plant and the same was not embedded
to dismantle and remove the same for the purpose of sale as machinery at any
point of time. The facts as could be found also show that the purpose for which
these machines were embedded was to use the plant as a factory for the
manufacture of fertiliser at various stages of its production. Hence, the contention
that these machines should be treated as movables cannot be accepted. Nor can it
be said that the plant and machinery could have been transferred by delivery of
possession on any date prior to the date of conveyance of the title to the land.

6. Mr. Verma, in support of his contention that the machineries in question are not
immovable properties, relied on a judgment of this Court in Sirpur Paper Mills
Ltd. v. Collector of Central Excise, Hyderabad (1998 1 SCC 400). In the said case,
this Court while considering the leviability of excise duty on paper-making
machines, based on the facts of that case, came to the conclusion that the
machineries involved in that case did not constitute immovable property. As
stated above, whether a machinery embedded in the earth can be treated as
movable or immovable property depends upon the facts and circumstances of
each case. The Court considering the said question will have to take into

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 consideration the intention of the parties which embedded the machinery and also
the intention of the parties who intend alienating those machinery. In the case cited
by Mr. Verma, this Court in para 4 of the judgment had observed thus : In view of
this finding of fact, it is not possible to hold that the machinery assembled and
erected by the appellant at its factory site was immovable property as something
attached to earth like a building or a tree. The Tribunal has pointed out that it was
for the operational efficiency of the machine that it was attached to earth. If the
appellant wanted to sell the paper-making machine it could always remove it from
its base and sell it." From the above observations, it is clear that this Court has
decided the issue in that case based on the facts and circumstances pertaining to
that case hence the same will not help the appellant in supporting its contention
in this case where after perusing the documetns and other attending circumstances
available in this case, we have come to the conclusion that the plant and machinery
in this case cannot but be described as an immovable property. Hence, we agree
with the High Court on this point. The next question for consideration is whether
the vendor did transfer the title of the plant and machinery in the instant case by
the conveyance deed dated 9.6.1994. Here again, it is imperative to ascertain the
intention of the parties from the material available on record. While ascertaining
the intention of the parties, we cannot preclude the contents of the agreement
pursuant to which the conveyance deed in question has come into existence.

7. We have noticed that as per the agreement it is clear what was agreed to be sold
is the entire business of fertilizer on an as is where is basis including the land,
building thereon, plant and machinery relating to fertilizer business description of
which is found in the definition of the term fertilizer business in the agreement
itself which has been extracted by us hereinabove. It is not the case of the appellant
when it contends that the possession of plant and machinery was handed over
separately to the appellant by the vendor that these machineries were dismantled
and given to the appellant, nor is it possible to visualise from the nature of the
plant that is involved in the instant case that such a possession de hors the land
could be given by the vendor to the appellant. It is obviously to reduce the market
value of the property the document in question is attempted to be drafted as a
Conveyance Deed regarding the land only. The appellant had embarked upon a
methodology by which it purported to transfer the possession of the plant and

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 machinery separately and is contending now that this handing over possession of
the machinery is de hors the conveyance deed. We are not convinced with this
argument. Apart from the recitals in the agreement of sale, it is clear from the
recitals in the conveyance deed itself that what is conveyed under the deed dated
9.6.1994 is not only the land but the entire fertilizer business including plant and
machinery. A perusal of Clauses 10, 11 and 13 of the said deed shows that it is the
fertilizer factory which the vendor had agreed to transfer along with its business
as a going concern and to complete the same the conveyance deed in question was
being executed. There is implicit reference to the sale of fertilizer factory as a going
concern in the conveyance deed itself. That apart, the inclusion of Schedule III to
the conveyance deed wherein a Plan delineating the various machineries
comprising of the fertilizer factory is appended shows that it is the land with
standing fertilizer factory which is being conveyed under the deed, though an
attempt to camouflage this part of the property sold is made in the recitals, in our
opinion, the parties concerned have not been able to successfully do so. While
considering this question of transfer of plant and machinery being part of the
conveyance deed or not, reliance can also be placed on the application filed by the
appellant before the appropriate authority of the Income-Tax Department wherein
while disclosing the market value of the immovable property sought to be
transferred the appellant himself has mentioned the value of the property so
transferred as Rs.70 crores which is the figure found in the agreement of sale which
agreement includes the sale of plant and machinery along with the land. A
certificate issued by the appropriate authority under Section 269 UL(3) of the
Income Tax Act evidences this fact. In the said application made by the appellant
for obtaining the said certificate, the appellant has in specific terms at serial No.
(iv) of the Schedule included plant and machinery, railway sliding and other
immovable properties as part of the fertilizer business undertaking. It is also found
on record that by a supplementary affidavit dated 8.9.1993 filed before the Income
Tax department while filing Form 37-I prescribed under the Income-tax Rules the
petitioner has again shown all these plant and machinery along with the Plan
which is now attached to the conveyance deed as part of the property that is being
conveyed. Merely because in some of the relevant paragraphs of the Conveyance
Deed the appellant has tried to highlight the fact that what is being sold under the
conveyance deed is only the land and a reference is made in regard to the handing

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 over of possession of the machinery on an earlier date does not ipso facto establish
that the vendor did not convey the title of the plant and machinery under the
conveyance deed dated 9.6.1994.

8. Learned counsel for the appellant has placed for our consideration a judgment
of this Court in the case of Himalaya House Co. Ltd., Bombay v. The Chief
Controlling Revenue Authority (1972 1 SCC 726) to contend that a mere reference
to an earlier agreement does not amount to incorporation of the terms and
conditions of an earlier transaction or the intention of the parties. We have
carefully considered the said judgment and, in our opinion, that judgment does
not in any manner lay down the law in absolute terms that a court cannot look into
prior agreements while considering the intention of the parties for finding out
what actually is the property that is conveyed under the deed under consideration.
It is again based on facts of that case that this Court came to the conclusion therein
that the so called terms and conditions which were found in an earlier agreement
were not intended to be incorporated in the subsequent document. This is clear
from the following observations of this Court appearing in Para 10 of the said
judgment: From the language used in the Assignment Deed, it is not possible to
come to the conclusion that the terms and conditions of the earlier transaction have
been made a part of that Deed. Further barring one particular agreement, other
agreements were not before the Court. Therefore, it is not possible to know what
the terms and conditions of those agreements were. Before the terms and
conditions of an agreement can be said to have been incorporated into another
document, the same must clearly show that the parties thereto intended to
incorporate them. No such intention is available in this case.

9. Hence we are of the opinion that this judgment also does not help the appellant
in his attempt to convince us that we should not take into consideration the recitals
in the agreement dated 11.11.93 while considering the conveyance deed of
9.6.1994. For the reasons stated above, we are of the considered opinion that the
vendor as per the conveyance deed dated 9.6.1994 has conveyed the title it had not
only in regard to the land in question but also to the entire fertilizer business in as
is where is condition including the plant and machinery standing on the said land.
Therefore, the authorities below were totally justified in taking into consideration

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 the value of these plant and machineries along with the value of the land for the
purpose of the Act. The next point to be considered is whether the High Court was
justified in accepting the valuation made by the authorities in regard to the plant
and machinery. Here we must note that in the judgment of the High Court, the
learned Judge has noted as follows : In fact the finding on valuation of plant and
machinery was not seriously challenged by Shri Shanti Bhushan during the course
of argument and, in my opinion, rightly. It is based on this approach of the learned
counsel appearing for the appellant that the High Court did not go into the
question of valuation. However, since the learned counsel for the appellant did
question the correctness of the valuation made by the authorities below, we have
heard the arguments addressed in this regard. We have also heard the arguments
on behalf of the State on this score.

10. The question of valuation is basically a question of fact and this Court is
normally reluctant to interfere with the finding on such a question of fact if it is
based on relevant material on record. The main objection of the appellant in regard
to the valuation arrived at by the authorities is that the Collector originally
constituted an Enquiry Committee consisting of the Assistant Inspector General
(Registration), General Manager, District Industries Centre, Sub-Registrar and the
Tehsildar. After the report was submitted by the Sub-Committee for the reasons of
its own, the Collector reconstituted the said Enquiry Committee by substituting
Additional City Magistrate in place of Sub-Registrar. This substitution of the
Enquiry Committee, according to the appellant, is without authority of law. We
are unable to accept this contention. Constitution of an Enquiry Committee by the
Collector is for the purpose of finding out the true market value of the property
conveyed under the Deed. In this process, the Collector has every authority in law
to take assistance from such source as is available, even if it amounts to
constituting or reconstituting more than one Committee. That apart, the appellant
has not been able to establish any prejudice that is caused to it by reconstitution of
the Expert/Enquiry Committee. We have perused that part of the report of the
Collector in which he has discussed in extenso the various materials that were
available before the Committee and also the report of the valuers appointed for the
purpose of finding out the value of the plant and machinery. These valuers are
technical persons who have while valuing the plant and machinery taken into

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 consideration all aspects of valuation including the life of the plant and machinery.
The valuations made both by the Enquiry Committee as well as the valuers are
mostly based on the documents produced by the appellant itself.

11. Hence, we cannot accept the argument that the valuation accepted by the
Collector and confirmed by the revisional authority is either not based on any
material or a finding arrived at arbitrarily. Once we are convinced that the method
adopted by the authorities for the purpose of valuation is based on relevant
materials then this Court will not interfere with such a finding of fact. That apart,
as observed above, even the counsel for the appellant before the High Court did
not seriously challenge the valuation and as emphasised by the High Court, rightly
so. Therefore, we do not find any force in the last contention of the appellant also.

12. For the reasons stated above, this appeal fails and the same is dismissed with
costs.

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 Kumar Harish Chandra Singh Deo v. Bansidhar Mohanty And Ors
AIR 1738, 1966 SCR (1) 153
The Judgment of the Court was delivered by Mudholkar, J. Two questions are
raised before us in this appeal from the judgment of the Orissa High Court. One is
whether the mortgage deed upon which the suit of the respondent no. 1 was based
was validly attested. The other is whether the respondent no. 1 was entitled to
institute the suit.

1. The mortgage deed in question was executed by the appellant in favour of

Jagannath Debata, respondent no. 2 on April 30, 1945, for a consideration of Rs.
15,000. The appellant undertook to repay the amount advanced together with
interest within one year from the execution of the deed. The appellant, however,
failed to do so. Respondent no. 1 therefore instituted the suit out of which this
appeal arises.

2. According to respondent no. 1 though the money was advanced by him to the
appellant he obtained the deed in the name of the second respondent Jagannath
Debata because he himself and the appellant were close friends and he felt it
embarrassing to ask the appellant to pay interest on the money advanced by him.
As the consideration for the mortgagee deed proceeded from him he claimed the
right to sue upon the deed. He, however, joined Jagannath Debata as the third
defendant to the suit. He also joined Dr. Jyotsna De as second defendant because
she is the transferee of the mortgaged property-which consists of a house, from
the appellant whose wife she is. This lady however remained ex parts. The
appellant denied the claim on various grounds but we are only concerned with
two upon which arguments were addressed to us. Those are the grounds which
we have set out at the beginning of the judgment. The third defendant Jagannath
Debata disputed the right of respondent no. 1 to institute the suit and claimed that
it was he who had advanced the consideration. His claim was, however, rejected
by the trial court and he has remained content with the decree passed by the trial
court in favour of respondent no. 1. The trial court decreed the suit of respondent
no. 1 with costs. Against that decree the appellant alone preferred an appeal before
the High Court. The contention raised by the appellant before us were also raised

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 by him before the High Court but were rejected by it. In our opinion there is no
substance in either of the contentions urged on behalf of the appellant. It is no
doubt true that there 1 5 5 were only two attesting witnesses to the mortgage deed,
one of whom was respondent no. 1, that is, the lender himself. Section 59 of the
Transfer of Property Act, which, amongst other things, provides that a mortgage
deed shall be attested by at least two witnesses, does not in terms debar the lender
of money from attesting the deed. The word "attested" has been defined thus in s.
3 of the Transfer of Property Act: " 'attested' in relation to an instrument means
and shall be deemed always to have meant attested by two or more witnesses each
of whom has seen the executant sign or affix his mark to the instrument, or has
seen some other person sign the instrument in the presence and by the direction
of the executant, or has received from the executant a personal acknowledgment
of his signature or mark or of the signature of such other person, and each of whom
has signed the instrument in the presence of the executant; but it shall not be
necessary that more than one of such witnesses shall have been present at the same
time, and no particular form of attestation shall be necessary."

3. This definition is similar to that contained in the Indian Succession Act. It will
see that it also does not preclude in terms the lender of money from attesting a
mortgage deed under which the money was lent. No other provision of law has
been brought to our notice which debars the lender of money from attesting the
deed which evidences the transaction whereunder the money was lent. Learned
counsel, however, referred us to some decisions of the High Courts in India. These
are Peary Mohan Maiti & Ors. v. Sreenath Chandra [14 Cal WN 1046] ; Sarur Jigar
Begun v. Barada Kanta I.L.R. 37 Cal. 526.and Gamati Ammal v. V. S. M. Krishna
Iyer A.I.R. 1954 Mad. 126. In all these cases it has been held that a party to a
document which is required by law to be attested is not competent to attest the
document. In taking this view reliance has been placed upon the observations of
Lord Selborne, L.C., in Seal v. Claridge [(18810 7QBD 516]. "It (i.e., the attestation)
implies the presence of some person, who stands by but is not a party to the
transaction." The object of attestation is to protect the executant from being
required to execute a document by the other party thereto by force, fraud or undue
influence. No doubt, neither the definition of 'attested' nor s. 59 of the Transfer of
Property Act debars a party to a mortgage deed from attesting it. It must, however,

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 be borne in mind that the law requires that the testimony of parties to a document
cannot dispense with the necessity of examining at least ,One attesting witness to
prove the execution of the deed. Inferentially, therefore, it debars a party from
attesting a document which is required by law to be attested. Where, however, a
person is not a party to the deed there is no prohibition in law to the proof of the
execution of the document by that person. It would follow, therefore, that the
ground on which the rule laid down in English cases and followed in India would
not be available against a person who has lent money for securing the payment of
which a mortgage deed was executed by the mortgagor but who is not a party to
that deed. Indeed it has been so held by the Bombay High Court in Balu Ravji
Charat v. Gopal Gangadh Dhabu[12 Ind Cas 531 (Bom)] and by the late Chief
Court of Oudh in Durga Din & Ors. v. Suraj Bakhsh [AIR 1931 Oudh 285]. In the
first of these cases an argument similar to the one advanced before us was
addressed before the Bombay High Court. Repelling it the court observed:

4."In Seal v. Claridge, much relied upon by the appellant's pleader the old case of
Svire v. Bell (1793) 5 T.R. 371, in which the obsolete rule was pushed to its farthest
extent, was cited to the Court but Lord Selbome in delivering judgment said :
'What is the meaning of attestation, apart from the Bills of Sale Act, 1878 ? The
word implies the presence of some person who stands by but is not a party to the
transaction.' He then referred to Freshly v. Reed (1842) 9 M & W 404 and said: 'It
follows from that case that the party to an instrument cannot attest it.' Again in
Wickham v. Marquis of Bath (1865) L.R.I Eq. 17 at p. 25, the remarks of the Master
of the rolls imply that if the plaintiffs Dave and Wickham had not executed the
deed as parties but had only signed with the intention of attesting, the provision
of the statute requiring two attesting witnesses would have been satisfied.'

5. A distinction was thus drawn in this case between a person who is a party to a
deed and a person who, though not a party to the deed is a party to the transaction
and it was said that the latter was not incompetent to attest the deed. This decision
was followed by the Chief Court of Oudh. We agree with the view taken by the
Bombay High Court. As regards the second question a number of High Courts in
India had taken the view that a benamidar could not maintain a suit for the
recovery of property standing in his name, beneficial interest in which was in

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 someone else. Benami transactions are not frowned upon in India but on the other
hand they are recognised. Indeed s. 84 of the Indian Trusts Act, 1882 gives
recognition to such transactions. Dealing with such transactions Sir George
Farewell has observed in Bilas Munwar v. Desrai Ranjit Singh: "It is quite
unobjectionable and has a curious resemblance to the doctrine of our English law,
that the trust of the legal estate results to the man who pays the purchase money,
and this again follows the analogy of our common law, that where a fulfillment is
made without consideration the use results to the offeror."

6. It must follow from this that the beneficial owner of property standing in the
name of another must necessarily be entitled to institute a suit with respect to it or
with respect to the enforcement of a right concerning the property of a co-sharer.
It will follow that a person who takes benefit under the transaction or who
provides consideration for a transaction is entitled to maintain a suit concerned
transaction. Thus where a transaction is a mortgage, the actual lender of money is
entitled to sue upon it. Indeed, till the decision of the Privy Council in Gur Narayan
& Ors. v. Sheo Lai Singh & Ors. (2) the right of a benamidar to sue upon a
transaction which is only ostensibly in his favour was not recognised by several
courts in India. Relying upon this decision it was con- tended before us on behalf
of the appellant that in view of this decision it must be held that it is the benamidar
alone who could maintain a suit but not the beneficial owner. That, however, is
not what the Privy Council decided. Indeed, that was never a question which arose
for consideration before the Privy Council. Apart from that on principle the real
beneficiary under a transaction cannot be disentitled to enforce a right arising
thereunder. In this view we uphold the decree of the High Court and dismiss the
appeal with costs. Appeal dismissed.

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 Ahmedabad Municipal Corporation v Haji Abdulgafur Haji Hussenbhai
Equivalent
1971 AIR 1201, 1971 SCR 63
Appeal from the judgment and order dated April 28, 29, 1966 of the Gujarat High
Court in Letters Patent Appeal No. 19 of S. T. Desai and I. N. Shroff, for the
appellant. The respondent did not appear.

1.The Judgment of the Court was delivered by Dua, J.-In this appeal on certificate
granted by the High Court of Gujarat under Article 133(1)(c) of the Constitution of
India the question raised relate to the liability of auction purchaser of property at
court sale for the arrears of municipal taxes due on the date of sale to the municipal
corporation of the City of Ahmedabad which dues are a statutory charge on the
property sold and of which the purchaser had no actual notice. On the question of
constructive notice there is a sharp conflict of judicial decisions in the various High
Courts and in the Allahabad High Court itself there have been conflicting
expression of opinion. In this Court there being no representation on behalf of the
respondent the appeal was heard ex parte.

2. The property which is the subject matter of controversy in this litigation

originally belonged to one Haji Nur-Mahammad Haji Abdulmian. He apparently
ran into financial difficulties in February, 1949, and insolvency proceedings were
started against him in March, 1949. By an interim order receivers took charge of
his estate and finally on October 14, 1950 he was adjudicated insolvent. The
property in question accordingly vested in the receivers. This property had been
mortgaged with a firm called Messrs. Hargovind Laxmichand. In execution of a
mortgage decree obtained by the mortgagee this property was auctioned and
purchased at court sale by the plaintiff Haji Abdulgafur Haji Hussenbhai,
(respondent in this Court) for Rs. 22,300. He was declared purchaser on November
28, 1954. At the time of this purchase there were municipal taxes in respect of this
property in arrear for the years 1949-50 to 1953-54, which means that the receivers
had not cared to pay the municipal taxes during all these years. The property was
attached by the municipal corporation by means of an attachment notice dated-
July 20, 1955 for the arrears of the municipal taxes amounting to Rs. 543.79 ps. As
the municipal corporation threatened to sell the property pursuant to the

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 attachment proceedings the purchaser instituted the suit (giving rise to this
appeal) for a declaration that he was the owner of the property and that the arrears
of municipal taxes due from Haji Nur mohammad Haji Abdulmian were not
recoverable by attachment of the suit property in the plaintiff's hands and that the
warrant of attachment of the property issued by the municipal corporation was
illegal and ultra vires. Permanent injuntion restraining the municipal corporation
from attaching the property for arrears of municipal taxes was also sought. The
trial court declined the prayer for a declaration that the property was not liable to
be attached for recovery of the arrears of municipal taxes. But the war-rant of
attachment actually issued in this case was held to be illegal and void with the
result that an injunction was issued restraining the municipal corporation from
enforcing the impugned warrant of attachment against the plaintiff in respect of
the suit property. Both parties feeling aggrieved appealed to the District Court.
The Assistant Judge who heard the appeals dismissed both of them. The plaintiff
thereupon presented a second appeal to the Gujarat High Court which was
summarily dismissed by a learned single Judge. Leave to appeal to a Division
Bench under cl. 15 of the Letters Patent was however granted. The Division Bench
hearing the Letters 5-1 S.C. India/71 Patent appeal in a fairly lengthy order allowed
the plaintiffs appeal and decreed his suit holding that the plaintiff is the owner of
the suit property and the charge of the municipal corporation for arrears of
municipal tax is not enforceable against his property and also restraining the
municipal corporation by a permanent injunction from proceeding to realise from
this property the charge in respect of the arrears of municipal taxes.

3. On appeal in this Court three main questions were raised by Shri S. T. Desai,
learned counsel for the appellant. To begin with it was contended that there is no
warranty of title in an auction sale. This general contention seems to us to be well-
founded because it is axiomatic that the purchaser at auction sale takes the
property subject to all the defects of title and the doctrine caveat emptor (let the
purchaser beware) applies to such purchaser. The case of the judgment debtor
having no saleable interest at all in the property sold such as is contemplated by 0.
21, R. 91, C. P. C. is, however, different and is not covered by this doctrine. The
second point canvassed was that there is an express provision in Section 141(1) of
the Bombay Provincial Municipal Corporation Act, 1949 (hereinafter called the

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 Bombay Municipal Act) for holding the present property to be liable for the
recovery of municipal taxes and, therefore though the property was subject only
to a charge not amounting to mortgage and, therefore, involving no transfer of
interest in the property, the same could nevertheless be sold for realizing the
amount charged, even in the hands of a transferee for consideration without
notice. Section 141 of the Bombay Municipal Act is an express saving provision as
contemplated by Section 100 of Transfer of Property Act, contended Shri Desai.
This submission has no merit as would be clear from a plain reading of Section 100
of the Transfer of Property Act, 1882 and Section 141 of the Bombay Municipal Act,
the only relevant statutory provisions. Section 100 of the Transfer of Property Act
dealing with 'charges' provides. S. 100 "Where immoveable property of one person
is by act of parties or operation of law made security for the payment of money to
another, and the transaction does not amount to a mortgage, the later person is
said to have a charge on the property; and all the provisions hereinbefore
contained which apply to a simple mortgage shall, so far as may be, apply to such
charge.

4. Nothing in this section applies to the charge of a, trustee on the trust-property

for expenses properly incurred in the execution of his trust, and; save as otherwise
expressly provided by any law for the time being in force, no charge shall be
enforced against any property in the hands of a person to whom such property
has been transferred for consideration and without notice of the charge."

5. This section in unambiguous language lays down that no charge is enforceable

against any property in the hands of a transferee for consideration without notice
of the charge except where it is otherwise expressly provided by any law for the
time being in force. The saving provision of law must expressly provide for
enforcement of a charge against the property in the hands of a transferee for value
without notice of the charge and not merely create a charge. We now turn to
Section 141 of the Bombay Provincial Municipal Corporation Act, 1949 to see if it
answers the requirements of Section 100 of Transfer of Property Act. This section
reads :- Section 141. "Property taxes to be a first charge on premises on which they
are assessed: (1) Property taxes due under this Act in respect of any building or
land shall, subject to the prior payment of the land revenue, if any, due to the State

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 Government thereupon, be a first charge, in the case of any building or land held
immediately from the Government, upon the interest in such building or land of
the person liable for such taxes and upon the movable property, if any, found
within or upon such building or land and belonging to such person ; and, in the
case of any other building or land, upon the said building or land and upon the
moveable property, if any, found within or upon such building or land and
belonging to the person liable for such taxes. Explanation.- The term "Property
taxes" in this section shall be seemed to include charges payable under section 134
for water supplied to any premises and the costs of recovery of property-taxes as
specified in the rules. (2) In any decree passed in a suit for the enforcement of the
charge created by sub-section (1), the Court may order the payment to the
Corporation of interest on the sum found to be due at such rate as the Court deems
reasonable from the date of the institution of the suit until realisation, and such
interest and the cost of enforcing the said charge, including the costs of the suit
and the cost of bringing the premises or moveable property in question to sale
under the decree, shall, subject as aforesaid, be a fresh charge on such premises
and moveable property along with the amount found to be due, and the Court
may direct payment thereof to be made to the Corporation out of the sale
proceeds."

6. Sub-section (1). as is obvious, merely creates a charge in express language. This

charge is subject to prior payment of land revenue due to the State Government
on such building or land. The section, apart from creating a statutory charge, does
not further provide that this charge is enforceable against the property charged in
the hands of a transferee for consideration without notice of the charge. It was
contended that the saving provision, as contemplated by Section 100 of the
Transfer of Property Act, may, without using express words, in effect provide that
the property is liable to sale in enforcement of the charge and that if this liability
is fixed by a provision expressly dealing with the subject, then the charge would
be enforceable against the property even in the hands of a transferee for
consideration without notice of the charge. According to the submission it is not
necessary for the saving provision to expressly provide for the enforceability, of
the charge against the property in the hands of a transferee for consideration
without notice of the charge. This submission is unacceptable because, as already

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 observed, what is enacted in the second half of Section 100 of Transfer of Property
Act is the general prohibition that no charge shall be enforced against any property
in the hands of a transferee for consideration without notice of the charge and the
exception to this general rule must be expressly provided by law. The real core of
the saving provision of law must be not mere enforceability of the charge against
the property charged but enforceability of the charge against the said property in
the hands of a transferee for consideration without notice of the charge. Section
141 of the Bombay Municipal Act is clearly not such a provision. The second
contention accordingly fails and is repelled. The third argument, and indeed this
was the principal argument which was vehemently pressed with considerable
force by Shri Desai. is that the plaintiff must be deemed to have constructive notice
of the arrears of municipal taxes and as an auction purchaser he must be held liable
to pay these taxes and the property purchased must also be held subject to this
liability in his hands. In support of this submission he cited some decisions of our
High Courts. The first decision relied upon by Shri Desai is reported as Arumilli
Suravya v. Pinisetti Venkataramanamma(1) in which relying on Creet v. Ganga
Ram Gool Rai (2) it was observed by Horwill J., that Section 100 of the Transfer of
Property Act does not apply to auction sales because the transfer within the
meaning of the Transfer of Property Act does not include an auction sale. It was
added that the position of a purchaser at an execution sale is the same as that of
the judgment-debtor and his position is somewhat different from that of a (1) A.I.R.
1940 Mad. 701. (2) I.L.R. [1937] 1 Cal. 203. purchaser at a private sale. According to
this decision, purchase the property subject to all the charges and encumbrances
legal and equitable which would bind the debtor$. We do not agree with the view
taken in this decision. We however, do not consider it necessary to go into the
matter at length because we find that this decision was expressly overruled by this
Court in Laxmi Devi v. Mukand Kunwar (1) and the High Court, relying on this
Court's decision, had also repelled a similar contention pressed on behalf of the
Municipal Corporation there. This Court pointed out in Laxmi Devi's case (2) that
the provi- sions of Section 2(d) of the Transfer of Property Act prevail over Section
5 with the result that the provisions of Section 57 and those contained in Chapter
IV of the Transfer of Property Act must apply to transfer, by operation of law.
Section 100, it may be pointed out, falls in Chapter IV. Reliance was next placed on
a Full Bench decision of the Allahabad High Court in Nawal Kishore v. The

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 Municipal Board, Agra (1). According to this, decision the question of constructive
notice is a question of fact which falls to be determined on the evidence and
circumstances of each case. But that Court felt that there was a principle on which
question of constructive notice could rest, that principle being that all intending
purchasers of the property in municipal areas where the property is subject to a
municipal tax which has been made a charge on the property by statute have a
constructive knowledge of the tax and of the possibility of some arrears being due
with the result that it becomes their duty before acquiring the property to make
enquiries as to the amount of tax which is due or which may be due and if they
fail to make this enquiry such failure amounts to a wilful abstention or gross
negligence within the meaning of Section 3 of the Transfer of Property Act and
notice must be imputed to them. The reference to the Full Bench in the reported
case was necessitated because of conflict of judicial opinion between that Court
and Oudh Chief Court. The earlier decision of a Division Bench in Municipal
Board, Cawnpore v. Roop Chand Jain (2) was overruled and the Bench decision of
Oudh High Court in Municipal Board, Lucknow v. Ramjilal (4) was approved. The
next decision to which reference was made by Shri Desai is reported as Akhoy
Kumar Banerjee v. Corporation of Calcutta (5). In this case, after distinguishing a
mortgage from a charge, it was observed-that the statutory charge in that case
could not be enforced against the property in the hands of bona fide purchaser for
value without notice. While dealing with the question whether the appellants in
that case were purchasers for value without notice, it was observed that they had
(1) [1965] 1 S.C.R. 726. not pleaded in their written statement that they were
Purchasers for value without notice. Having not pleaded this defence they were
held disentitled to avail of it. Having so observed the Court dealt with the case on
the assumption that the defence though not expressly taken in the pleadings was
available to the defendants. The Court said : "But even if we assume that the
defence, though not expressly taken in their written statement, is available to the
defendants, they are in a position of difficulty from which there is no escape. The
appellants are private purchasers of the property and if they had enquired at the
time of their purchase, they would have discovered that the rates were in arrears;
as a matter of fact, they would be personally liable under Section 223 for the arrears
of the year immediately prior to the date of their purchase, and they admit that

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 they have satisfied such arrears, though they do not disclose whether by enquiry
they had ascertained the existence of the arrears before they made the purchase.

7. The Court then proceeded to deal with the position of the vendor from whom
the appellants had purchased the property in order to see if he could raise the
defence of being a purchaser for value without notice. The appellant's vendor was
a mortgagee who had acquired title by foreclosure-an involuntary alienation by
his mortgagor-and it was held that to him constructive notice could not be imputed
to the same extent as to a purchaser at a private sale. But had he made enquiries
from the municipal authorities he could still have ascertained whether any arrears
of consolidated rates were due. When he had taken the mortgage, be was aware
that if the rates were not paid the arrears would be fiat charge on the property with
the result that before becoming full owner by foreclosure he should have
ascertained the true state of affairs. On this reasoning he was held to have
constructive notice and the purchasers from him could not claim greater
protection. These circumstances clearly disclose that the reported case is not
similar to the one before us and is of little assistance.

8. Chandu Ram v. Municipal Commissioner of Kurseong Municipality A.I.R. 1951

Cal. 398 was the next decision cited. The Bench in that case followed the Full Bench
decision of the Allahabad High Court in Nawal Kishores case (supra). A Division
Bench of the Oudh Chief Court in Municipal Board, Lucknow v. Lala Ramji Lal
A.I.R. 1941 Oudh 305 disagreeing with the Bench decision of the Allahabad High
Court in Roop Chand Jain's case (supra) observed that it must be presumed that a
person who buys house property situate in a municipality is acquainted with the
law by which a charge is imposed on that property for the payment of taxes. The
charge having been expressly imposed by the Municipal Act upon the property
for payment of municipal taxes the municipality was entitled to follow the
property in the hands of a transferee who had not cared to make any enquiry as to
whether the payment of taxes was in arrears. The Court approved the Calcutta
decision in Akhoy Kumar's case (supra). The next decision cited is reported as
Laxman Venkatesh Naik v. The Secretary of State for India (1) but being a case of
takkavi loans it is of no assistance in the present case. We may now turn to the
Bench decision of the Allahabad High Court in Roop Chand Jain's case (supra).
The reasoning for the view adopted there may be reproduced: "A bona fide

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 purchaser takes property he buys free of all charges of which he has no notice
actual or constructive. He is said to have constructive notice when ordinary
prudence and care would have impelled him to undertake an enquiry which
would have disclosed the charge. If for instance the charge is created by a
registered document then the purchaser would be held to have constructive notice
of that charge inasmuch as a prudent purchaser would in ordinary course search
the registers before effecting the purchase. There is no register, as far as we know,
of arrears of taxes or of charges in respect thereof. It has not been shown that the
municipality of Cawnpore intimate to the public in the "Press" or by other
publication a list of the properties which are charged in respect of arrears of taxes.
There is nothing upon the record to justify the conclusion that the defendants
could have demanded any information from-the municipality in regard to charges
on immovable property within the municipal limits."

9.The Court then noticed the fact that the Kanpur Corporation had allowed II
years' arrears of taxes to accumulate and it was observed that no intending
purchaser was bound to presume that taxes upon the property, he contemplates
purchasing had not been paid in the ordinary course, in the absence of special
intimation by the municipality. On this reasoning the suggestion of constructive
notice was negatived.

10. According to Section 3 of the Transfer of Property Act which is described as

interpretation clause, a person is said to have notice of a fact when he actually
knows that fact or when before willful abstention from an enquiry or search which
he ought to have made or gross negligence he would have known it. There (1) XLI
B.I.R. 257.are three explanations to this definition dealing with three contingencies
when a person acquiring immovable property is to be deemed to have notice of
certain facts. Those explanations are: "Explanation I.-Where any transaction
relating to immoveable property is required by law to be and has been affected by
a registered instrument, any person acquiring such property or any part of. or
share of such instrument as from the date of registration or, where the property is
not all situated in one sub- district, or where the registered instrument has been
registered under subsection (2) of Section 30 of the Indian Registration Act, 1908,
from the earliest date on which any memorandum of such registered instrument
has been filed by any Sub-Registrar within whose sub-district any part of the

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 property which is being acquired, or of the property wherein a share or interest is
being acquired, is situated Provided that- (1) the instrument has been registered
and its registration completed in the manner prescribed by the Indian Registration
Act, 1908, and the rules made thereunder. (2) the instrument or memorandum has
been duly entered or filed, as the case may be, in books kept under section 51 of
that Act and (3) the particulars regarding the transaction to which the instrument
relates have been correctly entered in the indexes kept under section 55 of that Act.
Explanation II.-Any person acquiring any immoveable property or any share or
interest in any such property shall be deemed to have notice of the title, if any, of
any person who is for the time being in actual possession thereof. Explanation III.-
A person shall be deemed to have had notice of any fact if his agent acquires notice
thereof whilst acting on his behalf in the course of business to which that fact is
material. Provided that, if the agent fraudulently conceals the fact, the principal
shall not be charged with notice thereof as against any person who was a party to
or otherwise cognizant of the fraud." Now the circumstances which by a deeming
fiction impute notice to a party are based, on his willful abstention to enquire or
search, which a person ought to make or, on his gross negligence. This
presumption of notice is commonly known as constructive notice.

11. Though originating in equity, this presumption of notice is now; a part of our
statute and we have to interpret it as such. Willful abstention suggests conscious
or deliberate abstention and gross negligence is indicative of a higher degree of
neglect. Negligence is ordinarily understood as an omission to take such
reasonable care as under the circumstances is the duty of a person of ordinary
prudence to take. In other words it is an omission to do something which a
reasonable man guided by consideration which normally regulate the conduct of
human affairs would do or doing something which a normally prudent and
reasonable man would not do. The question of wilful abstention or gross
negligence and, therefore, of constructive notice considered from this point of view
is generally a question of fact or at best mixed question of fact and law depending
primarily on the facts and circumstances of each case and except for cases directly
falling within the three explanations, no inflexible rule can be laid down to serve
as a straight- jacket covering all possible contingencies. The question one has to
answer in circumstances like the present is not whether the purchaser had the
means of obtaining and might with prudent caution have obtained knowledge of

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 the charge but whether in not doing so he acted with wilful abstention or gross
negligence. Being a question depending on the behaviour of a reasonably prudent
man, the Courts have to consider it in the background of Indian conditions. Courts
in India should, therefore, be careful and cautious in seeking assistance from
English precedents which should not be blindly or too readily followed.

12. Adverting now to the case before us, as already noticed. the property in
question had vested in the receivers in insolvency proceedings since March, 1949
by an interim order, and in October, 1950 the original owner was adjudicated as
an insolvent and the property finally vested in the receivers in insolvency. The
plaintiff purchased the property in November, 1954 and in our opinion, it could
not have reasonably been expected by him that the receivers would not have paid
to the municipal corporation since 1949 the taxes and other dues which were
charged on this property by statute. According to Section 61 of the Provincial
Insolvency Act, 1920 the debts due to a local authority are given priority, being
bracketed along with the debts due to the State. Merely because these taxes are
charged on the property could not constitute a valid ground for the official receiver
not to discharge this liability. In fact we find from the record that on January 15,
1951 the receivers had submitted a report to the insolvency court about their
having received bills for Rs. 6283-0 in respect of municipal taxes of the insolvent's
property and leave of the court was sought for transferring the said property to
the names of the receivers in the municipal and Government records. The court
recorded an order on February 8, 1951 that the municipal taxes had to be paid. On
the receivers stating that they did not possess sufficient funds the court gave notice
to the, counsel for the opposite party and on February 24, 1951 made the following
order: "Mr. Pandya absent. The taxes have to be paid. The Receivers state that they
can pay only by sale of some properties of the insolvent from which they want
sanctioned. The property in which the insolvent stays should first be disposed of.
The terms arc accordingly so authorised."

13. It is not known what happened thereafter. It is, however, difficult to appreciate
why after having secured the necessary order from the court municipal taxes were
not paid off by the receivers and why the municipal corporation did not pursue
the matter and secure payment of the taxes due. May be that the municipal
corporation thought that since these dues were a charge on the property they need

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 not pursue the matter with the receivers and also need not approach the insolvency
court. If so, then this, in our opinion, was not a proper attitude to adopt. In any
event the plaintiff could not reasonably have thought that the municipal
corporation had not cared to secure payment of the taxes due since 1949. On the
facts and circumstances of this case, therefore, we cannot hold that the plaintiff as
a prudent and reasonable man was bound to enquire from the municipal
corporation about the existence of any arrears of taxes due from the receivers. It
appears from the record, however, that he did in fact make enquiries from the
receivers but they did not give any intimation. The plaintiff made a statement on
oath that when he purchased the building in question it was occupied by the
tenants and the rent used to be recovered by the receivers. There is no rebuttal to
this evidence. Now, if the receivers were receiving rent from the tenants, the
reasonable assumption would be that the municipal taxes which were a charge on
the property and which were also given priority under Section 61 of the Provincial
Insolvency Act, 1920, had been duly paid by the receivers out of the rental income.
The plaintiff could have no reasonable ground for assuming that they were in
arrears. From the plaintiff's testimony it is clear that he did nevertheless make
enquiries from the receivers if there were any dues against the property though
the enquiry was not made specifically about municipal dues. Apparently, he was
not informed about the arrears of municipal taxes. This seems to us explainable on
the ground that the receivers had, after securing appropriate orders, for some
reasons not clear on the record, omitted to pay the arrears of municipal taxes and
they were, therefore, reluctant to disclose this lapse on their part. On these facts
and circumstances, we do not think that the plaintiff could reasonably be fixed
with any constructive notice of the arrears of municipal taxes since 1949. So far as
the legal position is concerned, we are inclined to agree with the reasoning
adopted by the Allahabad High Court in Roop Chand Jain's case (supra) in
preference to the reasoning of the Full Bench of that Court in Nawal Kishore's case
(supra) or of the Division Bench of Oudh Chief Court in Ramji Lal's case (supra).
We do not think there is any principle or firm rule of law as suggested in Nawal
Kishore's case (supra) imputing to all intending purchasers of property in
municipal area where municipal taxes are a charge on the property, constructive
knowledge of the existence of such municipal taxes and of the reasonable
possibility of those taxes being in affears. The question of constructive knowledge

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 or notice has to be determined on the facts and circumstances of each case.
According to the Full Bench decision in Nawal Kishore's case (supra) also the
question of constructive notice is a question of fact and we do not find that the
material on the present record justifies that the plaintiff should be fixed, with any
constructive notice of the arrears of municipal taxes.

14. We may add before concluding that as the question of constructive notice has
to be approached from equitable considerations, we feel that the municipal
corporation in the present case was far more negligent and blameworthy than the
plaintiff. We have, therefore, no hesitation in holding that the High Court took the
correct view of the legal position with the result that this appeal must fail and is
dismissed. As there is no representation on behalf of the respondent there will be
no order as to costs. Appeal dismissed.

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 Md. Mustafa v Haji Md. Isa And Ors.
AIR 1987 Pat 5

JUDGMENT Ramnandan Prasad, J. 1. This appeal by the plaintiff is directed

against the judgment and the decree dismissing his suit for specific performance
of contract with regard to the sale of a house said to have been entered into by the
original defendant 1 Haji Md. Isa and the plaintiff.

2. The case of the plaintiff is that he was a tenant in one of the Katras of a Pucca
house, which stood over four decimals of land appertaining to plot Nos. 2230 and
2231 under Khata No. 721 in village Alamgirpur Phulwarisharif, a suburb of town
of Patna, which belonged to original defendant 1 Md. Isa, who was his uncle. In
the month of April, 1972 Haji Md. Isa expressed his desire to plaintiff Md. Mustafa
to sell the house, as he was in need of some money, and eventually, after some
negotiation, Md. Isa agreed to sell the house to the plaintiff for a sum of Rs. 20,000/-
. As the plaintiff had not got so much fund with him at that time for getting the
sale deed executed, he wanted some time and Md. Haji Md. Isa agreed to grant
him some time. It is said that on 14th June, 1972 Md. Isa told the plaintiff that he
urgently required Rs. 7,000/- and so he should advance the amount to him and get
a deed of agreement to sell executed by him. The plaintiff agreed. On the following
day i.e. on 15-6-1972 the plaintiff advanced Rs. 7,000/ towards the aforesaid
consideration money of Rs. 20,000/- to Haji Md. Isa, who, in turn, executed an
agreement to sell on a stamped paper and delivered the same to the plaintiff.
According to this agreement Md. Isa agreed to execute a registered sale deed in
respect of the said house in favour of the plaintiff on payment of the balance of the
consideration money by the last week of January, 1973, but he put the plaintiff in
possession of the entire building at that very time in part performance of the
contract. The case of the plaintiff is that he managed the balance of the
consideration money and he asked Md. Isa to execute the sale deed, but he did not
do, and hence the plaintiff sent a registered notice through his pleader on 7-10-
1972 which was refused. In the meantime, the plaintiff learnt that the father of the
minor defendants 6 and 7, namely, Arif Hussain, brought a collusive sale deed dt.
20-7-1972 into existence in the name of these defendants said to have been

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 executed by Md. Isa. It is said that this sale deed is a fraudulent document and was
brought into existence in spite of the aforesaid agreement executed by Md. Isa in
favour of the plaintiff. It has also been alleged that this sale deed can have no legal
effect, as it was executed without consideration and with full knowledge of the
said agreement in favour of the plaintiff.

3. Original defendant 1 Haji Md. Isa had filed written statement denying the
allegations of the plaintiff but he died during the pendency of the suit on 20-6-1974
and his heirs, namely, respondents l(a) and l(b), who were substituted in his place
adopted the written statement filed by him. Defendants 2 and 3 have filed a joint
written statement. The case, however, put forward in the two sets of written
statement is substantially the same. The case of the defendants is that Md. Isa was
in need of money and so he wanted to sell the house. It has also been admitted by
Md. Isa that the plaintiff also wanted to purchase the house, but the price offered
by him was too low and hence he had rejected his offer. He has denied to have
agreed to sell the house to the plaintiff for a sum of Rs. 20,000/- or to have executed
an agreement in his favour in this connection. According to these defendants the
agreement said to have been-executed by Md. Isa and filed by the plaintiff is a
forged, fabricated and antedated document. Their further case is that Md. Isa had
agreed to sell the house to defendants 2 and 3 for a sum of Rs. 24,000/- and he
actually executed a registered sale deed in their favour on 20-7-1972 after receiving
the full consideration money of Rs. 24,000/- from them. According to them, this
sale deed is a genuine document and was executed for consideration and Md. Isa
had also put defendants 2 and 3 in possession of the house after sale and they are
coming in possession thereof. Further case of the defendants 2 and 3 is that they
are bona fide purchasers for value without any notice of the alleged agreement.

4. The learned Subordinate Judge, who tried the suit dismissed the suit on the
following findings : -- (1) The agreement in question (Ext. 1)was not executed by
Haji Md. Isa and was not a genuine document. (2) The sale deed (Ext. A/1) was
duly executed by Md. Isa on receiving full consideration and was a valid and
genuine document. (3) Defendants 2 and 3 were bona fide purchasers for value
without notice of the said agreement.

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 5. The learned counsel appearing for the appellant has challenged the aforesaid
findings arrived at by the learned Subordinate Judge and so the following points
arise for determination in this appeal : -- (I) Whether the agreement (Ext. 1) is a
valid and genuine document? (II) Whether defendants 2 and 3 are bona fide
purchasers for value without notice of the Baibiyana aforesaid?

6. The witnesses who deposed on this point on behalf of the plaintiff are Md. Idris
(P.W. 4), Abdul Razak (P.W. 5), besides plaintiff Md. Mustafa himself (P.W. 2).
Naturally P.W. 2 is the most important witness amongst these three, the other two
being only attesting witnesses to the deed.

7. As many as five persons figure as attesting witnesses on the Beyananama (Ext.

1) including P.Ws. 4 and 5. The other three, namely, Md. Kamruddin, Md. Abdul
Gani and Md. Yaqub are dead according to the plaintiff, and as such they could
not be examined. The scribe of the deed, namely, Bakruddin, has not been
examined by the plaintiff, although his evidence would have been of considerable
importance in the case. An explanation was offered for his non-examination in a
petition filed on 2-7-1977 that he had been gained over by the defendants, but the
latter had controverted this allegation by filing a rejoinder. Whatever be the real
position the fact remains that the scribe has not come forward to support the case
of the plaintiff regarding the genuineness of the Beyananama. 7A. P.W. 4 and 5
have of course, stated that the Beyananama was executed by Md. Isa in their
presence, but, on a close scrutiny, their evidence does not inspire confidence.

8. According to the plaintiff and P.Ws. 4 and 5 this Beyananama was scribed in the
hotel of the plaintiff located in the house in suit which itself lies on Fulwari
Chouraha at about 10 a.m. on 15 6-1972. It is really surprising as to why this
Beyananama was scribed, executed and attested at a hotel, which is a public place.
As admitted by P.W. 5, this hotel is on the Chouraha where large numbers of
people move about. Then, according to this very witness as many as 15 to 20
persons were sitting in the hotel when the Beyananama was scribed and
consideration money of Rs. 7,000/- was paid to Md. Isa. It is really surprising how
Md. Isa selected this hotel for getting the Beyananama scribed and executed.
Indeed, it does not appear quite natural that he would have selected this hotel for

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 receiving amount of Rs. 7,000/- in cash in presence of so many outsiders, some of
whom must be strangers. According to the evidence he had taken the said amount
after counting the same in presence of everybody. This circumstance assumes
importance, as the residential house of Md. Isa was just by the side of this building
where he had his own Baithak for males where he usually sits. It is also strange
that Md. Isa did not call either of his sons or any of his relations and all alone went
to the hotel on his own without being called by the plaintiff there. It is also not
easily believable that Md. Isa had called Bakruzama, an advocate's clerk, for
scribing the Beyananama, when he himself had not taken any such work from him
in the past. According to the admitted position, Bakruzama is a resident of
Rajendra Nagar and Beyananama was being executed at Phulwarisharif, which is
far away from there. Indeed, according to the evidence of the plaintiff himself, it is
he who had taken this scribe to his own hotel for scribing the deed and even then
he has not dared to examine him on his behalf.

9. Indeed, the presence of P.W. 4 at the relevant time in the hotel of the plaintiff
appears to be a peculiar coincidence. Admittedly, he is a resident of Ramnabag,
which is at a considerable distance from Phulwarisharif, and has got absolutely no
concern with that place. He had also got no concern either with the plaintiff or Md.
Isa. Of course, he claims to have gone to the bookbinding shop of Md. Isa at
Ramnabag on a few occasions, but on his own showing that shop is not there after
1962 and he had no occasion to meet Md. Isa thereafter until that fateful day. At
one place he had stated that he had gone there as he had been called by Md. Isa,
but he had not stated as to the person who had gone to call him and why he would
come to the hotel of the plaintiff on being called by Md. Isa, when he had no
occasion to meet Md. Isa after 1962. It is hardly believable that he would have been
called by Md. Isa from Ramnabag to the hotel of the plaintiff for simply attesting
Beyananama, when a lot of persons were available for that purpose at
Phulwarisharif itself. In fact his evidence is far from satisfactory and it was
suggested to him that he is a servant of Majo Babu who had set up the plaintiff to
lay a claim on the house in question.

10. P.W. 5, Abdul Razzak, also does not appear to be a dependable witness. It was
suggested to him that he was working as a tailor in the house of the plaintiff which

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 fact he denied and asserted that he worked as a tailor in the shop of Md. Halim at
Khagaul. But, he has been contradicted by the plaintiff himself, according to
whom, this witness worked as a tailor in the shop of one Rauf at Phulwarisharif
itself. In any event, this witness (P.W. 5) had admitted that he used to go to work
at Khagaul daily in the morning and return home only at 11 p.m. and this he had
been doing during the last 15 years. If it was so, it is strange as to how he was
present in the hotel at 10a.m. on 15-6-1972. He has said that he had gone to the
shop of the plaintiff for taking tea, but in ordinary course he would have gone to
take tea before 9 a.m. which was his time for going to his own tailoring shop at
Khagaul. It is really strange that Md. Isa would have asked him to sit in that hotel
without any reason at the cost of his work. It would also be significant to point out
that he claims to have signed in Deonagri script on the Beyananama, but he has
put his left thumb impression on his deposition which is indicative of the fact that
he is an illiterate.

11. The plaintiff (P.W. 2) has not fared better. He has stated that Md. Isa had told
him in April 1972 that he wanted to sell the disputed house and that the terms of
the sale were settled between the two only within two days from the start of the
negotiation. Nobody else was present during these talks. He has, however, not
explained as to why no Beyananama or sale deed was executed at that time. He
has also not stated as to when the sate deed was to be executed. In fact, he could
not say in which pan of April this talk had taken place. Then, he has staled that all
on a sudden Md. Isa told him for the first time on 1-4-6-1972 that he wanted money
and accordingly Beyananama was scribed and executed on the following day i.e.
on 15-4-1972. None else was present at this talk also. Indeed it is not clear from the
evidence of the plaintiff as to what was the necessity which compelled Md. Isa to
executed the Beyananama in question all on a sudden on 15-6-1972. The
Beyananama recites about some necessities but there is no evidence to show that
in fact those necessities existed. It is also strange that according to the plaintiff
himself the first talk regarding advance of money and execution of Beyananama
took place on 14-6-1972, but Md. Isa is said to have purchased the stamp papers
for Beyananama on 10-6-1972 i.e. four days before the negotiation and the talk in
this regard had started although both the parties are close relations and also close
neighbours.

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 12. Then, there is no evidence worth the name to show that the plaintiff came in
actual or even constructive possession of the entire building after the execution of
the said Beyananama, as stated therein and as claimed by the plaintiff. Admittedly,
the plaintiff was occupying only one of the Katras of the building as tenant since
the time of his father in which he was holding his hotel. There is nothing on the
record to show that he really came in possession of the entire building after the
execution of the Beyananama. It is the admitted position that there were six other
tenants like the plaintiff in that building, besides the plaintiff. There is nothing to
show that the plaintiff ever realised rent from any of them. Of course, he has stated
that he had realised rent from one of the tenants and that also only once, but this
statement is apparently false, as he could not name the tenant from whom he had
realised the rent. In fact, he did not give out the names of the other tenants who
were in possession of the different portions of that building. This cannot be the
natural conduct of a person, who claims to have come in actual possession of the
entire building. On the other hand two of the tenants namely, Dr. Suleman Gosh
Khan (D.W. 3) and Md. Nazir Alam (D.W. 4) have come to the witness-box to
support the case of the defendants 2 and 3. Their evidence is that previously they
used to pay rent to Md. Isa, but after the latter executed the sale deed in favour of
defendants 2 and 3, he asked them to pay rent to these defendants and both of
them, accordingly, paid rent thereafter to the father of these defendants, namely,
Arif Hussain (D. W. 9). There appears absolutely no reason to reject the evidence
of these witnesses and, in fact, the evidence of D.W. 3, who is a medical practitioner
deserves due consideration. Then, the evidence of D.W. 9 shows that one of the
Katras of the disputed building was vacant at the time of the sale and Md. Isa put
him in direct possession of that Katra after the sale. He has also been supported by
Jafar Imam alias Samiullah (D.W. 2), who is one of the sons of late Md. Isa, who
died on 20-6-1974. Then the names of defendants 2 and 3 were also mutated in the
Circle Office and rent receipts were granted in their names. I find on the other
hand, there is nothing to show that the plaintiff had ever taken steps for getting
his name mutated anywhere. In such circumstances, it is not possible to accept the
case of the plaintiff that Md. Isa had put him in possession of the entire building
and that he had come in possession thereof on the basis of his Beyananama.

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 13. The conduct of the plaintiff otherwise also does not appear to be that of a
normal and prudent holder of a Baibeyana deed. He has admitted in para 25 of his
deposition that he came to know about the sale deed executed in favour of
defendants 2 and 3 only a week after its execution, but, curiously enough, he did
not enquire from Md. Isa as to why he had done so. He even did not go to
defendants 2 and 3 or their father and in fact he never informed them about his
own Beyananama. Normaliy, he was expected to rebuke Md. Isa for executing the
sale deed after executing a Beyananama in his favour but, evidently, he kept mum
over the matter. According to his own evidence he went to Md. Isa only in October,
1972, although the sale deed was executed on 20-7-1972, and simply asked him to
execute the sale deed. Even at that time he did not question him as to why he had
executed the sale deed in favour of defendants 2 and 3. It is really difficult to
believe that he simply told Md. Isa to execute the sale deed in his favour in
October, 1972 long after he came to know about the sale deed in favour of
defendants 2 and 3. Not only that, there is absolutely no mention about the sale
deed (Ext. B/1) in the notice (Ext. 4) said to have been sent by his advocate to Md.
Isa on 7-10-1972. In fact, this notice was quite premature, as even according to the
Beyananama of the plaintiff, Md. Isa was to execute the sale deed till the end of
January, 1973 and so there was no occasion for giving this notice to him on 7-10-
72. Normally such a notice is given only when the executant of the Beyananama
fails to execute the sale deed within the time specified in the Beyananama, but here
the position is different. Then, the reason given by the plaintiff for not getting the
Beyananama registered is also not convincing, when he had paid Rs. 7,000/- in
cash. The explanation that he did not get the deed registered, as this was a
transaction between uncle and nephew is hardly convincing when the relationship
between the two was not at all quite cordial, as according to his own evidence he
was not on visiting terms with Md. Isa.

14. Thus, on a consideration of all aspects of the matter, I find it difficult to place
any reliance on the evidence of the plaintiff or his two witnesses (P.Ws. 4 and 5)
regarding execution of the Beyananama.

15. In fact the genuineness of the Beyananama is rendered doubtful by the

endorsement on the back of its first page and the evidence of the Stamp Vendor,

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 namely, Ram Udar Prasad (D.W. 12). This endorsement shows its serial No. as
7673 and the date of sale as 10-6-72. According to the Stamp Vendor and his
Register, the stamp bearing serial No. 7673 was sold on 29-11-72 and not on 10-6-
72, and the stamp which is said to have been sold to Md. Isa on 10-6-72 (Ext. 9)
bears serial No. 2365. This stamp, according to the Register, is for Rs. 2/-. According
to the plaintiff, the serial number on the back of the first page of Beyananama was
2365 which was interpolated to make it 7673, whereas, according to the
defendants, the serial number is correct, but the date has been interpolated as
showing 10-6-1972. This endorsement was not sent for examination to any expert
and it is very difficult to agree with the plaintiff that 7673 has been interpolated, as
no sign of interpolation appears to the naked eye. If the serial number was really
7673, this could not be sold to Md. Isa on 10-6-1972. Of course, there is some cutting
regarding the amount of the stamp sold under serial No. 2365 dt. 10-6-1972, but it
is difficult to reject the explanation given by this Stamp Vendor in this regard. It is
true that Md. Isa has not explained as to why he had purchased the stamp worth
Rs. 2/- on 10-6-1972, but, the simple reply of the learned counsel for the defendants
in this regard is that he had no occasion to do so, as there was no statement in this
regard in the plaint and Md. Isa himself died before the evidence was recorded.
No doubt P.W. 6, who is an advocate's clerk, has tried to support the case of the
plaintiff by stating that the serial number of the stamp as mentioned on the back
of the first page of the Beyananama was 2365 which has been interpolated to make
it 7673. He has stated that he had prepared a note of this Beyananama at the time
of filing it in Court, which note he had produced in Court when he was recalled
for further examination and has been marked as Ext. 10. This note is evidently not
a true copy of the Beyananama and it is difficult to hold that this note is a genuine
document. It has not been explained as to why this witness had made a note of the
serial number on the back of the first page of the stamp, as it was not the main part
of the Beyananama. It is obvious that he has brought this note in existence at a
much later stage only to support the case of the plaintiff and his evidence has been
rightly rejected by the learned Subordinate Judge.

16. As stated above, it is very difficult to connect the stamp said to have been
purchased by Md. Isa on 10-6-1972 with the Beyananama in question as the very
talk of the execution of the Beyananama with the plaintiff had taken place for the

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 first on 14-6-1972, and it is not easily acceptable that Md. Isa would have purchased
the stamp for this Beyananama on 10-6-72, when there was no talk about the
execution of any Beyananama.

17. Apart from the above discrepancy regarding the serial number of the stamp,
the genuineness of the Beyananama is rendered doubtful by the manner in which
scribe has put his signature thereon. Although the scribe is said to have signed the
document soon after scribing it, but the ink by which he put signature is quite
different from the body portion of the document. Indeed, the body portion is also
not consistenly written in one ink. The first page of the deed is in deep ink whereas
the other three pages are in much fainter ink. The signature of the scribe is
probably in the ink in which the top portion of the first page of the deed was
written. Then, the signatures of the attesting witnesses are in different inks. As
stated above, Abdul Razzak has signed in Deonagri script in his own pen, but from
his deposition it appears that he has put his left thumb impression thereon which
would indicate that he is an illiterate. Then, the ink in which he has put his
signature is quite different from the ink used by other attesting witnesses.

18. Indeed, then the evidence of the expert examined by the plaintiff, namely, S.M.
Anis Ahmad (P. W. 8), who has come to prove that the signatures appearing on
the Beyanama tally with the admitted signatures of Md. Isa on different
documents, is not quite convincing. Apart from the fact that he is only a
matriculate and does not appear to have received any training in the art of
handwriting at any recognised institution, the reasons given by him for his opinion
are also not convincing. At any rate, the learned Subordinate Judge was quite
justified in not acting on the basis of his evidence in face of the evidence of the
expert (D.W. 10) examined on behalf of the defendants. This D. W. 10 appears to
be a well-trained man in the science of handwriting, as he had taken training at
the Forensic Science and Technology at Calcutta for two years and thereafter he
had taken a practical training of the science in the United Kingdom. He is also a
Fellow Member of Royal Microscopical Society, London. He has also given good
reasons for coming to the conclusion that the signatures appearing on the
Beyananama did not tally with the admitted signatures of Md. Isa on various
documents. The reasons given by him are much more convincing and I have also

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 compared the disputed signatures of Md. Isa on the Beyananama with those on
the admitted documents with my naked eyes, of course, with the help of
magnifying glass, and found myself in agreement with the opinion of D.W. 10.

19. Thus, I find that the plaintiff has failed to prove that the disputed signatures of
Md. Isa appearing on the Beyananama were actually his signatures. Then the facts
and circumstances discussed above also render the genuineness of this
Beyananama very doubtful and it is not possible to act on it. Point No. II

20. The sale deed (Ext. A/1) said to have been executed by Md. Isa in favour of
defendants 2 and 3 has been marked without any objection on behalf of the
plaintiff. Indeed, its due execution has been proved by the son of Md. Isa (D.W. 2)
and D.W. 9. This Md. Isa, who died before the evidence was taken up has also
admitted about its execution and passing of consideration in his written statement
filed in the suit. There is nothing in the evidence adduced on behalf of the plaintiff
to show that the sale deed was without any consideration and even the plaintiff
(P.W. 2) has not stated that this sale deed was executed without any consideration.
When the executant admits about the execution and passing of the consideration,
it is really very difficult to accept the case of a stranger to the document, to wit the
plaintiff, that this document was not executed for consideration. In such
circumstances, there appears no difficulty in holding that this sale deed was duly
executed by Md. Isa after receiving consideration money, as mentioned
thereunder.

21. Now comes the question as to whether defendants 2 and 3 are bona fide
purchasers without notice of the said Beyananama.
22. It has been submitted that if the building was not in actual possession of the
vendor and a portion of it was admittedly in possession of the plaintiff, it was the
duty of the purchasers to make enquiries from the persons in possession including
the plaintiff and that the purchasers are bound by all the equities which the party
in possession may have been in the property if they failed to make any enquiry
from them. It was further submitted that the possession of the plaintiff over a
portion of the building in question would be sufficient notice to the purchasers of
all the equitable interests including the interest arising out of a collateral

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 agreement. It was pointed out that in the present case it is the admitted position
that the father of the minor purchasers did not make any enquiry and so he shall
be deemed to have purchased the building subject to the equities which the
plaintiff possessed in the property on the basis of his Beyananama and in any event
he cannot be called a bona fide purchaser without notice. In support of this
submission reliance was placed on the decisions in the case of Balchand Mahton
v. Bulaki Singh, AIR 1929 Pat 284, Ramkrishna Singh v. Mahadei Haluai, ILR 1965
Pat 596 : (AIR 1965 Pat 467), and Basruddin Khan v. Gurudarshan Das, AIR 1970
Pat 304 in which the principle of constructive notice has been applied for giving
relief to the plaintiff. The principle of constructive notice is incorporated in Illus.
II of Section 3 of the T.P. Act which reads as follows: "Any person acquiring any
immovable property or any share or interest in any such property shall be deemed
to have notice of the title, if any, of any person who is for the time being in actual
possession thereof."

23. These three decisions, which are of Division Bench, no doubt, support the
broad contention of the appellant, but the facts and circumstances of those cases
are quite different from the facts and circumstances of the present case. In all those
cases the plaintiff was in exclusive occupation of the land or building involved. In
the present case the position is that there were and are six more tenants in the
house besides the plaintiff and presumably they are in occupation of identical
areas, as there is no evidence to indicate that the plaintiff was in occupation of a
larger area than the other tenants. Indeed both the plaintiff and D. W. 3 were
paying the same rent of Rs. 10/- per month. In such circumstances, it may well be
said that the plaintiff was in occupation of l/7th portion of the building which can
be conveniently described as an insignificant portion of the building.

24. All these decisions are based primarily on the doctrine laid down in the case of
Daniels v. Davison, (1809) 16 Ves 249. The limits up to which this doctrine can be
extended has been explained in a Full Bench decision of this Court in Hari Charan
Kuar v. Kaula Rai, (1917) 2 Pat U 513 : (AIR 1917 Pat 478) in which the following
observation has been made : "..........There appears to be no case in the books in
which the Courts have been asked to apply the doctrine of Daniels v. Davison,
(1809-16 Ves 249) to a case like the one before us in which the person who had the

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 contract to purchase in his pocket was in possession not of the entire property sold
to another but only of a small portion of that property." The Full Bench did not
apply the doctrine laid down in the case of Daniels v. Davison English decisions
on the basis of which the aforesaid three decisions have been given, as the plaintiff
was in occupation of only a small portion of the property. In the case before the
Full Bench the land sold to purchasers was 9 bighas 10 kathas, whereas the plaintiff
was in possession of only 3 bighas 15 kathas out of that land. This would mean
that the Full Bench did not apply the principle of those cases even when the
plaintiff was in possession of a little over 1/3rd area of the land sold. If that
principle could not be applied in a case where the plaintiff was in possession of
more than l/3rd of the property sold, it obviously cannot be applied in the present
case where the plaintiff was in possession of only l/7th of the property sold.

25. This view has been followed by a Division Bench of this Court in the case of
Kesharmull Agarwala v. Rajendra Prasad, 1968 BLJR 28. In this case it was
observed as follows: "......Here, on the admission of the plaintiff himself, there were
three persons in occupation of the disputed house. The plaintiff was occupying the
shop portion at a monthly rental of Rs. 15/-. The inner portion of the house and the
rooms were in occupation of the owner, namely, defendant 1, his mother and
grandmother. Another portion of the house was also at that time in the occupation
of a doctor named Anand Karu Sarkar. Under such circumstances the purchaser
was not bound to make enquiry from every tenant in occupation of a portion of
the house, especially when the owner himself was occupying a portion and
enquiry had been made from him." The legal position regarding burden of proof
was also explained by the Division Bench and it was stated as follows: -- "......It is
doubtless well settled that to defeat a suit for specific performance of contract the
burden initially lies on the subsequent purchaser to prove want of notice. But, as
pointed out in Ramchander Singh v. Bibi Asghari Begam and another this burden
is somewhat light, and even a mere denial may suffice. Moreover, when both
parties have given evidence, the question is ultimately one of appreciating the
evidence, and any discussion about burden of proof becomes somewhat
academic." This very principle has been followed by a learned single Judge of this
Court in Rameshwar Singh v. Hari Narayan Singh, AIR 1984 Pat 277 where
Ashwani Kumar Sinha, J. has summarised the law in this regard by stating as

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 follows : -- "It is thus apparent that the contesting defendant pleaded want of
knowledge of the plaintiff's prior contract. Thus though the settled law is that the
onus was upon the contesting defendant to prove that he was a bona fide
purchaser for value without notice of the prior contract yet in view of the denial
regarding want of knowledge of the plaintiffs prior contract by the defendants, the
onus shifted on the plaintiff. In this view of law the two Courts below, in my
opinion, very correctly threw the onus upon the plaintiff to prove the knowledge
of prior contract on the contesting defendant."

26. Thus, the principle, which emerges from these decisions is that the principle of
constructive notice, as incorporated in Illus. II of Section 3 of the T.P. Act and the
doctrine as laid down in Daniels v. Davison, (1809-16 Ves249) (supra) cannot be
extended to a case in which the person basing his claim on the basis of a prior
agreement is in possession of only a small fraction of the property which has been
purchased by the purchasers and in such a case the purchasers cannot be said to
be bound to make enquiry about the previous contract from the plaintiff or any
other tenant in occupation of a portion of the house. In such an event the deeming
clause of Illus. II of Section 3 cannot be attracted at all and the Court cannot
presume that the purchaser will have the notice of the title, if any, of any person
who is for the time being in actual possession of only a small fraction of the
property sold.

27. So, far the burden of proof regarding the plea of the purchasers being bona fide
purchasers without notice of the prior contract is concerned, it is well settled that
to defeat a suit for specific performance of contract, the burden Initially lies on the
subsequent purchasers to prove want of notice, but this burden is somewhat light
and even a mere denial may suffice for shifting the burden upon the plaintiff to
prove that the purchasers had the knowledge about his prior contract before he
purchased the property. In any event, when both the parties have given evidence,
the question of burden loses its importance and the question is ultimately one of
appreciating evidence.

28. In view of the principles of law stated above, it cannot be said in the present
case that defendants 2 and 3 shall be deemed to have notice about the alleged

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 agreement between the plaintiff and Md. Isa as the plaintiff was in possession of
only 1/7th of the building purchased by the defendants. In any event, the initial
burden of proof regarding want of knowledge of the alleged prior agreement of
the plaintiff has been discharged by D.W. 9 who is the father and guardian of the
purchasers by stating on oath that he had absolutely no knowledge about the said
agreement before he purchased the building in question from Md. Isa. Ordinarily
one cannot expect any corroboration of such a denial and, in face of this denial, it
was for the plaintiff to prove that in fact defendants 2 and 3 or their father had
knowledge about his alleged agreement. The plaintiff (P.W. 2) himself is the
solitary witness who has deposed on this point and he too has made only a vague
and general statement in his examination-in-chief that these defendants and their
father were aware of his agreement, but he has not explained as to how they could
know about it. In the absence of any statement regarding any circumstance from
which he could gather about their knowledge, it is difficult to accept his bald
evidence in face of the denial of D.W. 9. The mere fact that D.W. 9 was also a
resident of the same locality is not such a circumstance which alone can lead to the
irresistible conclusion that he must be aware of the said agreement, especially
when the locality is a big one comprising of a large number of houses. In such
circumstances, the learned Subordinate Judge was quite justified in holding that
defendants 2 and 3 and their father had no prior knowledge about the alleged
agreement. When they had no prior knowledge about the said agreement, they
cannot be bound by it and the plaintiff cannot enforce his agreement as against
them, even if his agreement would have been a valid and genuine document,
because a bona fide purchaser for value without notice cannot be bound by any
prior agreement between his vendor and the plaintiff.

29. Thus, in any view of the matter, the plaintiff is not entitled to a decree for
specific performance of contract. He also cannot claim a refund of the
consideration money of the agreement, in view of the finding that his agreement
is not genuine and valid. 30. For the reasons stated above, this appeal is dismissed
with costs.

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 V. N. Sarin vs Major Ajit Kumar Poplai on 9 August, 1965

Equivalent citations: 1966 AIR 432, 1966 SCR (1) 349

1. The Judgment of the Court was delivered by Gajendragadkar, C.J. The short
question of law which arises in this appeal is whether the partition of the
coparcenary property among the coparceners can be said to be "an acquisition
by transfer" within the meaning of s. 14(6) of the Delhi Rent Control Act, 1958
(Act No. 59 of 1958) (hereinafter called 'the Act'). This question arises in this
way. The premises in question are a part of a bungalow situate at Racquet
Court Road, Civil Lines, Delhi. The bungalow originally belonged to the joint
Hindu family consisting of respondent No. 2, Mr. B. S. Poplai and his two sons,
respondent No. 1, Major Ajit Kumar Poplai and Vinod Kumar Poplai. The
three members of this undivided Hindu family partitioned their coparcenary
property on May 17, 1962, and as a result of the said partition, the present
premises fell to the share of respondent No. 1.

2. The appellant V. N. Sarin had been inducted into the premises as a tenant
by respondent No. 2 before partition at a monthly rental of Rs. 80. After
respondent No. 1 got this property by partition, he applied to the Rent
Controller for the eviction of the appellant on the ground that he required the
premises bona fide for his own residence and that of his wife and children who
are dependent on him. To this application, he impleaded the appellant and
respondent No. 2. The appellant contested the claim of respondent No. 1 of
three grounds. He urged that respondent No. 1 was not his landlord inasmuch
as he was not aware of the partition and did not know what it contained. He
also urged that even if respondent No. 1 was his landlord, he did not require
the premises bona fide; and so, the requirements of s. 14(1)(e) of the Act were
not satisfied. The last contention raised by him was that if respondent No. 1
got the property in suit by partition, in law it meant that he had acquired the
premises by transfer within the meaning of s. 14 (6) of the Act and the
provisions of the said section make the present suit incompetent.

3. The Rent Controller held that respondent No. 1 was the exclusive owner of
the premises in suit by virtue of partition. As such, it was found that he was the

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 landlord of the appellant. In regard to the plea made by respondent No. 1 that
he needed the premises bona fide as prescribed by s. 14 (1) (e), the Rent
Controller rejected the case of respondent No. 1. The point raised by the
appellant under s. 14(6) of the Act was not upheld on the ground that
acquisition of the suit premises by partition cannot be said to be acquisition by
transfer within the meaning of the said section. As a result of the finding
recorded against respondent No. 1 under s. 14(1) (e) however, his application
for the appellant's eviction failed.

4. Against this decision, respondent No. 1 preferred an appeal to the Rent

Control Tribunal, Delhi. The said Tribunal agreed with the Rent Controller in
holding that respondent No. 1 was the landlord of the premises in suit and had
not acquired the said premises by transfer. In regard to the finding recorded
by the, Rent Controller under s. 14(1) (e), the Rent Control Tribunal came to a
different conclusion. It held that respondent No.1 had established his case that
he needed the premises bona fide for his personal use as prescribed by the said
provision. In the result, the appeal preferred by respondent No. 1 was allowed
and the eviction of the appellant was ordered.

5. This decision was challenged by the appellant by preferring a second appeal

before the Punjab High Court. The High Court upheld the findings recorded
by the Rent Control Tribunal on the question of the status of respondent No. 1
as the landlord of the premises and on the plea made by him that his claim for
eviction of the appellant was justified under s. 14(1)(e). In fact, these two
findings could not be and were not challenged before the High Court which
was dealing with the matter in second appeal. The main contention which was
raised before the High Court was in regard to the construction of s. 14(6); and
on this point, the High Court has agreed with the view taken by the Rent
Control Tribunal and has held that respondent No. 1 cannot be said to have
acquired the premises in suit by transfer within the meaning of the said section.
It is against this decree that the appellant has come to this Court by special
leave. Mr. Purshottam for the appellant argues that the view taken by the High
Court about the construction of s. 14(6) is erroneous in law. That is how the
only point which arises for our decision is whether the partition of the

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 coparcenary property among the coparceners could be said to be an acquisition
by transfer under s. 14(6) of the Act.

6. The Act was passed in 1958 to provide, inter alia, for the control of rents and
evictions in certain areas in the Union Territory of Delhi. This Act conforms to
the usual pattern adopted by rent control legislation in this country. Section
2(e) defines a "landlord" as meaning a person who, for the time being, is
receiving, or is entitled to receive, the rent of any premises, whether on his own
account or on account of or on' behalf of, or for the benefit of, any other person
or as a trustee, guardian or receiver for any other person or who would so
receive the rent or be entitled to receive the rent, if the premises were let to a
tenant. It has been found by all the courts below that respondent No. 1 is a
landlord of the premises and this position has not been and cannot be disputed
in the appeal before us. Section 14 (1) of the Act provides for the protection of
tenants against eviction. It lays down that notwithstanding anything to the
contrary contained in any other law or contract, no order or decree for the
recovery of possession of any premises shall be made by any court or
Controller in favour of the landlord against a tenant. Having thus provided for
general protection of tenants in respect of eviction, clauses (a) to (1) of the
proviso to the said section lay down that the Controller may, on an application
made to him in the prescribed manner, make an order for the recovery of
possession of the premises on one or more of the grounds covered by the said
clauses; clause (e) of s. 14(1) is one of such clauses and it refers to cases where
the premises let for, residential purposes are required bona fide by the landlord
for occupation as therein described. The Rent Control Tribunal and the High
Court have recorded a finding against the appellant and in favour of
respondent No. 1 on this point and this finding also has not been and cannot
be challenged before us.

7. That takes us to s. 14(6). It provides that where a landlord has acquired any
premises by transfer, no application for the recovery of possession of such
premises shall lie under sub section (1) on the ground specified in clause (e) of
the proviso thereto, unless a period of five years has elapsed from the date of
the acquisition. It is obvious that if this clause applies to the claim made by

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 respondent No. 1 for evicting the appellant, his application would be barred,
because a period of five years had not elapsed from the date of the acquisition
when the present application was made. The High Court has, however, held
that where property originally belonging to an undivided Hindu family is
allotted to the share of one of the coparceners as a result of partition, it cannot
be said that the said property has been acquired by such person by transfer;
and so, s. 14(6) cannot be invoked by the appellant. The question which we
have to decide in the present appeal is whether this view of the High Court is
right. Before construing s. 14(6), it may be permissible to enquire what may be
the policy underlying the section and the object intended to be achieved by it.
It seems plain that the object which this provision is intended to achieve is to
prevent transfers by landlords as a device to enable the purchasers to evict the
tenants from the premises let out to them. If a landlord was unable to make out
a case for evicting his tenant under s. 14 (1) (e), it was not unlikely that he may
think of transferring the premises to a purchaser who would be able to make
out such a case on his own behalf; and the legislature thought that if such a
course was allowed to he adopted, it would defeat the purpose of s. 14(1). In
other words, where the right to evict a tenant could not be claimed by a
landlord under s. 14 (1) (e), the legislature thought that the landlord should not
be permitted to create such a right by adopting the device of transferring the
premises to a purchaser who may be able to Prove his own individual case
under s. 14(1) (e). It is possible that this provision may, in some cases, work
hardship, because if a transfer is made by a landlord who could have proved
his case under s. 14 (1) (e), the transferee would be precluded from making a
claim for the eviction of the tenant within five years even. though he, in his
turn, would also have proved his case under s. 14 (1) (e). Apparently, the
legislature thought that the possible mischief which may be caused to the
tenants by transfers made by landlords to circumvent the provisions of s. 14 (1)
(e) required that an unqualified and absolute provision should be made as
prescribed by s. 14(6). That, in our opinion, appears to be the object intended
to be achieved by this provision and the policy underlying it. Mr. Purshottam,
however, contends that when an item of property belonging to the undivided
Hindu family is allotted to the share of one of the coparceners on partition, such
allotment in substance amounts to the transfer of the said property to the said

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 person and it is, therefore, an acquisition of the Said property by transfer.
Prima facie, it is not easy to accept this contention. Community of interest and
unity of possession are the essential attributes of coparcenary property; and so,
the true effect of partition is that each coparcener gets a specific property in lieu
of his undivided right in respect of the totality of the property of the family. In
other words, what happens at a partition is that in lieu of the property allotted
to individual coparceners they, in substance, renounce their right in respect of
the other properties; they get exclusive title to the properties allotted to them
and as a consequence, they renounce their undefined right in respect of the rest
of the property. The process of partition, therefore, involves the transfer of joint
enjoyment of the properties by all the coparceners into an enjoyment in
severalty by them of the respective properties allotted to their shares. Having
regard to this basic character of joint Hindu family property, it cannot be
denied that each coparcener has an antecedent title to the said property, though
its extent is not determined until partition takes place. That being so, partition
really means that whereas initially all the coparceners have subsisting title to
the totality of the property of the family jointly, that joint title is by partition
transformed into separate titles of the individual coparceners in respect of
several items of properties allotted to them respectively. If that be the true
nature of partition, it would not be easy to uphold the broad contention raised
by Mr. Purshottam that Partition of an undivided Hindu family property must
necessarily mean transfer of the property to the individual coparceners. As was
observed by the Privy Council in Girja Bal v. Sadashiv Dhunadiraj and
Others.(1) "Partition does not give him (a coparcener) a title or create a title in
him; it only enables him to obtain what is his own in a definite and specific
form for purposes of disposition independent of the wishes of his former co-
sharers".

8. Mr. Purshottam, however, strongly relies on the fact that there is

preponderance of judicial authority in favour of the view that a partition is a
transfer for the purpose of s. 53 of the Transfer of Property Act. It will be
recalled that the decision of the question as to whether a partition under Hindu
Law is a transfer within the meaning of s. 53, naturally depends upon the
definition of the word "transfer" prescribed by s. 5 of the said Act. Section 5

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 provides that in the following sections, "transfer of property" means an act by
which a living person conveys property, in present or in future. to one or more
other living persons, or to himself, or to (1) 43 I.A. 151 at p. 161.himself and one
or more other living persons. It must be conceded that in a number of cases,
the High Courts in India have held that partition amounts to a transfer within
the meaning of s. 53, vide, for instance, Soniram Raghushet & Others v.
Dwarkabai Shridharshet & Another A.I.R. 1951 Bom. 94. , and the cases cited
therein. On the other hand, there are some decisions which have taken a
contrary view, vide Naramsetti Venkatappala Narasimhalu and Anr. v.
Naramsetti Someswara Rao and Anr., A.I.R 1943 Mad. 505. and Gutta
Radhakrishnayya v. Gutta Sarasamma A.I.R. 1951 Mad. 213 .

9. In this connection, Mr. Purshottam has also relied on the fact that under s. 17
( 1 ) (b) of the Indian Registration Act, a deed of partition is held to be a non-
testamentary instrument which purports to create a right, title or interest in
respect of the property covered by it, and his argument is that if for the purpose
of s. 17 (1) (b) of the Registration Act as well as for the purpose of s. 53 of the
Transfer of Property Act, partition is held to be a transfer of property, there is
no reason why partition should not be held to be an acquisition of property by
transfer within the meaning of s. 14(6) of the Act.

10. In dealing with the present appeal, we propose to confine our decision to
the narrow question which arises before us and that relates to the construction
of s. 14(6). What s. 14(6) provides is that the purchaser should acquire the
premises by transfer and that necessarily assumes that the title to the property
which the purchaser acquires by transfer did not vest in him prior to such
transfer. Having regard to the object intended to be achieved by this provision,
we are not inclined to hold that a person who acquired property by partition
can fall within the scope of its provision even though the property which he
acquired by partition did in a sense belong to him before such transfer. Where
a property belongs to an undivided Hindu family and on partition it falls to
the share of one of the coparceners of the family, there is no doubt a change of
the landlord of the said premises, but the said change is not of the same
character as the change which is effected by transfer of premises to which s.

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 14(6) refers. In regard to cases falling under s. 14(6), a person who had no title
to the premises and in that sense, was a stranger, becomes a land- lord by virtue
of the transfer. In regard to a partition, the position is entirely different. When
the appellant was inducted into the premises, the premises belonged to the
undivided Hindu family consisting of respondent No. 1, his father and his
brother. After partition, instead of the alone bad become landlord of the
premises. We are satisfied that it would be unreasonable to hold that allotment
of one parcel of property belonging to an undivided Hindu family to an
individual coparcener as a result of partition is an acquisition of the said
property by transfer by the said coparcener within the meaning of s. 14(6). In
our opinion, the High Court was right in coming to the conclusion that s. 14 (6)
did not create a bar against the institution of the application by respondent No.
1 for evicting the appellant. In this connection, we may refer to a recent decision
of this Court in the Commissioner of Income-tax, Gujarat v. Keshavlal
Lallubhai Patel. 1965 2 S.C.R. 100. In that case, the respondent Keshavlal had
thrown all himself-acquired property into the common hotchpotch of the
Hindu undivided family which consisted of himself, his wife, a major son and
a minor son. Thereafter, an oral partition took place between the members of
the said family and properties were transferred in accordance with it in the
names of the several members. The question which arose for the decision of
this Court was whether there was an indirect transfer of the properties allotted
to the wife and minor son in the partition within the meaning of s. 16 (3) (a) (iii)
and (iv) of the Indian Income-tax Act. 1922. This Court held that the oral
partition in question was not a transfer in the strict sense and should not,
therefore, be said to attract the provisions of s. 1 6 (3)(a) (iii) and (iv) of the said
Act. This decision shows that having regard to the context of the provision of
the Income-tax Act with which the Court was dealing it was thought that a
partition is not a transfer. Considerations which weighed with the Court in
determining the, true effect of partition in the light of the provisions of the said
section, apply with equal force to the interpretation of s. 14(6) of the Act.

11.In the result, the appeal fails and is dismissed with costs. Before we part
with this appeal, we would like to add that on the appellant undertaking to
vacate the suit premises within three months from the date of this decision, Mr.

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 Sastri for respondent No. 1 has fairly agreed not to execute the decree during
the said period. Appeal dismissed.

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 Kenneth Solomon vs Dan Singh Bawa
AIR 1986 Delhi 1, 28 (1985) DLT 229, 1985 (9) DRJ 292, 1985 RLR 438

JUDGMENT G.C. Jain, J.

(1) Dr. (Mrs.) C.L. Sury was lessee of house No. 72, Baber Road, New Delhi under
the respondent Dan Singh Bawa. The agreed rent was Rs. 37.82 per month. She
died in October, 1967.
(2) On April 22, 1968 the landlord brought an application against the present
appellant Kenneth Solomon for recovery of possession of the tenancy premises.
The eviction was claimed under proviso (b) to Sub Section (1) of Section 14 of the
Delhi Rent Control Act, 1958 (for short 'the Act) on the allegations that the tenant
had left no heir and had in her life time parted with the possession of the premises
in dispute in favor of the appellant without the written consent of the landlord.
(3) The appellant defended the claim. The plea raised was that that contractual
tenancy in favor of Dr. Sury had not been determined. The tenancy rights devolved
on him and another person under a will dated March 31, 1957. In case it was held
by the court that he could not inherit the tenancy rights under the will the same
devolved on him as an heir being Dr. Sury's nearest kinsman.

(4) The Additional Rent Controller by his order dated December 18, 1973 came to
the conclusion that the tenancy rights had not been bequeathed by Dr. Sury under
the will in question. The appellant who was a nephew of Dr. Sury inherited those
rights as an heir and therefore there was no parting with possession by the tenant.
With these findings he dismissed the eviction petition. This finding was, however,
reversed in appeal by the learned Rent Control Tribunal. It was held that the tenant
had bequeathed the tenancy rights in favor of the appellant under the will which
act amounted to parting with possession of the premises. Consequently, an order
for recovery of possession was granted in favor of the respondent against the
appellant on October 28, 1976. Feeling aggrieved the appellant has filed the present
appeal.

(5) Mr. Vohra, learned counsel appearing for the appellant has raised two main
questions: (1) that the tenancy rights Were not disposed under the will and (2) that

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 the act of bequeathing the tenancy rights by making a will would not amount to
parting with possession of the premises within the meaning of the provisions
contained in proviso (b).

(6) A will has to be construed like any other document. The duty of the court is to
ascertain the testator's intention from the words used in the will. The will EX.RW
1/1, no doubt, makes no specific mention of the tenancy rights. It however has a
residuary clause which reads ;-- “hereby bequeath, give and devise all my
moveable and immoveable properties, whatsoever, howsoever, and where-so-ever
situate at the time of my death including all the monies which may be left over
after paying my Funeral and Monument Expenses and for my Dogs expenses to
be equally divided by my Trustees among my two nephews :-- 1. Kenneth
Solomon-son of John Solomon--at present residing at. Chabiganj, Kashmere Gate)
Delhi. 2. Pannel Richard Solomon son of John Solomon-at present residing at
Chabiganj, Kashmere Gate, Delhi."

(7) A lease, as defined by Section 105 of the Transfer of Property Act, is a transfer
of a right to enjoy immoveable property turn a term or in perpetuity in
consideration of a price paid or promised or services or other things of Value to be
rendered periodically or on specified occasions to the transferor- by the transferee.
The right of enjoyment contemplated by this Section is an interest in the
immoveable property. The agreement of lease confers on the lessee the right to
possess the immoveable property subject matter of the lease. It being an interest in
the immoveable property would be covered under the expression "all my
moveable and immoveable properties" used in the above quoted residuary clause
of the will. The word 'Property' includes all legal rights of a person except his
personal rights which constitutes his status or personal condition. The tenancy
rights would definitely be included in the words "all my moveable and
immoveable properties". have examined the will carefully and I agree with the
learned Tribunal that the will does not indicate any intention of the testator to
exclude the tenancy rights. On the other hand the residuary clause referred to
above shows that the intention was to give all her moveable and immoveable
properties except the properties for which a specific provision was made. The
tenancy rights, therefore devolved on she appellant under the will.

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 (8) Now I turn to examine the next question. The question for determination is
whether the act of disposing the tenancy rights by making a will amounts to
'parting with possession' and entitles the landlord to claim eviction under proviso
(b) to Sub-Section (1) of Section 14 of the Act. These provisions read:- "14.Protection
of tenant against eviction- (1) Notwithstanding anything to the contrary contained
in any other law or contract, no order or decree for the recovery of possession of
any premises shall be made by any court or Controller in favor of the landlord
against a tenant : Provided that the Controller may, on an application made to him
in the prescribed manner, make an order for the recovery of possession of the
premises on one or more of the following grounds only. namely- (b) that the tenant
has, on or after the 9th day of June, 1952 Sub-let, assigned or otherwise parted with
the possession of the whole or any part of the premises without obtaining the
consent in writing of the landlord. "

(9) The case set up by the landlord is that the tenant had parted with the
possession of the tenancy premises. The expression "otherwise parted with the
possession" has not been defined in the Act. "Parted with" according to Chambers
20th Century Dictionary, New Edition, inter alia, means 'to relinquish'. Stroud's
Judicial Dictionary 4th ed. explains the term 'part with' in these words : "(2)A
lessee's covenant not to "part with the possession of the demised premises or any
part thereof" is broken only if the lessee entirely excludes himself from the legal
possession or part of the premises (Sterling v. Abrahams (1931) 1 Ch. 470)."

(10) The expression "parted with possession", therefore, means giving the legal
possession acquired under the lease to a person who was not a party to the lease
agreement. Undoubtedly, there must be vesting of possession of the tenancy
premises by the tenant in another person by divesting himself not only of physical,
possession but also of a right to possession.

(11) "WILT" as defined under Section 2(h) of the Indian Succession Act, means the
legal declaration of the intention of the testator with respect to his property which
he desires to be carried into effect after his death. One characteristic of a will as
distinguished from other kinds of instruments disposing of property is its

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 revocable nature. It is ambulatory until the death of the testator. It is dependent
upon the testator's death for its vigour and effect. Till that event it is only an
expression of intention to deal with the property in a particular manner. But the
moment the testator dies, it has the effect of vesting the property subject matter of
the will in the devisee. At that point of time it would have the same effect as a
transfer of possession by sale or mortgage. The process of parting with possession
thus starts on the execution of the will but matures only on the death of the
testator. The tenancy rights disposed under a will would vest in the devisee
immediately on the death of the testator. This vesting, in my judgment, would
amount to parting with possession within the meaning of the provisions contained
in proviso (b).

(12) In Nathud & others, v. Devi Singh &Another, , a Division Bench after
examining the provisions contained in proviso (c) to Sub-section (1) of Section 13
of the Delhi and Ajmer Rent Control Act (38 of 1952), which provisions were
similar to the provisions contained in proviso (b) to Sub-Section (1) of Section 14
of the Act, held :- "WHAT is hit by proviso (c) is a volitional transfer by a tenant
without the consent of the landlord. If on the death of a person holding contractual
tenancy the suit premises come into the hands of the heirs of the tenant that is not
an intentional or volitional transfer and such parting with the possession would
not be affected. The case of parting with possession by will is, however, clearly
envisaged in proviso (c) to Sub-section (1) of Section 13." The Division Bench had
relied on an earlier D.B. decision in Ram Dass Vs. Roopchand F.A.'No.119-D of
1960 decided on September 12, 1964.

(13) Section 15(1) of the Bombay Rents, Hotel and Lodging House Rates Control
Act (57 of 1947) prohibits the tenant to sublet the whole or any part of the premises
let to him or transfer in any other manner his interest therein. The contravention
of these terms invites the penalty of eviction. Examining these terms a Division
Bench of the Bombay High Court in Dr. Anant Trimbak Sabnis v. Vasant Pratdp
Pandit, held :- "IT is true that the bequest becomes effective only after the death of
the testator and is liable to be revoked at any time. This by itself however, cannot
make it anything but transfer. Even the restricted concept of "transfer" inter vivos

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 in Section 5 of the T.P. Act contemplated its becoming effective at some future date
in a given case. Bequest does result in the passing of the property from the testator
to the legatee. It is no doubt different in its nature from the sale, mortgage, lease
or gift. It is nonce the-less, a transfer in its generic sense." These decisions fully
support my view.

(14) Relying on the definition of expression ''transfer of property" given in Section

5 of the Transfer of Property Act and the decision in Raja Surendra Vikram Singh
Vs. Rani Munia Kunwar and Another, Air 1944 Oudh 65 and Lala Devi Doss v.
Panna Lal Air 1959 J.&.K 62. Mr. Vohra contended that making of a will would not
amount to transfer.

(15) "TRANSFER of property", according to the definition given in Section 5 of the

Transfer of Property Act, means an act by which a living person conveys property
in present or in future to one or more other living persons or to himself, and one
or more other living persons. True, these words exclude transfer by will, for a will
operates after the death of the testator. The act of making a will in itself would not
attract the provisions contained in proviso (b). No landlord can claim eviction,
during the life time of the tenant, on the ground that the tenant had made a will
disposing the tenancy rights. It is for the simple reason that it can be revoked at
any time. By itself it does not vest the legal possession in the devisee. However,
there is no escape from the conclusion that by his voluntary act the tenant parts
with the possession of the tenancy premises though from the date of his death in
case the will remains unrevoked. Dr. Sury by her act of bequeathing the tenancy
rights by means of the will in favor of the petitioner and his brother had parted
with possession within the meaning of proviso (b). The landlord was, therefore,
entitled to claim eviction. (16) In Raja Surendra Vikram Singh v. Rani Munia
Kunwar (supra) the court examined the meaning of the word 'transfer' under the
Transfer of Property Act. The question whether disposing of the tenancy rights by
a will would amount to transfer or parting with possession under the rent Acts
was not involved in that case. Similarly this question was not considered by the
Full Bench of Jammu & Kashmir High Court in Kala Devi Dass v. Panna Lal
(supra).

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 (17) Mr. Vohra also relied on a single bench decision of this court in The Vaish
Cooperative Adarsh Bank Ltd. Delhi v. M/s. Suraj Balram Sawhney and sons and
Anr , 1973 Rcr 217. In that case a cooperative society registered under the Bombay
Cooperative Societies Act was the tenant. It stood dissolved. On the same day a
new society came into existence and the new society was in possession of the
tenancy premises when the eviction was claimed. It was held that it was not a case
of subletting or parting with possession. The reason given in support of this
decision is that it was the tenant's overt act of subletting assignment or parting
with possession without the consent in writing of the landlord which gives a cause
of action to the landlord to move an application for an order of possession against
the tenant or his assignee or both the committing of this overt act pre-supposes the
existence of the person whose act gives the cause of action. If the effect of law was
that the tenant ceased to exist simultaneously with the coming into existence of the
new society, it follows that the tenant was not in a position nor had a legal capacity
to do something which may be called the overt act which in turn gives rise to the
cause of action to the landlord to file an application to recover possession. This is,
however, not the case here. Here the tenant's overt act consisted in her making the
will which was a voluntary act.

(18) It was also contended by the learned counsel for the appellant that the
respondent in the eviction petition had pleaded that the tenant had parted with
the possession of the premises in her life time and cannot now be allowed to say
that the parting with possession was on the date of her death. The respondent,
argued the learned counsel, cannot be allowed to set up a new case. This
submission has no merit.

(19) In para 16 of the petition it was averred that the present appellant was a
person to whom the possession of the tenancy premises had been parted with by
the deceased tenant without the written consent of the landlord. In para 18 (1) it
was alleged that the tenant in her life time parted with possession of the tenancy
premises in dispute in favor of the present appellant. No doubt, the averment was
that the possession of the tenancy premises was parted with in her life time. That,
however, would not make much difference, because the process of parting with
possession started in her life time when she executed the will declaring her

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 intention to dispose the tenancy rights in favor of the appellant. The act, of course,
matured on her death. But the fact remains that the process started in her life time.
It cannot be said that the respondent was setting a new case.

(20) In conclusion, I find no merit in the appeal and dismiss the same. The
appellant, however, is allowed three months‟ time to vacate the premises. Parties
are left to bear their own costs.

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 Mohar Singh (Dead By Lrs.) vs Devi Charan & Others
AIR 1988 SCR Supl. (1) 255 2.

1. The first-respondent was a tenant of two adjacent shops, under a single

lease, obtained from two co-owners Shri Jado Ram and Asha Ram who had,
respectively 3/8th and 5/8th shares in the property. Appellant, Mohar Singh
became the transferee of the 3/8th share of Jadoram. Similarly, Asha Ram's
5/8th interest came to be transferred, through an intermediary alienation, to a
certain Gyan Chand.
2. Pursuant to a decree in a civil suit for partition between Gyan Chand and
the appellant, the co-ownership came to an end and towards his share appellant
was allotted, and became the exclusive owner of, one of the shops. That is the
subject- matter of the present proceedings.

3. Appellant instituted proceedings for eviction against the First respondent

under Section 21 of U.P. Act XIII of 1972 before the prescribed authority on the
ground of his own bonafide need. The prescribed-authority ordered release of
the premises and made an order granting possession. The appeal preferred by
the First-respondent before the District Judge, Muzaffarnagar was dismissed.
First-respondent then moved the High Court in Writ No. 2280 of 1979. The
findings as to the bona fides and reasonableness of the requirement of the
appellant, stand concluded by the concurrent findings of the statutory
authorities. Indeed that was not also the ground on which the order of eviction
was assailed before the High Court in the writ petition

4. Before the High Court what was urged by the First- respondent, and accepted
by the High Court, was the contention that the severance of the reversion and
assignment of that part of the reversion in respect of the suit shop in favour of
the appellant did not clothe the appellant with the right to seek eviction without
the other lessor joining in the action; and that in claiming possession of a part
of the subject matter of the original- lease the appellant was seeking to split the
integrity and unity of the tenancy, which according to the First- respondent, was
impermissible in law. The High Court does not appear to have considered the
effect of the partition decree between erstwhile co-owners and of the appellant,

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 consequently, having become the exclusive owner of one of the shops. The
reasoning that appears to have commended itself to the High Court in setting-
aside the order made by the Courts-below granting possession, is somewhat on
these lines: ".... But unless such a situation has been created with the consent of
all of them, the effect of transfer of a portion of the accommodation would be
that in place of one lessor would be substituted two lessors, even though of
defined portions of the accommodation let out to the lessee. It cannot be denied
that one of the two joint lessors cannot institute a suit for ejectment or apply for
permission to file such a suit in respect of a portion of the accommodation."
"........ In other words even now as a result of transfer a part of the building under
tenancy the splitting up of the tenancy cannot be permitted unless the tenant
has agreed to it. On this view of the matter, the impugned orders are liable to
be quashed."

5. It is trite proposition that a land-lord cannot split the unity and integrity of
the tenancy and recover possession of a part of the demised premises from the
tenant. But Section 109 of the Transfer of Property Act provides a statutory
exception to this rule and enables an assignee of a part of the reversion to
exercise all the rights of the landlord in respect of the portion respecting which
the reversion is so assigned subject, of course, to the other covenant running
with the land. This is the true effect of the words 'shall possess all the rights ......
of the lessor as to the property or part transferred ......' occurring in Section 109
of the T.P. Act. There is no need for a consensual attornment. The attornment is
brought about by operation of law. The limitation on the right of the landlord
against splitting-up of the integrity of the tenancy, inhering in the inhibitions of
his own contract, does not visit the assignee of the part of the reversion. There
is no need for the consent of the tenant for the severance of the reversion and
the assignment of the part so severed. This proposition is too well-settled to
require any further elucidation or reiteration. Suffice it to refer to the succinct
statement of the law by Wallis, CJ in Kannyan v. Alikutty, AIR 1920 Madras 838
(FB) (at 840). "..... A lessor cannot give a tenant notice to quit a part of the holding
only and then sue to eject him from such part only, as pointed out quite recently
by the Privy Council in Harihar Banerji v. Ramasashi Roy, AIR 1918 PC 102.
Consequently, if the suit is brought by the original lessor the answer to the

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 question referred to us must be in the negative because such a suit does not lie
at all. Other considerations, however, arise, where, as in the present case, the
original lessor has parted in whole or in part with the reversion in part of the
demised premises. Under the general law such an assignment effects a
severance, and entitles the assignee on the expiry of the term to eject the tenant
from the land covered by the assignment."

6. Shri Uma Dutta, learned counsel for the respondent- tenant, however, relied
on the pronouncement of this Court in Badri Narain Jha and Ors. v. Rameshwar
Dayal Singh and Ors., [1951] SCR 153 (159) to support his contention that
severance and assignment of a part of the reversion would not affect the
integrity of the lease. We are afraid, reliance on this case is somewhat misplaced.
This was a converse case where this Court considered the effect of splitting-up
of the interest of the lessees, inter-se. In that context, Mahajan, J said: ".... An
inter-se partition of the mokarrari interest amongst the mokarraridars as alleged
by the plaintiffs could not affect their liability qua the lessor for the payment of
the whole rent, as several tenants of a tenancy in law constitute but a single
tenant, and qua the landlord they constitute one person, each constituent part
of which possesses certain common rights in the whole and is liable to discharge
common obligations in its entirety .........." "There is a privity of the estate
between the tenant and the landlord in the whole of the leasehold and he is
liable for all the covenants running with the land. In law, therefore, an inter-se
partition of the makarrari interest could not affect the integrity of the lease ......"
This is an altogether different proposition.

7. The next contention of Shri Uma Datta is that, at all events, what flows from
a 'transfer' under section 5 read with Section 109 of T.P. Act cannot be predicated
of a partition as partition is no 'transfer'. It is true that a partition is not actually
a transfer of property but would only signify the surrender of a portion of a joint
right in exchange for a similar right from the other co-sharer or co- sharers.
However, some decisions of the High Courts tend to the view that even a case
of partition is covered by Section 109 and that, in any event, even if the section
does not in terms apply the principle of the section is applicable as embodying
a rule of justice, equity and good conscience. We need not go into this question

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 in this case. Suffice it to say that the same High Court itself, from whose decision
this present appeal arises, in Ram Chandra Singh v. Ram Saran & Ors., AIR 1978
Allahabad 173 has taken the view that section 109 of T.P. Act is attracted to the
case of partition also. That was a decision which the learned judge in the present
case should have considered himself bound by, unless there was a
pronouncement of a larger bench to the contrary or unless the learned judge
himself differed from the earlier view in which event the matter had to go before
a Division Bench. The correctness of the decision in Ram Chandra Singh's case
was not assailed before us and, therefore, we do not feel called upon to
pronounce on it. We should, we think apply the same rule to this case. Several
other High Courts have also taken this view, though, however, some decisions
have been content to rest the conclusion on the general principle underlying
Section 109, T.P. Act, as a rule of justice, equity and good conscience. 8. In the
result, this appeal is allowed, the order of the High Court set-aside and that of
the III Additional District Judge, Mazaffarnagar in Rent Control Appeal No. 48
of 1978 restored. In the circumstances of this case, there will be no order as to
costs. Appeal allowed.

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 N. Ramaiah vs Nagaraj S. And Another
AIR 2001 Kant 395

JUDGMENT R.V. Raveendran, J. 1. Feeling aggrieved by the rejection of his

application for impleading (I.A. No. VIII) in Probate C.P. No. 8 of 1998 pending on
the file of this Court, the appellant has filed this appeal.

2. The appellant (N. Ramaiah) is the brother of one Anjanamma. The said
Anjanamma was the widow, and the respondent herein (S. Nagaraj) is the nephew
(brother's son), of one Muni Narayanappa. The respondent herein (S. Nagaraj)
filed Probate C.P. No. 8 of 1998 for grant of letters of administration in regard to a
Will dated 11-1-1998 said to have been executed by the Muni Narayanappa. The
said Will was contested by Anjanamma, widow of Muni Narayanappa, inter alia
on the grounds that the said Will was a gotup document, and that she had
succeeded to the properties of Muni Narayanappa as his sole legal heir.

3. In the said proceedings, the said S. Nagaraj filed I.A. No. I on 16-3-1998 seeking
a temporary injunction to restrain Anjanamma from alienating/encumbering the
properties, or withdrawing the amounts from the Banks, mentioned in the
Schedule therein on the ground that the said properties were bequeathed to him
under the Will dated 11-1-1998 by Muni Narayanappa. Item 'A' of the Schedule to
the said application (I.A. No. I) is land and building in Khata No. 280/6 4B, Hennur,
Bangalore with the running business of Cauvery Service Station. Item 'B' in the
Schedule was the house in the occupation of Anjanamma and the building in the
occupation of Sitaram Agencies. Item 'C' related to Bank balances/deposits. The
learned Single Judge made an order on the said application on 18-6-1998 directing
the respondent therein (Anjanamma) to maintain status quo in regard to the
properties until further orders.

4. Subsequently, the said Anjanamma died on 11-12-1998 and the appellant herein
filed an application (I.A. No. VIII) for impleading himself as the respondent in
Probate C.P. No. 8 of 1998 in place of the deceased Anjanamma, by claiming to be

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 the legatee under the registered Will dated 15-9-1998 of the said Anjanamma. He
claimed that Anjanamma had bequeathed her properties described in the Schedule
to her Will dated 15-9-1998 to him and his children and therefore he is one of the
co-owners of the properties which were the subject-matter of Probate C.P. No. 8 of
1998. Schedule 'A' to the said Will dated 15-9-1998 relates to property bearing Sy.
No. 6/4B measuring 1 acre in Hennur Road, Bangalore with a residential house
and a petrol bunk by name Cauvery Service Station with all machineries, etc.
Schedules 'B' and 'C' relate to amounts in Bank accounts and deposits.

5. It is stated that the property described in Schedule 'A' in the alleged Will of
Anjanamma is the same as the properties described as Items A and B in the
Schedule to I.A. No. I in Probate C.P. No. 8 of 1998, which was the subject-matter
of the order of status quo.

6. The said application for impleading was resisted by S. Nagaraj. The learned
Single Judge, accepting the objections, has dismissed the application for
impleading, holding that the Will dated 15-9-1998 was executed by Anjanamma,
in breach and defiance of the order of status quo and therefore non est and of no
legal consequence and will have to be ignored; and that the appellant who based
his right on such Will of Anjanamma, had no locus standi to apply for impleading
and was not entitled to come on record and contest the proceedings for letters of
administration filed by the respondent, in regard to the Will of Muni
Narayanappa. The relevant portion of the order of the learned Single Judge is
extracted below for ready reference.- "4. Dealing with the objection regarding the
execution of the alleged Will on 15-9-1998 during the pendency of the prohibitory
order passed by this Court, applicant's learned Counsel contended that the status
quo order only restricted alienations and it is his contention therefore that the
order in question does not come in the way of the parties executing documents
which is different from alienation. To my mind, this is virtually legal hairsplitting;
when a Court passes an order directing the parties to maintain status quo, the
order is a blanket prohibitory order whereunder the parties would be precluded
not only from effecting alienations or changes but more importantly by necessary
implication from doing any acts whereby the situation vis-a-vis that property gets
altered. It would be downright ridiculous to contend that the order only limits

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 physical alienation because it would mean that a party can completely alter the
situation by executing documents which would create rights in third parties and
can still contend that merely because there is no physical alienation or change that
it is within the framework of the order. When a Court orders the maintenance of
status quo, it necessarily implies a prohibition on the creation of new right, title or
interest through the execution of any documents. If the need arises, it is open to
the party to apply to the Court either for vacating or modifying the order or
obtaining the sanction of the Court for doing any of the acts which the party
desires to undertake. But in my considered view, the execution of a document by
a party to a proceeding in rank defiance of an interim order cannot under any
circumstances be construed as being outside the ambit and scope of that order. It
only goes without saying that such a document even if executed would be wholly
non est because no right, title or interest of any type can flow from a document
executed in defiance of a prohibitory order of a Court because that document is
virtually rendered invalid. This to my mind is the essence of the issue that falls for
determination before this Court". (emphasis supplied)

7. Feeling aggrieved, the applicant in I.A. No. VIII in Probate C.P. No. 8 of 1998,
has filed this appeal contending that an order of status quo in regard to a property
did not bar the execution of a Will bequeathing such property, nor affected the
validity of the bequest made under such a Will; and that on the death of
Anjanamma, he ought to have been permitted to come on record to contest the
alleged Will of Muni Narayanappa.

8. On the other hand, learned Counsel for the respondent supported the order of
the learned Single Judge, by putting forth the following contentions: (i) The
learned Single Judge had directed Anjanamma to maintain status quo in regard to
the properties; that the said order was passed on an application filed by the
petitioner in Probate C.P. No. 8 of 1998, seeking a direction to Anjanamma that she
should not alienate or encumber the properties mentioned in the Schedule to the
said application. The order of status quo would therefore mean that the Court had
barred her from transferring or alienating the property in any manner. Section 5
of the Transfer of Property Act, 1882 defines 'transfer of property' as an act by
which a living person conveys property, in present or in future, to one or more

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 other living persons. Having regard to the said definition, a bequest under a Will
is nothing but a 'transfer of property in future'. By executing a Will dated 15-9-1998
bequeathing the property in favour of the appellant and his children, Anjanamma
effected a future transfer of the property, thereby violating the order of status quo.
Therefore her Will, as also the bequest of the property thereunder, are invalid. (ii)
Section 59 of the Indian Succession Act, 1925 enumerates the persons capable of
making Wills. Explanation 1 thereto makes it clear that a married woman (who is
of sound mind, not being a minor), may dispose of by Will, any property which
she could alienate by her own act during her life. Section 30 of the Hindu
Succession Act, 1956 provides that any Hindu may dispose of by Will or other
testamentary disposition, any property, which is capable of being so disposed of
by him in accordance with the provisions of the Indian Succession Act, 1925 or any
other law for the time being in force and applicable to Hindus. A combined
reading of Section 59 of the Indian Succession Act and Section 30of the Hindu
Succession Act shows that Anjanamma could dispose of by Will, only such
property, which she could have alienated by her own act during her lifetime. On
15-9-1998 when the Will was executed, the order of status quo was in force which
prohibited her from transferring the property and therefore she could not have
transferred the property on 15-9-1998; and what could not be transferred by her
on 15-9-1998 by her own act could not be disposed of under a Will on that date.
Therefore the Will and bequest are invalid.

9. One Suguna has filed I.A. No. IV for impleading, in this appeal contending that
she is the adopted daughter of Muni Narayanappa and the Will dated 15-9-1998
put forth by the appellant was not executed by Anjanamma and is a got up
document; and that she has filed a suit for partition against Anjanamma in O.S.
No. 2817 of 1998. It is not necessary to consider the claims of Suguna in this appeal.
If she has any grievance she can get herself impleaded in Probate C.P. No. 8 of 1998
or independently challenge the Will dated 15-9-1998. Hence, I.A. No. IV for
impleading has no merit and is rejected.
10. The rival contentions give rise to the following points for consideration: (i)
whether a bequest of a property under a Will is a transfer of the property; (ii)
whether a direction to a party to maintain status quo in regard to a property,
prohibits him from making a testamentary disposition; and whether a Will made

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 during the operation of an order of status quo regarding a property, is void and
non est insofar as the bequest relating to such property. Re: Point (i):

11. Transfer of Property Act, 1882 ('TP Act' for short) deals with transfers inter
vivos, that is, the act of a living person, conveying a property in present or in
future, to one or more living persons. The provisions of TP Act are inapplicable to
testamentary successions which are governed by Indian Succession Act, 1925.
Section 2(h) of the Indian Succession Act defines 'Will' as the legal declaration of
the intention of a testator with respect to his property which he desires to be
carried into effect after his death.

12. The differences between a transfer and a Will are well-recognised. A transfer
is a conveyance of an existing property by one living person to another (that is
transfer inter vivos). On the other hand, a Will does not involve any transfer, nor
effect any transfer inter vivos, but is a legal expression of the wishes and intention
of a person in regard to his properties which he desires to be carried into effect
after his death. In other words, a Will regulates succession and provides for
succession as declared by it (testamentary succession) instead of succession as per
personal law (non-testamentary succession). The concept of transfer by a living
person is wholly alien to a Will. When a person makes a Will, he provides for
testamentary succession and does not transfer any property. While a transfer is
irrevocable and comes into effect either immediately or on the happening of a
specified contingency, a Will is revocable and comes into operation only after the
death of the testator. Thus to treat a devise under a Will as a transfer of an existing
property in future, is contrary to all known principles relating to transfer of
property and testamentary succession.

13. The learned Single Judge proceeded on a wrong premise when he observed
that execution of a Will by a testator devising his property, amounts to execution
of a document creating new right, title or interest in a property and therefore
execution of a Will violates the order of status quo. By execution of a Will, no right
or title or interest is created in favour of anyone during the lifetime of the deceased.
The first point is therefore answered in the negative. Re: Point (ii):

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 14. In this case, Nagaraj, the petitioner in Probate C.P. No. 8 of 1998, filed I.A. No.
I seeking a temporary injunction restraining Anjanamma from alienating or
encumbering the property or withdrawing the amount from the Bank, described
in the Schedule to the application. There was no dispute that Anjanamma was in
possession of the properties left by Muninarayanappa. The learned Single Judge
merely directed Anjanamma to maintain status quo with regard to the properties.
It was not clarified as to whether she was required to maintain status quo in regard
to the possession of the property or title to the property.

15. No Court has the power to make an order, that too an interim order, restraining
an individual from exercising his right to execute a Will and thereby regulate
succession on his death. A direction to a party to maintain status quo in regard to
a property does not therefore bar him from making a testamentary disposition in
regard to such property. By making a Will, the testator neither changes title nor
possession in regard to a property nor alters the nature or situation of the property
nor removes or adds anything to the property. In short the testator, by making a
Will does not alter the existing state of things in regard to the property. It follows
therefore that making of a Will in regard to a property does not violate an order of
status quo in regard to such property, and consequently, the testamentary
disposition is neither void nor voidable.

16. The prayer in I.A. No. I in Probate C.P. No. 8 of 1998 and the context in which
the status quo order dated 18-6-1998 was granted, while considering the
interlocutory application, makes it evident that the order merely directed
Anjanamma not to alienate or convey the property and did not prohibit her from
executing a Will making a testamentary disposition in regard to the property.

17. We will now deal with the contention of the respondent based on Section 30 of
the Hindu Succession Act, 1956 read with Section 59 of the Indian Succession Act,
1925. Section 30 of the Hindu Succession Act, 1956 provides that any Hindu may
dispose of by Will or other testamentary disposition, any property, which is
capable of being so disposed of by him, in accordance with the provisions of an
Indian Succession Act, 1925 or any other law for the time being in force and
applicable to Hindus. Section 59 of the Indian Succession Act provides that a

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 married woman may dispose by Will of any property which she could alienate by
her own act during her life.

18. These provisions deal with the legal capacity to make a Will and who can and
who cannot make a Will. Section 59 makes it clear that any person can make a Will
if he is of a sound mind and is not a minor. Explanation 1 to Section 59 clarifies
what can be disposed by Will by a married woman and states that any property
which she could alienate by her own act during her life can be disposed by Will. It
follows that a married woman who cannot alienate a property by her own act
during her life, cannot dispose of the property by a Will. 18.1 For example, prior
to the coming into force of Hindu Succession Act, 1956, a Hindu widow could not
dispose of by Will, any property inherited by her from her husband. Similarly, the
holder of a mere life interest in a property could not make any Will in regard to
the property as his or her interest is limited to his life and cannot enure to the
benefit of anyone beyond her lifetime. 18.2 The bar contemplated in Explanation 1
to Section 59 is a bar or permanent inability under the personal law or a statute. It
does not refer to a temporary prohibition arising from an injunction issued by a
Court. Neither Section 59 of the Indian Succession Act nor Section 30 of the Hindu
Succession Act has, therefore, any relevance.

19. Both parts of point (ii) are therefore answered in the negative. A digression re:
'status quo'

20. We may at this juncture advert to the confusion caused by orders directing
status quo. The parties are (or a party is) normally directed to maintain status quo
in regard to a property, so that the position does not get altered or become
irreversible pending decision in the suit or legal proceeding. The term 'status quo'
means the 'situation that currently exists' or the 'existing state of things at any
given point of time'. The Supreme Court in Bharat Coking Coal Limited v State of
Bihar and Others', has recognised the fact that "the expression "status quo" is
undoubtedly a term of ambiguity and at times give arise to doubt and difficulty".

21. The Court while making an order to maintain status quo, should endeavour to
clarify the conditions, in the context of which or subject to which, such direction is

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 issued, as the words status quo take contextual meaning and may give room for
several different interpretations. Let us illustrate. Illustration (i): If a person puts
up a construction in his site violating the set back requirements and if the owner
of a property approaches the Court seeking an injunction restraining the adjoining
owner from proceeding with the construction in violation of building bye-laws
and the Court orders status quo, the order may mean that no further construction
shall be made and the construction shall be maintained in the same position as on
the date of the order. Illustration (ii): If a member of a joint family files an
application seeking an injunction in a suit for partition, restraining the kartha from
alienating the joint family property and the Court grants an order of status quo, it
may mean that the defendant should not alienate the property. Illustration (iii): If
a plaintiff seeks an injunction restraining the defendant from harvesting a crop in
the suit land and the Court orders status quo, it may mean that defendant should
not harvest the standing crop. Illustration (iv): In service litigation, if the employee
seeks a direction to employer not to terminate his services and the Court directs
defendant to maintain status quo, it may mean that defendant should not
terminate the service of the employee.

22. An order of status quo is a specie of interim orders, when granted

indiscriminately and without qualifications or conditions, leads to ambiguity,
difficulties, and injustice. If Courts want to give interim relief, they should
endeavour to give specific injunctive relief. If grant of order of 'status quo' is found
to be the only appropriate relief, then Courts should indicate the nature of status
quo, that is whether the status quo is in regard to possession, title, nature of
property or some other aspect. Merely saying 'status quo' or 'status quo to be
maintained' should be avoided. If in a suit for injunction, where plaintiff claims
that he is in possession of the suit property and the defendant is attempting to
interfere with his possession, and the defendant contends that he is in possession
and petitioner was never in possession, if the Court merely directs status quo to be
maintained by parties, without saying anything more, it Will cause confusion and
in many cases even lead to breach of peace. On the basis of such order, the plaintiff
would contend that he is in possession and he is entitled to continue in possession;
and the defendant would contend that he is in possession and he is entitled to
continue in possession. In such a case, if the Court wants to direct status quo, it

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 should specify the context in which, or conditions subject to which, such status
quo direction is issued.

23. The petitioner in Probate C.P. No. 8 of 1998 [respondent herein] seeks letters of
administration in regard to alleged Will of Muni Narayanappa. That was
challenged and resisted by Anjanamma, wife of Muni-narayanappa, by
contending that she succeeded to the properties of Muni Narayanappa. She died
and appellant claims to be the legatee in possession of the property which is
claimed by the petitioner in Probate C.P. No. 8 of 1998, under the Will of Muni
Narayanappa. If the appellant is not permitted to come on record, there Will be no
one to continue the contest put up by Anjanamma. We therefore find that the
appellant is a necessary party to the proceedings in Probate C.P. No. 8 of 1998. 24.
The appeal is, therefore, allowed and the order dated 6-1-1999 on I.A. No. VIII is
Probate C.P. No. 8 of 1998 is set aside. I.A. No. VIII in Probate C.P. No. 8 of 1998
shall stand allowed. The respondent to pay a sum of Rs. 2,500.00 as costs to the
appellant.

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 The Jumma Masjid, Mercara vs Kodimaniandra Deviah
AIR 847, 1962 SCR Supl. (2) 554 1

1. This is an appeal against the Judgment of the High Court of Madras, dismissing
the suit filed by the appellant, as Muthavalli of the Jumma Masjid, Mercara for
possession of a half-share in the properties specified in the plaint. The facts are not
in dispute. There was a joint family consisting of three brothers, Santhappa,
Nanjundappa and Basappa. Of these, Santhappa died unmarried, Basappa died in
1901, leaving behind a widow Gangamma, and Najundappa died in 1907 leaving
him surviving his widow Ammakka, who succeeded to all the family properties
as his heir. On the death of Ammakka, which took place in 1910, the estate
devolved on Basappa, Mallappa and Santhappa, the sister's grandsons of
Nanjundappa as his next reversioners. The relationship of the parties is shown in
the following genealogical table. Basappa Santhappa (brother 1 d. unmarried)
Nanjundapa d.1907 -Ammakka d.1910 Basappa Mallammal -Gangamma d.1933
Ramegosda Mallegowda Basappa Mallappa Santhappa On August 5, 1900,
Nanjundappa and Basappa executed a usufructuary mortgage over the properties
which form the subject-matter of this litigation, and one Appanna Shetty, having
obtained an assignment thereof, filed a suit to enforce it, O.S. 9 of 1903, in the court
of the Subordinate Judge, Coorg. That ended in a compromise decree, which
provided that Appanna Shetty was to enjoy the usufruct from the hypotheca till
August, 1920, in full satisfaction of all his claims under the mortgage, and that the
properties were thereafter to revert to the family of the mortgagors. By a sale deed
dated November 18, 1920, Ex. III, the three reversioners, Basappa, Nallappa and
Santhappa, sold the suit properties to one Ganapathi, under whom the
respondents claim, for a consideration of Rs. 2,000. Therein the vendors recite that
the properties in question belonged to the joint family of Nanjundappa and his
brother Basappa, that on the death of Nanjundappa, Ammakka inherited them as
his widow, and on her death, they had devolved on them as the next reversioners
of the last male owner. On March 12, 1921, the vendors executed another deed, Ex.
IV, by which Ex. III was rectified by inclusion of certain items of properties, which
were stated to have been left out by oversight. It is on these documents that the
title of the respondents rests.

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 2. On the strength of these two deeds, Ganapathi sued to recover possession of the
properties comprised therein. The suit was contested by Gangamma, who claimed
that the properties in question were the self-acquisitions of her husband Basappa,
and that she, as his heir, was entitled to them. The Subordinate Judge of Coorg
who tried the suit accepted this contention, and his finding was affirmed by the
District Judge on appeal, and by the, Judicial Commissioner in second appeal. But
before the second appeal was finally disposed of, Gangamma died on February 17,
1933. Thereupon Ganapathi applied to the revenue authorities to transfer the patta
for the lands standing in the name of Gangamma to his own name, in accordance
with the sale deed Ex. III. The appellant intervened in these proceedings and
claimed that the Jumma Masjid, Mercara, had become entitled to the properties
held by Gangamma, firstly, under a Sadakah or gift alleged to have been made by
her on September 5, 1932, and, secondly, under a deed of release executed on
March 3, 1933, by Santhappa, one of the reversioners, relinquishing his half share
in the properties to the mosque for a consideration of Rs. 300. By an order dated
September 9, 1933, Ex. II, the revenue authorities declined to accept the title of the
appellant and directed that the name of Ganapathi should be entered as the owner
of the properties. Pursuant to this order, Ganapathi got into possession of the
properties.

3. The suit out of which the present appeal arises was instituted by the appellant
on January 2, 1945, for recovery of a half-share in the properties that had been held
by Gangamma and for mesne profits. In the plaint, the title of the appellant to the
properties is based both on the gift which Gangamma is alleged to have made on
September 5, 1932, and on the release deed executed by Santhappa, the
reversioner, on March 3, 1933. With reference to the title put forward by the
respondents on the basis of Ex. III and Ex. IV, the claim made in the plaint is that
as the vendors had only a spes succession is in the properties during the lifetime
of Gangamma, the transfer was void and conferred no title. The defence of the
respondents to the suit was that as Santhappa had sold the properties to Ganapathi
on a representation that he had become entitled to them as reversioner of
Nanjundappa, on the death of Ammakka in 1910, he was estopped from asserting
that they were in fact the self-acquisitions of Basappa, and that he had, in
consequence, no title at the dates of Ex. III and Ex. IV. The appellant, it was

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 contended, could, therefore, get no title as against them under the release deed Ex.
A, dated March 3, 1933.

4. The District Judge of Coorg who heard the action held that the alleged gift by
Gangamma on September 5, 1932, had not been established, and as this ground of
title was abandoned by the appellant in the High Court, no further notice will be
taken of it. Dealing next with the title claimed by the appellant under the release
deed, Ex. A executed by Santhappa, the District Judge held that as Ganapathi had
purchased the properties under Ex. III on the faith of the representation contained
therein that the vendors had become entitled to them on the death of Ammakka in
1910, he acquired a good title under s. 43 of the Transfer of Property Act, and that
Ex. A could not prevail as against it. He accordingly dismissed the suit. The
plaintiff took the matter in appeal to the High Court, Madras, and in view of the
conflict of authorities on the question in that Court, the case was refer red for the
decision of a Full Bench. The learned Judges who heard the reference agreed with
the court below that the purchaser under Ex. III had, in taking the sale, acted on
the representation as to title contained therein, and held that as the sale by the
vendors was of properties in which they claimed a present interest and not of a
mere right to succeed in future, s. 43 of the Transfer of Property Act applied, and
the sale became operative when the vendors acquired title to the properties on the
death of Gangamma on February 17, 1933. In the result, the appeal was dismissed.
The appellant then applied for leave to appeal to this Court under Art. 133(1)(c),
and the same was granted by the High Court of Mysore to which the matter had
become transferred under s. 4 of Act 72 of 1952. That is how the appeal comes
before us.

5. The sole point for determination in this appeal is, whether a transfer of property
for consideration made by a person who represents that he has a present and
transferable interest therein, while he possesses, in fact, only a spes successionis,
is within the protection of s. 43 of the Transfer of Property Act. If it is, then on the
facts found by the courts below, the title of the respondents under Ex. III and Ex.
IV must prevail over that of the appellant under Ex. A. If it is not, then the appellant
succeeds on the basis of Ex A. Section 43 of the Transfer of Property Act runs as
follows:- "Where a person fraudulently or erroneously represents that he is

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 authorised to transfer certain immovable property and professes to transfer such
property for consideration such transfer shall, at the option of the transferee,
operate on any interest which the transferor may acquire in such property at any
time during which the contact of transfer subsists. Nothing in this section shall
impair the right of transferees in good faith for consideration without notice of the
existence of the said option."

6. Considering the scope of the section on its terms, it clearly applies whenever a
person transfers property to which he has no title on a representation that he has
a present and transferable interes therein, and acting on that representation, the
transferee takes a transfer for consideration. When these conditions are satisfied,
the section enacts that if the transferor subsequently acquires the property, the
transferee becomes entitled to it, if the transfer has not meantime been thrown up
or cancelled and is subsisting. There is an exception in favour of transferees for
consideration in good faith and without notice of the rights under the prior
transfer. But apart from that, the section is absolute and unqualified in its
operation. It applies to all transfers which fulfil the conditions prescribed therein,
and it makes 1. O difference in its application, whether the defect of title in the
transferor arises by reason of his having no interest whatsoever in the property, or
of his interest therein being that of an expectant heir.

7. The contention on behalf of the appellant is that s. 43 must be read subject to s.

6 (a) of the Transfer of Property Act which enacts that, "The chance of an heir
apparent succeeding to an estate, the chance of a relation obtaining a legacy on the
death of a kinsman or any other mere possibility of a like nature, cannot be
transferred." The argument is that if s. 43 is to be interpreted as having application
to Cases of what are in fact transfers of spes successionis, that will have the effect
of nullifying s. 6 (a), and that therefore it would be proper to construe s. 43 as
limited to cases of transfers other than those falling within . G(a). In effect, this
argument involves importing into the section a new exception to the following
effect; "Nothing in this section shall operate to confer on the transferee any title, if
the transferor had at the date of the transfer an interest of the kind mentioned in s.
6 (a)." If we accede. to this contention we will not be construing s.43. but rewriting
it. "We are not entitled", observed Lord Loreburn L. C., in Vickers v. Evans (1), "to

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 read words into an Act of Parliament unless clear reason for it is to be found within
the four corners of the Act itself."

8. Now the compelling reason urged by the appellant for reading a further
exception in s. 43 is that if it is construed as applicable to transfers by persons who
have only spes successionis at the date of transfer, it would have the effect of
nullifying s. 6(a). But section 6(a) and s. 4 relate to two different, subjects, and there
is no necessary conflict between them; Section 6 (a) deals with certain kinds of
interests in property mentioned therein, and prohibits a transfer simpliciter of
those interests. Section 43 deals with representations as to title made by a
transferor who had no title at the time of transfer, and provides that the transfer
shall fasten itself on the title which the transferor subsequently acquires. Section 6
(a) enacts a rule of substantive law, while s. 43 enacts a rule of estoppel which is
one of evidence. The two provisions operate on different fields, and under
different conditions, and we see no ground for reading a conflict between them or
for outing down the ambit of the one by reference to the other. In our opinion, both
of them can he given full effect on their own terms, in their respective spheres. To
hold that transfers by persons who have only a spes successionis at the date of
transfer are not within the protection afforded by s. 43 would destroy its utility to
a large extent.
9. It is also contended that as under the law there can be no estoppel against a
statute transfers which are prohibited by s. (6a) could not be held to be protected
by s. 43. There would have been considerable force in this argument if the question
The fell to be decided solely on the terms of s. 6 (a). Rules of estoppel are not to be
resorted to for defeating or circumventing prohibitions enacted by Statutes on
grounds of public policy. But here the matter does not rest only on s. 6 (a). We have
in addition, s. 43, which enacts a special provision for the protection of transferees
for consideration from persons who represent that they have present title, which,
in fact, they have not. And the point for decision is simply whether on then facts
the respondents are entitled to the benefit of this section. If they are, as found by
the courts below, then the plea of estoppel raised by them on the terms of the
section is one pleaded under, and not against the statute, The appellant also sought
to rely on the decisions wherein it has been held that a plea of estoppel could not
be raised against a millor who had transferred property on a representation that

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 he was of age, and that s. 43 was inapplicable to such transfers, vide Sadiq Ali Khan
v. Jai Kishori Gadigeppa v. Balanagauda (2) Ajudhia Prasad v. Chandan Lal(3)But
the short answer to this contention is that s. 43 deals with transfers which fail
forwant of title in the transferor and not want of capacity in him at the time of
transfer. It may further be observed in this connection that the doctrine of estoppel
has been held to have no application to persons who have no contractual capacity
where the claim is based on contract, vide Mahomed Syedol Ariffin, v. Yeoh Oai
Gark (4); Levine v. Brougham (5), Leslie Ltd. s. Sheil); Khan Gul v. Lakha Singh
(7). Decisions on transfers by minors therefore are of no assistance in ascertaining
the true scope of s. 43.
10. So far we have discussed the question on the language of the section and on
the principles applicable thereto. There is an illustration appended.to s. 43, and we
have deferred consideration thereof to the last as there has been a controversy as
to how far it is admissible in construing the section. It is as follows:- "A, a Hindu,
who has separated from his father B, sells to C three fields, X, Y and Z, representing
that A is authorized to transfer the same. Of these fields Z does not belong to A, it
having been retained by B on the partition; but on B's dying A as heir obtains Z. C,
not having rescinded the contract of sale, may require A to deliver Z to him. In this
illustration, when A sold the field Z to C, he had only a spes successionis. But he
having subsequently inherited it, became entitled to it. This would appear to
conclude the question against the appellant. But it is argued that the illustration is
repugnant to the section and must be rejected. If the language of the section clearly
excluded from its purview transfers in which the transferor had only such interest
as is specified in s. 6(a), then it would undoubtedly not be legitimate to use the
illustration to enlarge it. But far from being restricted in its scope as contended for
by the appellant, the section is, in our view, general in its terms and of sufficient
amplitude to take in the class of transfers now in question. Its is not to be readily
assumed that all illustration to a section is repugnant to it and rejected. Reference
may, in this connection, be made to the following observations of the judicial
Committee in Mahomed Shedol Ariffin v. Yeoh Ooi Gark (1) as to the value to
given to illustrations appended to a section, in ascertaining its true scope: "It is the
duty of a court of law to accept, if that can be done, the illustrations given as being
both of relevance and value in the construction of the text. The illustrations should
in no case be rejected because they do not square with ideas possibly derived from

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 another system of jurisprudence as to the law with which they are the sections deal
And it would require a very special case to warrant their rejection on the ground
of their assumed repugnancy to the sections themselves. It would be the very last
resort of construction to make any such assumption. The great usefulness of the
illustrations, which have, although no part of the sections, been expressly
furnished by the Legislature as helpful in the working and application of the
statute, should not be thus impaired."

11. We shall now proceed to consider the more important cases wherein the
present question has been considered. One of the earliest of them is the decision
of the Madras High court in Alamanaya Kunigari Nabi Sab v. Murukuti Papiah
(1). That arose out of a suit to enforce a mortgage executed by the son over
properties belonging to the father while he was alive. The father died pending the
suit, and the properties devolved on the son as his heir. The point for decision was
whether the mortgagee could claim the protection of s. 43 of the Transfer of
Property Act. The argument against is was that "s. 43 could not be so construed as
to nullify s. 6(a) of the Transfer of Property Act, by validating a transfer initially
void under s 6(a)". In rejecting this contention, the Court observed:- "This
argument, however, neglects the distinction between purporting to transfer `the
chance of an heir-apparent,' and `erroneously representing that he (the transferor)
isauthorised to transfer certain immoveable property." It is the latter course that
was followed in the present case. It was represented to the transferee that the
transferor was in praesenti entitled to and thus authorise to transfer the property."
(p.736) On this reasoning if a transfer is statedly of an interest of the character
mentioned in s. 6(a), it would be void, whereas, if it purports to be of an interest
in praesenti, it is within the protection afforded by s. 43 Then we come to the
decision in The official Assignee, Madras v. Sampath Naidu, where a different
view was taken. The facts were that one v. Chetti had executed two mortgages over
properties in respect of which he had only spes successionis. Then he succeeded
to those properties as heir and then sold them to one Ananda Mohan. A mortgagee
claiming under Ananda Mohan filed a suit for a declaration that the two mortgages
created by Chetty before he had become entitled to them as heir, were void as
offending s. 6(a) of the Transfer of Property Act. The mortgagee contended that in
the events that had happened the mortgages had become enforceable under s. 43

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 of the Act. The Court negatived this contention and held that as the mortgages,
when executed, contravened s. 6(a), they could not become valid under s. 43.
Referring to the decision in Alamanaya Kunigari Nabi Sab v. Murkuti Papia, the
Court observed that no distinction could be drawn between a transfer of what is
on the face of it spes successionis, and what purports to be an interest in praesenti.
"If such a distinction were allowed", observed Bardswell, J., delivering the
Judgment of the Court, "the effect would be that by a clever description of the
property dealt with in a deed of transfer one would be allowed to conceal the real
nature of the transaction and evade a clear statutory prohibition." This reasoning
is open to the criticism that it ignores the principle underlying s. 43. That section
embodies, as already stated, a rule of estoppel and enacts that a person who makes
a representation shall not be heard to allege the contrary as against a person who
acts on that representation. It is immaterial whether the transferor acts bona fide
or fraudulently in making the representation. It is only material to find out
whether in fact the transferee has been misled. It is to be noted that when the
decision under consideration was given, the relevant word of s. 43 were, "where a
person erroneously represents", and now, amended by Act 20 of 1929, they are
"where a person fraudulently or erroneously represents", and that emphasises that
for the purpose of the section it matters not whether the transferor act fraudulently
or innocently in making the representation, and that what is material is that he did
made representation and the transferee has acted on it. Where the transferee knew
as a fact that the transferor did not possess the title which he represents he has,
then he cannot be said to have acted on it when taking a transfer. Section 43 would
then have no application, and the transfer will fail under s. 6(a). But where the
transferee does act on the representation, there is no reason why he should not
have the benefit of the equitable doctrine embodied in s. 43, however fraudulent
the act of the transferor might have been. The learned Judges were further of the
opinion that in view of the decision of the Privy Council inAnanda Mohan Roy v.
Gour Mohan Mullick (1) and the decision in Sri Jagannada Raju v. Sri Rajah
Prasada Rao (2), which was approved therein, the illustration to s. 43 must be
rejected as repugnant to it. In Sri Jagannada Raju's case, the question was whether
a contract entered into by certain presumptive reversioners to sell the estate which
was then held by a widow as heir could be specifically enforced, after the
succession had opened. It was held that as s. 6(a) forbade transfers of spes

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 successionis, contracts to make such transfers would be void under s. 23 of the
contract Act, and could not be enforced. This decision was approved by the Privy
Council in Ananda Mohan Roy v. Gour Mohan Mullick, where also the question
was whether a contract by the nearest reversioner to sell property which was in
the possession of a widow as heir was valid and enforceable, and it was held that
the prohibition under s. 6(a) would became futile, if agreements to transfer could
be enforced. These decisions have no bearing on the question now under
consideration, as to the right of a person who for consideration takes a transfer of
what is represented to be an interest in praesenti. The decision in The Official
Assinee, Madras v. Sampatha Naidu is, in our view, erroneous, and was rightly
over ruled in the decision now under appeal. Proceeding on to the decisions of the
other High Courts, the point under discussion arose directly for decision in Shyam
Narain v. Mangal Prasad . The facts were similar to those in The official Assignee,
Madras s. Sampath Naidu One Ram Narayan, who was the daughter's son of the
last male owner sold the properties in 1910 to the respondents, while they were
vested in the daughter Akashi. On her death in 1926, he succeeded to the
properties as heir and sold them in 1927 to the appellants. The appellants claimed
the estate on the ground that the sale in 1910 conferred no title on the respondents
as Ram Narayan had then only a spes successionis. The respondents contended
that they became entitled to the properties when Ram Narayan acquired them as
heir in 1926. The learned Judge, Sir S. M. Sulaiman, C. J., and Rachhpal, J., held,
agreeing with the decision in Alamanaya Kunigari, Nabi Sab v. Murukuti Papiah
(1), and deffering from The official Assignee, Madras v. Sampath Naidu (2),and
Bindeshwari Singh v. Har Narain Singh (3), that s.43 applied and that the
respondents, had acquired a good title. In coming to this, conclusion, they relied
on the illustration to s. 43 as, indicating its, true scope, and observed:- "Section 6
(a) would, therefore, apply to cases, where professedly there is, a transfer of a mere
spes successionis, the parties knowing that the transferor has, no more right than
that of a mere expectant heir. The result, of course, would be the same where the
parties, knowing the full facts, fraudulently clothe the transaction in the garb of a
an out and out sale of the property, and there is, no erroneous representation made
by the transferor to the transferor as, to his, ownership. "But where an erroneous,
representation is, made by the transferor to the transferee that he is, the full owner
of the property transferred and is authorized to transfer it and the property

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 transferred is not a mere chance of succession but immovable property itself, and
the transferee acts, upon such erroneous representation, then if the transferor
happens, later, before the contract of transfer comes, to an end, to acquire an
interest in that property, no matter whether by private purchase, gift, legacy or by
inheritance or otherwise, the previous transfer can at the option of the transferee
operate on the interest which has, been subsequently acquired, although it did not
exit at the time of the transfer." (pp. 478,479). This decision was followed by the
Bombay High Court in Vithabai v. Malhar Shankar (4) and by thePatna High Court
in Ram Japan v. Jagesara Kuer(1). A similar view had been taken by the Nagpur
High Court in Syed, Bismilla v. Manulal Chabildas(2). The preponderance of
judicial opinion is in favour of the view taken by the Madras High Court in
Alamanaya Kunigari Nabi Sab v. Murukuti Papiah (3), and approved by the Full
Bench in the decision now under appeal. In our judgment, the interpretation
placed on s. 43 in those decisions correct and the contrary opinion is erroneous.
We accordingly hold that when a person transfers property representing that he
has a present interest therein, whereas he has, in fact, only a spes successionis, the
transferee is entitled to the benefit of s. 43, if he has taken the transfer on the faith
of that representation and for consideration. In the present case, Santhappa, the
vendor in Ex. III, represented that he was entitled to the property in praesenti, and
it has been found that the purchaser entered into the transaction acting on that
representation. He therefore acquired title to the properties under s. 44 of the
Transfer of Property Act, when Santhappa became in titulo on the death of
Gangamma on February 17, 1933, and the subsequent dealing with them by
Santhappa by way of release under Ex. A did not operate to vest any title in the
appellant. The Courts below were right in upholding the title of the respondents,
and this appeal must be dismissed with costs of the third respondent, who alone
appears. Appeal dismissed.

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 Kartar Singh vs Harbans Kaur
1994 SCC (4) 730

1. The appellant is the defendant. Smt Harbans Kaur - respondent executed

the sale deed on 19 4-1961, in favour of the appellant of alienating the lands on
her behalf and on behalf of her minor son, Kulwant Singh. Kulwant Singh, on
attaining majority, filed Case No. 21 of 1975 on 14-3-1975 on the file of the Sub-
Judge, IInd Class, Gurdaspur for a declaration that the sale of his share in the
lands mentioned in the schedule attached thereto by his mother was void and
does not bind him. The decree ultimately was granted declaring that the sale
was void as against the minor. But before taking delivery of the possession,
Kulwant Singh died. Harbans Kaur, the mother being Class-1 heir under
Section 6 of the Hindu Succession Act, 1956 read with the schedule succeeded
to the estate of the deceased.
2. The appellant, therefore, laid his claim to the benefit of Section 43 of the
Transfer of Property Act, 1882 (for short 'the Act'). The High Court ill Second
Appeal No. 1557 of 1979, while setting aside the decree of the trial court and
declared that the sale is void, refused to grant the remedy under Section 43of
the Act. Thus, these appeals by special leave.

3.The contention for the appellant is that in view of the finding that Harbans
Kaur had succeeded by operation of law, the appellant is entitled to the interest
acquired by Harbans Kaur by operation of Section 43 of the Act and the High
Court has misapplied the ratio of decisions of this Court in Jumma Masjid,
Mercara v. Kodimaniandra Deviah and the decision of the AIR 1962 SC 847:
1962 Supp 2 SCR 554: (1962) 2 MLJ 90 (SC) Patna High Court in Jhulan Prasad
v. Ram Raj Prasad2. Section 43 of the Transfer of Property Act provides thus :
"Where a person fraudulently or erroneously represents that he is authorised
to transfer certain immovable property and professes to transfer such property
for consideration, such transfer shall, at the option of the transferee, operate on
any interest which the transferor may acquire in such property at any time
during which the contract of transfer subsists."
4. A reading clearly shows that for application of Section 43 of the Act, two
conditions must be satisfied. Firstly, that there is a fraudulent or erroneous

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 representation made by the transferor to the transferee that he is authorised to
transfer certain immovable property and in the purported exercise of authority,
professed to transfer such property for consideration. Subsequently, when it is
discovered that the transferor acquired an interest in the transferred property,
at the option of the transferee, he is entitled to get the restitution of interest in
property got by the transferor, provided the transferor acquires such interest
in the property during which contract of transfer must subsist.

5. In this case, admittedly, Kulwant Singh was a minor on the date when the
respondent transferred the property on 19- 4-1961. The marginal note of the
sale deed specifically mentions to the effect: "... that the land had been acquired
by her and by her minor son by exercising the right of pre-emption and that
she was executing the sale deed in respect of her own share and acting as
guardian of her minor son so far as his share was concerned."

6. It is settled law that the transferee must make all reasonable and diligent
enquiries regarding the capacity of the transferor and the necessity to alienate
the estate of the minor. On satisfying those requirements, he is to enter into and
have the sale deed from the guardian or manager of the estate of the minor.
Under the Guardian and Wards Act, the estate of the minor cannot be alienated
unless a specific permission in that behalf is obtained from the district court.
Admittedly, no such permission was obtained. Therefore, the sale of the half
share of the interest of Kulwant Singh made by his mother is void.

7. Section 43 feeds its estoppel. The rule of estoppel by deed by the transferor
would apply only when the transferee has been misled. The transferee must
know or put on notice that the transferor does not possesses the title which he
represents that he has. When note in the sale deed had put the appellant on
notice of limited right of the mother as guardian, as a reasonable prudent man
the appellant is expected to enquire whether on her own the mother as
guardian of minor son is competent to alienate the estate of the minor. When
such acts were not done the first limb of Section 43 is not satisfied. It is obvious
that it may be an erroneous representation and may not be fraudulent one
made by the mother that she is entitled to alienate 2 AIR 1979 Pat 54: 1978 BBCJ

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 736 the estate of the minor. For the purpose of Section 43 it is not strong
material for consideration. But on declaration that the sale is void, in the eye of
law the contract is non est to the extent of the share of the minor from its
inception. The second limb of Section 43 is that the contract must be a
subsisting one at the time of the claim. A void contract is no contract in the eye
of law and was never in existence so the sencond limb of Section 43 is not
satisfied. The ratio of this Court in Jumma Masjid case' is thus : "Section 43
embodies a rule of estoppel and enacts that a person who makes a
representation shall not be heard to allege the contrary as against a person who
acts on that representation. It is immaterial whether the transferor acts bona
fide or fraudulently in making the representation. It is only material to find out
whether in fact the transferee has been misled. For the purpose of the section,
it matters not whether the transferor acted fraudulently or innocently in
making the representation, and that what is material is that he did make a
representation and the transferee knows as a fact that the transferor does not
possess the title which he represents he has, then he cannot be said to have
acted on it when taking a transfer. Section 43 would then have no application
and the transfer will fail under Section 6(a)." This Court in the later part has
made it clear that where the transferee knows as a fact that the transferor does
not possess the title which he represents he has, then he cannot be said to have
acted on it when taking a transfer. Section 43 would then have no application
and the transfer will fail under Section 6(1) of the Transfer of Property Act. In
view of the finding that diligent and reasonable enquiries were made regarding
the entitlement of the mother to alienate the half share of the minor's estate, it
cannot be said that the appellant had acted reasonably in getting the transfer
in his favour.

8. In the face of the existence of the aforementioned note and in the light of
the law, it could be concluded that Section 43 does not apply to the fact of this
case, The ratio of the Patna High Court also does not apply to the facts in this
case as rightly distinguished by the High Court. It is made clear that the
declaration given by the High Court is only qua the right of the minor and it is
fairly conceded by the respondent that the decree does not have any effect on
the half share conveyed by the mother. If the appellant has any independent

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 cause of action subsisting under the contract against the respondent, this
judgment may not stand in his way to pursue the remedy under the law.

9. The appeals are accordingly dismissed. No costs.

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 R. Kempraj vs M/S. Barton Son & Co
1970 AIR 1872, 1970 SCR (2) 140

JUDGMENT: The Judgment of the Court was delivered by Grover, J.

1. This is an appeal by special leave from a judgment of the Mysore High Court in
which the question involved is whether an option given to a lessee to get the lease,
which is initially for a period of 10 years, renewed after every 10 years is hit by the
rule of perpetuity and is void. The respondent entered into a deed of lease on
October 26, 1951 with the appellant in respect of premises Nos. 8 & 9, Mahatma
Gandhi Road, (South Parade), Civil Station, Bangalore. It was stipulated that the
lease would be for a period of 10 years in the first instance with effect from
November 1, 1961 "with, an option to the lessee to renew the same as long as
desired as provided". Clauses 9 and 10 which are material may be reproduced:--
"9. The lessee shall have the right to renew the lease of the scheduled premises at
the end of the present period of ten years herein secured on the same rental of Rs.
450/- per month, for a similar period and for further similar periods thereafter on
the same terms and conditions as are set forth herein; and the Lessee shall be
permitted and shall have the right to remain in occupation of the premises on the
same terms and conditions for any further periods of ten years as long as they
desire to do so. 10. The Lessor shall not raise any objection whatsoever to the
Lessee exercising his option to renew the lease for any further periods of ten years
on the same terms and conditions as long as they desire to be in occupation,
provided that the Lessee shah not have the right to transfer the lease or alienate
any right thereunder. ' It appears that before the expiry of the period often years
from the date of the commencement of the lease the lessee wrote to the lessor
informing him of the intention to exercise the option given to the lessee under the
deed of lease to get the same renewed on the same terms and conditions as before
for a period of ten years from November 1, 1961. The lessor did not comply with
the request. After serving a notice the lessee filed a suit for specific performance of
the covenant in the lease for renewal. It was prayed that the lessorbe directed to
execute a registered deed to lease in favour of the lessee and if he failed to do so
the court should execute a deed in his favour. The lessor pleaded, inter alia, that
the condition relating to renewal was hit the rule against perpetuity. Certain other

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 pleas were taken with which we are not concerned. The trial court decreed the suit.
The first appellate court and the High Court affirmed the decree. The rule against
perpetuity is embodied in s. 14 of the Transfer of Property Act, hereinafter called
the Act. According to it no transfer of property can operate to create an interest
which is to take effect after the lifetime of one or more persons living at the date of
such transfer and the minority of some person who shall be in existence at the
expiration of that period and to whom, if he attains full age, the interest created is
to belong. It is well known that the rule against perpetuity is rounded on the
principle that the liberty of alienation "shall not be exercised to its own destruction
and that all contrivances shall be void which tend to create a perpetuity or place
property for ever out of the reach of the exercise of the power of alienation". The
words "transfer of property" have been defined by s. 5 of the Act to mean an act by
which a living person conveys property in present or in future to one or more other
living persons etc. The words "living persons" include a Company or association
or body of individuals. Section 105 of the Act defines "lease". A lease of immovable
property is a transfer of a right to enjoy such property made for a certain time
express or implied or in perpetuity in consideration of a price paid or promised or
of money, a share of crops, service or any other thing of value. A lease is not a mere
contract but it is a transfer of an interest in land and creates a right in rem. Owing
to the provisions of s. 105 a lease in perpetuity can be created but even then an
interest still remains in the lessor which is called a reversion.

2. It is not disputed on behalf of the appellant that a lease in perpetuity could have
been created but the lease in the present case was not of that kind and was for a
period of ten years only in the first instance. It is said that the mischief is created
by the clauses relating to renewal which are covenants that run with the land. It is
pointed out that on a correct construction of the renewal clauses the rule of
perpetuity contained in s. 14 would be immediately attracted. We are unable to
agree. Section 14 is applicable only where there is transfer of property. Even if
creation of a lease-hold interest is a transfer of a right in property and would fall
within the expression "transfer of property" the transfer was for a period of ten
years only by means of the indenture Exh. P-I. The stipulation relating to the
renewal could not be regarded as transferring property or any rights therein. In
Ganesh Sonar v. Purnendu Narayan Singha & Ors. (1962) Patna 201 in the case of

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 lease of land an option had been given to the lessor determine the lease and take
possession of the lease- hold land under specified conditions. The question was
whether such a covenant would fall within the rule laid down in the English case
Woodall v. Clifton (1905) 2. Ch. 257 in which it was held that a proviso in a lease
giving an option to the lessor to purchase the fee simple of the land at a certain
rate was invalid as infringing the rule against perpetuity. The Patna High Court
distinguished the English decision quite rightly on the ground that after the
counting into force of the Act a contract for the sale of immovable property did not
itself create an interest in such property as was the case under the English law.
According to the Patna decision the option given by the lessee to the lessor to
resume the lease hold land was merely a personal covenant and was not a covenant
which created an interest in land and so the rule against perpetuity contained in s.
14 of the Act was not applicable. The same principle would govern the present
case. The clauses containing the option to get the lease renewed on the expiry of
each term of ten years can by no means be regarded as creating an interest in
property of the nature that would fall within the ambit of s. 14. Even under the
English law the court would give effect to a covenant for perpetual renewal so long
as the invention is clear and it will not be open to objection on the ground of
perpetuity; see Halsbury's Laws of England, 3rd Edn. Vol. 23, p 627. In Muller v.
Traf Jword (1901) 1 Ch. 54.it was held that the covenant in a lease for renewal was
not strictly a covenant for renewal. But Farwell, J., proceeded to observe that a
covenant to renew had been held for at least two centuries to be a covenant
running with the land. If so, then no question of perpetuity would arise. It appears
that in England whatever might have been the reason, the objection of perpetuity
had never been taken to cases of covenants for renewal. The following
observations of Farwell, J., which were quoted with approval by Lord Evershed,
M.R. in Weg Motors Ltd. v. Hales & Others [1961] 3, A.E.L.R. 181,188 are note-
worthy: "But now I will assume that this is a covenant for renewal running with
the land; it is then in my opinion free from any taint of perpetuity because it is
annexed to the land. See Rogers v. Hosegood, (1900) 2 Ch. 388."

3. The equitable rule that the burden of a covenant runs with the land is to be
found in s. 40 of the Act. This section reads: "Where for the more beneficial
enjoyment of his own immoveable property, a third person, has, independently of

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 any interest in the immoveable property of another or of any easement thereon, a
right to restrain the enjoyment in a particular manner of the latter property, or
where a third person is entitled to the benefit of an obligation arising out of
contract, and annexed to the ownership of immoveable property, but not
amounting to an interest therein or easement thereon, such right or obligation may
be enforced against a transferee with notice thereof or a gratuitous transferee of
the property affected thereby, but not against a transferee for consideration and
without notice of the right or obligation nor against such property in his hands."

4. As pointed out in Mulla's Transfer of Property Act, 5th Edn. at page 194, s. 40
expressly says that the right of the covenantee not an interest in the land bound by
the covenant nor an easement. It is not an interest because the Act does not
recognise equitable estates and it cannot be said as Sir George Jessal said in London
& South Western Rly. v. Gomm [1882] 20 Ch. D. 562 that if a covenant "binds the
land it creates an equitable interest in the land." The expression "covenant runs
with the land" has been taken from the English law of real property. It is an
exception to the general rule that all covenants are personal. Even on the footing
that the clauses relating to renewal in the lease, in the present case, contain
covenants running with the land the rule against perpetuity contained in s. 14 of
the Act would not be applicable as no interest in property has been created of the
nature contemplated by that provision.

5. For the above reasons the appeal fails and it is dismissed with costs. Appeal
dismissed.

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 Jayaram Mudaliar v. Ayyaswami
AIR 1973 SC 569

1. The Judgment of A. N. RAY and M. H. BEG was delivered by BEG J. SIKRI C.J.
gave a separate Opinion. Beg, J. Jayaram Mudaliar, the Appellant before us by
Special Leave, purchased some lease hold land for Rs. 10,500/- from Munisami
Mudaliar and others under a sale deed of 7-7-1958 (Exhibit B-7) and some other
lands shown in a sales certificate dated 15-7-1960, (Exhibit B 51) sold to him for
Rs. 6,550/- at a public auction of immovable property held to realise the dues
in respect of loans taken by Munisami Mudaliar under the Land Improvement
Loans' Act 19 of 1883. Both Jayaram and Munisami, mentioned above, were
impleaded as co-defendants in a Partition suit, in Vellore, Madras, now before
us in appeal, commenced by a pauper application dated 23-6-1958 filed by the
plaintiff-respondent Ayyaswami Mudaliar so that the suit must be deemed to
have been, filed onthat date. The plaintiff respondent before us had challenged,
by an amendment of his plaint on 18-9-1961, the validity of the sales of land
mentioned above, consisting of items given in schedule 'B' to the plaint, on the
ground, inter-alia, that these sales, of joint property in suit, were struck by the
doctrine of lis pendens embodied in section 52 of the Indian Transfer of
Property Act. As this is the sole question, on merits, raised by the appellant
before us for consideration, we will only mention those facts which are relevant
for its decision.

2. Before, however, dealing with the above-mentioned question, a preliminary

objection to the hearing of this appeal may be disposed of. The Trial Court and
the Court of first appeal having held that the rule of lis pendens applied to the
sales mentioned above, the appellant purchaser had filed a second appeal in
the High Court of Madras, which was substantially dismissed by a learned
Judge of that Court, on 19-7-1968, after a modification of the decree. Leave to
file a Letters Patent appeal was not asked for in the manner required by Rule
28, Order IV of the Rules of Madras High Court, which runs as follows "28.
When an appeal against an appellate decree or order has been heard and
disposed of by a single Judge, any application for a certificate that the case is a

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 fit one for further appeal under clause 15 of the Letters Patent shall be made
orally and immediately after the judgment has been delivered."

3. But, the appellant, after obtaining certified copies of the judgment and decree
of the High Court, sent a letter to the Registry that the case be listed again for
obtaining, a certificate of fitness to file a Letters' Patent appeal. The case was,
therefore, listed before the learned Judge and an oral application which was
then made for grant of a certificate, was rejected on 6-9-1968 on the ground that
it had not been made at the proper time. It was contended, on behalf of the
respondent, that, in the circumstances stated above, the appellant must be
deemed to have been satisfied with the Judgment of the High Court as his
Counsel did not ask for leave to file a Letters' Patent appeal as required by
Order IV Rule 28 of the Rules of the Madras High Court (that is to say,
immediately after the judgment has been delivered). The following
observations of this Court in Penu Balakrishna Iyer & Ors. v. Sri Ariva M.
Ramaswami lyer & Ors. AIR 1932 Madras 566. were cited to contend that, the
appeal before us should be rejected in limine : (1) [1964] 7 S.C.R. 49 @ 52-53
.lm15 "Normally, an application for special leave against a second appellate
decision would not be granted unless the remedy of a Letters Patent Appeal
has been availd of. In fact, no appeal against second appellate decisions
appears to be contemplated by the Constitution .as is evident from the, fact that
Art. 133(3) expressly provides that normally an appeal will not lie to this Court
from the judgment, decree, or final order of one Judge of the High Court. It is
only where an application for special leave against a second appellate
judgment raises issues of law of general importance that the Court would grant
the application and proceed to deal with the merits of the contentions raised
by the appellant. But even in such cases, it is necessary that the remedy by way
of a Letters' Patent Appeal must resorted to before a party comes to this Court".

4. In reply to the preliminary objection, Mr. Chagla, appearing for appellant,

has assailed the validity of the above-mentioned Rule 28 of Order IV itself. It is
submitted that the rule conflicts with the provisions of clause 15 of the Letters'
Patent of the Madras High Court requiring only that the Judge who passed the
Judgment should declare that the case is fit one for appeal as a condition for

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 appealing. It was urged that the period of limitation for filing an appeal should
not, in effect, be cut down by a rule such as the one found in Rule 28, Order IV
of the Rules of Madras High Court. It was urged that, before article 117 of the
Limitation Actof 1963 introduced a period of thirty days from a decree or order
for filing a Letters Patent appeal, the period of limitation for such appeals fell
under the residuary article 181 of the old Limitation Act. As applications for
certification fen outside the provisions of the Civil Procedure Code and there
was no specific provision for them in the Limitation Act the High Court could
frame its own rule prescribing the mode and time for making such
applications. Rule 28 of Order IV of the Madras High Court does not purport
to affect the power to give the declaration contemplated by clause 15 of the
Letters' Patent,. In some High Courts, there is no rule of the Court laying down
that the application should be oral and made immediately after the judgment
has been delivered. It is, however, evident that a rule such as Rule 28 of Order
IV the Madras High Court is most useful and necessary particularly when a
period of thirty days only for filing an appeal has been prescribed in 1963. The
Judge pronouncing the judgment can decide then and there, in the presence of
parties or their counsel, whether the case calls for a certificate. In a suitable case,
where a party is able to prove that it was prevented due to some cause beyond
its control from asking for leave at the proper time, the Judge concerned may
condone non compliance by a party with Rule 28, Order IV, of the Madras High
Court, or extend time by applying Section 5 of the Limitation Act. This salutary
rule could not, therefore, be held to be ultra vires or invalid.

5. There is, however, another answer to the preliminary objec- tion. It was
contended that the case before us is covered by what was laid down by this
Court in Penu Balakrishna Iyer's case (Supra) when it said (at page 53) "..we do
not think it would be possible to lay down an unqualified rule that leave should
not be granted if the party has not moved for leave under the Letters Patent
and it cannot be so granted, nor is it possible to lay down an inflexible rule that
if in such a case leave has been granted it must always and necessarily be
revoked. Having regard to the wide scope of the powers conferred onthis Court
under Art. 136, it is not possible and, indeed, it would not be expedient, to lay
down any general rule which would govern all cases. The question as to

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 whether the jurisdiction of this Court under Art. 136 should be exercised or not,
and if yes, on what terms and conditions, is a matter which this Court has to
decide on the facts of each case".In that particular case, this Court had actually
heard and allowed the appeal by Special leave because it held that there was
no general inflexible rule that special leave should be refused where the
appellant has not exhausted- his rights by asking for a certificate of fitness of a
case and because that case called for interference. It is urged before us that the
appellant had done whatever he possibly could, in the circumstances of the
case, to apply for and obtain a certificate of fitness after going through the
judgment of the High Court, so that the rule that alternative modes of redress
should be exhausted before coming to this Court had been really complied
with. Each case must, we think, be decided upon its own facts. In the case
before us, although the appellant was not shown to have attempted any
explanation of failure to apply for the certificate at the proper time, yet, the
special leave petition having been granted, and the case having passed, without
objection, beyond the stage of interim orders and printing of the records, we
have heard arguments on merits, also. The merits may now be considered. The
challenge on the ground of lis pendens, which had been accepted by the Courts
in Madras, right up to the High Court, was directed against two kinds of sales
: firstly,% there was the ostensibly voluntary sale of 7-7-1958 under a sale deed
by the defendant Munisami Mudaliar and his major son Subramanian
Mudaliar and three minor sons Jagannathan, Duraisami alias Thanikachalam,
and Vijayarangam in favour of the defendant appellant; and, secondly, there
was the sale evidenced by the,. sale certificate (Exhibit B. 51) of 15-7-1960
showing that the auction sale was held in order to realise certain, "arrears under
hire purchase system due to Shri O. D. Munisami Mudaliar. The words "due
to" must in the context, be read as "due from"' because "falsa demostration non
nocet". The deed of the voluntary sale for Rs. 10,5001/- showed that Rs. 7375.11
Ans. were to be set off against the money due on a. decree obtained by the
purchaser against the sellers in original. suit 2/56 of the Vellore Sub-Court , Rs.
538.5 Ans. were left to liquidate the amount due for principal and interest due
to the purchaser on a bond dated 14-10 1957, by Munisami Mudaliar, Rs. 662.9
Ans. was to be set off to liquidate another amount due to the purchaser from
Munisami on account of the principal and, interest on another bond executed

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 by Munisami, Rs. 1250.0.0 was left to pay off and liquidate the balance of a debt
due to one Thiruvenkata Pillai from Munisami, Rs. 100.0.0 were meant to settle
a liability to the Government in respect of a purchase of cattle and for digging
of some well, Rs. 51.13 Ans. were to go, towards settling a similar liability, and
only Rs. 521.11 Ans. were paid in cash to the seller after deducting other
amounts for meeting liabilities most of which were shown as debts to the
purchaser himself. It may be mentioned here that, on 17-1-1944, Munisami had
executed a mortgage of some of the property in Schedule 'B' of the plaint for
Rs. 7,500/ in favour of Kannayiram, and he had executed a second mortgage in
respect of one item of property of Schedule 'B' in favour of Patta Mal, who had
assigned his rights to T. Pillai. A third mortgage of the first item of Schedule 'B'
properties was executed on 27-5- 1952 by Munisami, in favour of the appellant
Jayaram, was said to be necessitated by the need to pay arrears of Rs. 3,000/-
income tax and for discharging a debt and a promote in favour of a man called
Mudali. In 1955, an original suit No. 124/1955 had been filed by T. Pillai who
had obtained orders for the sale of the first item of Schedule 'B' properties
shown in the plaint. The original suit No. 2 of 1956 had been filed for principal
and interest due on 27-5- 1952 to the appellant who had obtained an attachment
on 5-1- 1956 of some schedule 'B' properties. The appellant had obtained a
preliminary decree on 25-1-1956 in his suit and a final decree on 14-9-1957. All
these events had taken Place before the institution of the partition suit on 23-6-
1968. But, the voluntary sale to satisfy decretal amounts was executed after this
date. The second sale was an involuntary sale for realisation of dues under the
provisions of section 7 of the Land Improvement Loans Act 19 of 1883 which
could be realised as arrears of land revenue. There was nothing in the sale
certificate to show that the due for which properties were sold were of anyone
other than Munisami individually.

6. On the facts stated above, the appellant Jayaram claims that both kinds of
sales were outside the purview of the doctrine of lis pendens inasmuch as both
the sales were for the discharge of preexisting liabilities of the Hindu joint
family of which Munisami was the karta. The liabilities incurred by Munisami,
it was submitted, as karta of the family, had to be met, in any case, out of the
properties which were the subject matter of the partition suit. It was urged that

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 where properties are liable to be sold for, pay- ment of such debts as have to be
discharged by the whole family, only those properties would be available for
partition in the pending suit which are left after taking away the properties
sold for meeting the pre-existing liabilities of the joint family. In the case of the
sale for discharging dues under the Land Improvement Loans Act it was also
contended that they obtained priority .,over other claims, and, for this
additional reason, fell outside, the scope of the principle of lis pendens.

7. The defendant-respondent Munisami and the defendant appellant Jayaram

had both pleaded that the properties in suit were acquired by Munisami with
his own funds obtained by separate business in partnership with a stranger
and that Ayyaswami, plaintiff, had no share in these properties. The plaintiff
respondent's case was that although the properties were joint, the liabilities
sought to be created and alienations made by Munisami were fraudulent and
not for any legal necessity, and, therefore, not binding on the family. The Trial
Court had found that the properties given in Schedule 'B' were joint family
properties of which the defendant respondent Munisami was the karta in
possession. This finding was affirmed by the first Appellate Courtand was not
touched in the High Court. It did not follow from this finding that all dealings
of Munisami with joint family properties, on the wrong assumption that he was
entitled to alienate them as owner and not as karta, would automatically
become binding on the joint family. A karta is only authorised to make
alienations on behalf of the whole family where these are supported by legal
necessity. It was no party's case that the alienations were made on behalf of,
and, therefore, were legally binding on the joint family of which plaintiff-
respondent Ayyaswami was a member., The Trial Court recorded a finding on
which the learned Counsel for the appellant relies strongly : "There is over-
whelming documentary and oral evidence to show that the sale deed Exhibit
B.7 and the revenue sale are all true and supported by consideration and that
the 12th Defendant would be entitled to them, if these sales were not affected
by the rule of lis pendens 'Within the meaning of Section 52 of the Transfer of
Property Act."

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 8. It may be mentioned here that the 12th Defendant is no other than, the
appellant Jayaram Mudaliar, the son-in-law of defendant respondent
Munisami Mudaliar, who had purchased the properties covered by both the
impugned sales. The plea of the plaintiff-respondent Ayyaswami that the sales
in favour of Jayaram, the 12th defendant-appellant, were fraudulent and
fictitious and the trial Court's decree for the partition included the, properties
covered by the two impugned sales evidenced by Ex. B.7 and B.5 1, yet, the
Commissioner who was to divide the properties by metes and bounds, was
directed to allot to Munisami's share, so far as possible, properties which were
covered by Exhibit B.7, and B.51. This implied that the liabilities created by the
decrees for whose satisfaction the sale deed dated 7-7-58 (Exhibit B-7) was
executed and the revenue sale of 16-3-1960 for loans under an agreement were
treated as the separate liabilities of the defendant Munisami and not those of
the joint family. The Trial Court as well as the First Appellate Court had also
rejected the plea that the revenue sale of 16-3-1960 to satisfy pre-existing
liabilities of Munisami had any priority over the rights of the plaintiff-
respondent may get in the partition suit. The result was that the partition suit
was decreed subject to a direction for the allotment of the Properties covered
by Exhibit B. 7 and B. 51 so that the purchaser may retain these properties if
they were allotted to Munisami.

9. The High Court of Madras had described the sale of 7-7-1958 as a "voluntary
alienation", and, thereby, placed it on a footing different from an involuntary
sale in execution of a decree in a mortgage suit. The obligations incurred before
the sale of 7-7-1958, by reason of the decrees in the mortgaged suits, were not
on this view, liabilities which could be equated with either transfers prior to
the institution of the partition suit or with sales in execution of mortgage
decrees which are involuntary. So far as the revenue sale was concerned, the
High Court, after setting out the terms of Section 7 of the Land Improvement
Loans Act 19 of 1883, held that only that land sold was to be excluded from the
purview of the principle of lis pendens for the improvement of which some
loan was taken. This meant that only that part of the loan was treated as a
liability of the joint family as could be said to be taken for the joint land. It,
therefore, modified the decrees of the Courts below by giving a direction that

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 further evidence should be taken before passing a final decree to show what
land could be thus excluded from partition. The plaintiff-appellant has relied
upon certain authorities laying down that the doctrine of lis pendens is not to
be extended to cover involuntary sales in execution of a decree in a mortgage
suit where the mortgage was, prior to the institution of the suit in which the
plea of lis pendens is taken, because the rights of the purchaser in execution of
a mortgage decree date back to the mortgage itself. They are: Chinnaswami
Paddayachi v. Darmalinga Paddyachi (1) Gulam Rasool Sahib v. Hamida Bibi
AIR 1950 Madras 189, Baldeo Das Bajoria & Ors. v. Sarojini Dasi & Ors., AIR
1929 Calcutta 697. Har Prashad Lal v. Dalmardan Singh ILR 32 Calcutta 891.
Reliance was also placed on the principle laid down in Sityam Lal & Anr. v.
Sohan Lal & Ors., AIR 1928 All. to contend that, since Section 52 of the Transfer
of Property Act does not protect transferors, a transfer on behalf of the whole
joint Hindu family would be outside the purview of the principle in a partition
suit. The contention advanced on the strength of the last mentioned case
erroneously assumes that the impugned sales were on behalf of the joint
family.

10. Learned Counsel for the plaintiff-respondent has, in reply, drawn our
attention to thefollowing observations of Sulaiman, Ag. C.J., expressing the
majority opinion in Ram Sanehi Lal & Anr. v. Janki Prasad & Ors. AIR 1931 All.
P. 466 @ 480. (FB): ". . . the language of S. 52 has been held to be applicable not
only to private transfers but also to Court sales held in execution of decrees. S.
2 (d) does not make S. 52 inapplicable to Ch.4, which deals with mortgages.
This is now well-settled : vide Radhama'dhub Holdar v. Manohar Mukerji
(1881) 15 Cal. 756=15 I.A. 97 and Moti Lal v. Kharrabuldin 1898, 25 Cal. 179=24
I.A. 170 followed in numerous cases out of which mention may be made of
Sukhadeo Prasad V. Jamna(1901) 23 All. 60=(1900) A.W.N. 199 ". But, as we
have no actual sale in execution of a mortgage decree, this question need not
be decided here. Another decision to which our attention was drawn was:
Maulabax v. Sardarmal & Anr. AIR 1952 Nag. 34. The suggestion made on
behalf of the appellant, that attach- ment of some schedule 'B' property before
judgment in the purchaser's mortgage suit could remove it from the ambit of
lis pendens, is quit,-, unacceptable. A contention of this kind was, repelled, in

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 K. M. Lal v. Ganeshi Ram, [1970] 2 S.C.R. 204 at 21 by this Court as clearly of
no avail against the embargo imposed by Section 52 of the Transfer of Property
Act.

11. The High Court had rightly distinguished cases cited on behalf of the
appellant before it by holding that exemption from the scope of As pendens
cannot be extended to voluntary sales in any case. Obviously, its view was that,
even where a voluntary sale takes place in order to satisfy the decretal amount
in a mortgage suit, the result of such a sale was not the same as that of an
involuntary sale in the course of execution proceedings where land is sold to
satisfy the decree on the strength of a mortgage which creates an interest in the
property mortgaged. The High Court had observed that, as regards the
satisfaction of the mortgage decree in his favour, which was part of the
consideration for the sale of 7-7-1958, the appellant purchaser decree holder
could get the benefit of Section 14 Limitation Act and still execute his decree if
it remained unsatisfied due to failure of consideration.

12. An examination of the sale deed of 7-7-1958 discloses that it is not confined
to the satisfaction of the decretal amounts. Other items are also found in it. The
sale deed does not purport to be on behalf of the Hindu joint family of which
Ayyaswami the plaintiff and Munisami Defendant No. 1 could be said to be
members. It no doubt mentions the sons of Munisami Mudaliar but not
Ayyaswami, plaintiff, among the sellers. At most, it could be a sale binding on
the shares of the sellers. As already indicated, Munisami, Defendant-
Respondent, as well as Jayaram Defendant- Appellant, having denied that the,
properties in dispute were joint, could not take up the position that the sales
were binding on the whole family. Therefore, we are unable to hold that the
assumption of the Madras High Court that the voluntary sale could not bind
the whole family, of which Munisami was the karta, was incorrect.

13. Learned Counsel for the appellant had also relied on Bishan Singh v.
Khazan Singh [1959] S.C.R. 878. That was a case in which, before the deposit of
money by the pre-emptors in a suit to enforce their rights to pre-emption, the
vendee had sold his rights to the appellant who had an equal right of pre-

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 emption. It was held there that the claim for pre-emption could be defeated by
such a device which fell outside the purview of the principle of lis pendens. We
think that this decision turns upon its own facts and on the nature of the right
of pre-emption which, as was observed there, is a weak right. This Court had
held that this weak right could be defeated by a sale which a vendee is
compelled to make for the purpose of defeating the 'night, provided the
purchaser's superior or equal right to Pre-emption had not been barred by
limitation. On the question considered there the view of the East Punjab High
Court in Wazir Ali Khan v. Zahir Ahmad Khan was preferred, to the view of
the Allahabad High Court in Kundan Lal v. Amar Singh, The observations
made by this Court with regard to the doctrine of lis pendens when a plaintiff
is enforcing a right of preemption must, we think, be confined to cases of sales
which could defeat preemptors claims. It has to be remembered that a technical
rule of the law of preemption is that the preemptor, to succeed in his suit, must
continue to possess the right to preempt until the decree for possession is
passed in his favour. As regards the revenue sale of 16 3-1960 (Exhibit 0.51) we
find that the, sale certificate is even less informative than the voluntary sale
deed considered above. Nevertheless, the view taken by: the Madras High
Court was that any land for to improvement of which loan is shown to have
been taken by Munisami Mudaliar would be excluded from the purview of the
doctrine of lis pendens. It is, however, urged that the High Court had given
effect to clause, (c) of Section 7 of the Land improvement Loans Act of 1883, but
had overlooked clause (a). Here, the relevant part of Section 7, sub-s. (1) of this
Apt may be, set out. It reads as follows, Recovery of loans.-(1) Subject to such
rules as may be made under Section 10, all loans granted under this Act, all
interest (if any) chargeable thereon, and 'Costs (if any) incurred in making the
same shall, when they become be' recoverable by the, Collector in all or any of
the following modes, name- (a) from the borrower-as if they were arrears of
land revenue due by him; (b) from his surety (if any) as if they were arrears of
land revenue due by him;, (c) out of the land for the benefit of which the loan
has been granted as if they were arrears of land revenue due in respect of that
land; (d) out of the property comprised in the collateral security (if any)-
according to the procedure for the realization of land revenue by the sale of
immovable property other than the land on which that revenue is due :

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 Provided that no proceeding in respect of any land under clause (c) shall affect
any interest in that land which existed before the date of the order granting the
loan, other than the interest of the borrower, and of mortgages of, or persons
having charges on, that interest (1) A.I.R. 1927 All. 664. and where the loan is'
granted under Section 4 with the consent of another person, the interest of that
person, and of mortgagees of, or persons having charges on, that
interest."Reliance was also placed on Sec. 42 of the Madras Revenue- Recovery
Act of 1864 which reads as follows: "All lands brought: to sale on account of
arrears of revenue shall be sold free of all incumbrances, and if any balance
shall remain after liquidating the arrears with interest and the expences of
attachment and sale and other costs due in respect to such arrears, it shall be
paid over to the defaulter unless such payment be' prohibited by the injunction
of a Court of competent jurisdiction."

14. It will be seen that the assumption that the dues could be realised as arrears
of land revenue would only apply to the interest of the borrower so far as clause
(7) (1) (a) ls concerned. The proviso enacts that even recoveries falling under
See. 7 ( 1 ) (c) do not affect prior interests of, persons other than the borrower
or of the party which consents to certain loans. In the case before us, the
borrower had himself taken up the case that the loan was taken individually
for the purpose of purchasing a pumping by him set installed on the land. It
did not, therefore, follow that this liability was incurred on behalf of the joint
family unless it amounted to an unprovement of the joint land. Every
transaction of Munisami or in respect of joint property in his possession could
not affect rights of other members. It was for this reason that Section 7 (a) was
not specifically applied by the High Court,. But, at the same time, the direction
that the properties sold should, so far as possible, be allotted to Munisami
meant that the purchaser could enforce his rights to them if they came to the
share of Munisami. The question of paramount claims or rights of the
Government for the realisation of its taxes or of dues which are equated with
taxes was also raised on behalf of the appellant on the strength of Builders
Supply Corporation v. The Union of India(1) In that case, the origin of the
paramount right of the State to realise taxes due, which could obtain priority
over other claims, was traced to the prerogatives of the British crown in India.

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 Apart of the fact that there is no claim by, the State before us, we may observe
that, where a statutory provision is relied upon for recovery of dues, the effect
of it must be confined to what the statute en-acts. Even under the English law,
the terms of the statute displace any claim based on prerogatives of the Crown
(1) [1965] 2 S.C.R. 289. vide Attorney Generalv. De Keyser's Royal hotel Ltd.
[1920] AC 508. And, in no case, can the, claim whatever its basis, justify. a sale
of that property which doesnot belong to the person against whom the claim
exists. As already observed a claim under Section 7(1) (a) of the Land
Improvement Loans Act of 1883 could only be made from the borrower. This
meat that, unless it was proved that Munisami, in taking a loan under the Act,
was acting as the, karta of the, joint Hindu family of which Ayyaswamy was a
member, recovery of arrears could only be made from Munisami's share in the,
1and. That this could be done was, in our opinion implied in the direction that
the properties sold should, so far as possible, be allotted to the share of
Munisami. As some argument has been advanced on the supposed
inapplicability of the general doctrine of lis pendem to the impugned sales, the
nature, the basis, and the, scope of this doctrine may be, considered here. It has
been pointed out, in Bennet "On lis pendens", that, even before Sir Francis
Bacon framed his ordinances in 1816 "'for the better and more regular
administration of justice in the chancery, to be daily observed" stating the
doctrine of lis pendens in the 12th ordinance, the doctrine was already
recognized and enforced by Common law Courts. Bacon's ordinance on the
Subject said : "No decree bindeth any that commeth in bona fide, by conveyance
from the, defendant before the bill exhibited, and is made no party, neither by
bill, nor the order; but, where he comes in pendente life, and, while the suit is
in full prosecution and without any colour of allowance or privity of the court,
there regularly the decree bindeth; but, if there were any intermissions of suit,
or the court made acquainted with the conveyance, the court is to give order
upon the special matter according to justice."

15. The doctrine, however, as would be evident from Bennet's work mentioned
above, is derived from the rules of jus gentium which became embodied in the
Roman Law where we find the maxim: "Rem dequa controversia prohibemur
in acrum dedicate" (a thing concerning which there is a controversy is

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 prohibited, during the suit from being alienated). Bell, in his commentaries on
the lows of Scotland Bell's Com. on laws of Scotland, p. 144. said that it was
grounded on the, maxim: "Pendente lite nibil innovandum". He observed "It is
a general rule which seems to have been recognized in all regular systems of
jurisprudence, that during the pendence of an action of which the object is to
vest the property or obtain the possession of real estate, a purchaser shall be
held to take that estate as it stands in the person of the seller, and to be bound
by the claims which shall ultimately be pronounced."

16. In the Corpus Juris Secundum (Vol. LIV-P. 570), we find the following
definition: "Lis pendens literally means a pending suit; and the doctrine of lis
pendens has been defined as the jurisdiction, power, or control which a court
acquires over property involved in suit, pending the continuance of the action,
and until final judgment therein." Expositions of the doctrine indicate that the
need for it arises from the very nature of the jurisdiction of Courts and their
control over the subject-matter of litigation so that parties litigating before it
may not remove any part of the subject-matter outside the power of the court
to deal with it and thus make the proceedings infructuous. It is useful to
remember this background of Section 52 of our Transfer of Property Act which
lays down: "During the pendency in any Court...... of any suit or proceeding
which is not collusive and in which any right to immovable property is directly
and specifically in question, the property cannot be transferred or otherwise
dealt with by any party to the suit or proceeding so as to affect the rights of any
other party thereto under any decree or order which may be made there,in,
except under the authority of the Court and on such terms as it may impose."

17. It is evident that the doctrine, as stated in Section 52, applies not merely to
actual transfers of rights which are subject-matter of litigation but to other
dealings with it "by any party to the suit or proceeding, so as to affect the right
of any other party thereto". Hence, it could be urged that where it is not a party
to the litigation but an outside agency, such as the tax Collecting authorities of
the Government, which proceeds against the subject--matter of litigation,
without anything done by a litigating party, the resulting transaction will not
be hit by Section 52. Again, where all the parties which could be affected by a

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 pending litigation are, themselves parties to a transfer or dealings with
property in such a way that they cannot resile from or disown the transaction
impugned before the Court dealing with the litigation, the Court may bind
them to their own acts. All these are matters which the Court could have
properly considered. The purpose of Section 52 of the Transfer of Property Act
is not to defeat any just and equitable claim but only to subject them to the
authority of the Court which is dealing with the property to, which claims are
put forward. In the case before us, the Courts had given directions to safeguard
such just and equitable claims as the purchaser appellant may have obtained
without trespassing on the rights of the plaintiff-respondent in the joint
Property involved in the partition suit before the Court. Hence, the doctrine of
lis pendens was correctly applied. For the reasons given above, there is no force
in this appeal which is dismissed with costs.

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 Supreme General Films Exchange ... v His Highness Maharaja Sir
1975 AIR 1810, 1976 SCR (1) 237

1. The judgment of the Court was delivered by BEG, J. The plaintiff-

respondent had filed a suit in the District Judge's Court at Jabalpur claiming a
declaration that a lease executed in favour of the Defendant-Appellant, M/s.
Supreme General Films Exchange Ltd., (hereinafter referred to as 'the Company'),
in respect of Strider Vilas Theater (now known as Plaza Talkies) by its former
owners. Jiwan Das Bhatia and his sons (hereinafter referred to as 'the Bhatias'), is
void and ineffective against the plaintiff's rights under decrees obtained in Civil
Suit No. 15A of 1954 dated 7-S-60 and in Civil Suit No. 3B of 1952 dated 20-4-1954
in execution of which the Theater had been attached. The plaintiff wanted the
declaration also to make it clear that an auction purchaser, purchasing the theater
in execution of either of the two decrees, gets rights free from any obligation
towards the Defendant-Appellant under the void lease. The former owners of the
theater, the Bhatias, had borrowed Rs. 2,50,000/- from the Plaintiff-Respondent, a
Maharaja, against the security of bales of cotton. On 29-12- 1951, they executed a
registered mortgage deed in respect of the Plaza Theater in favour of the plaintiff
as the price of pledged goods was insufficientto satisfy the dues. The plaintiff,
unable to recover the amount due, had brought Civil Suit No. 15A of 1954 in
which a compromise decree was passed on 7-5-1960, in terms of an agreement
between the parties that amounts clue will be realized by the sale of Plaza theater.

2. The Central Bank of India, another creditor of Bhatias, had brought Civil Suit
No. 3B of 1952 and obtained a decree for Rs. 1,24,000- on 29-4-]952. Rights under
this decree were assigned in favour of the plaintiff-respondent. The Plaza theater,
together with other properties of Bhatias, was attached on 4-5-1955 in the course
of execution of that decree. The appellant company claimed to be a lessee in
occupation of the theater where it had carried on the business of running a Cinema
under an unregistered lease obtained on 27-2-1940. The lease of 1940 had expired
on 10- 4-1946. The Company continued as a tenant holding over until the
impugned lease deed of 30-3-1956 was executed. If this was a valid lease, it would
have conferred upon the company the right to be a tenant of the property under

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 the lease for eight years, from 10-2-1956 to 10-2-1964, with an option for a renewal
until 10-2-1970. This lease was executed after the company had filed a suit No. 16A
of 1954) on 20-11-1954 for the specific performance of an agreement to lease
contained in a letter dated 19-7-1948. A compromise decree was passed on 24-3-
1956 in this suit also. the lease deed of 30-3 1956 purported to carry out the terms
of that compromise decree passed in a suit in which the plaintiff was not
impleaded at all. The plaintiff's case was that the lease of 30-3-1956 was void as it
was struck by three statutory provisions, namely, section 52 of the Transfer of
Property Act, Section 65A of the Transfer of Propertied Act, and Section 64 of the
Civil Procedure Code. The defendant-appellant company, in addition to denying
the alleged rights of the plaintiff to the benefits of these provisions, pleaded that a
Suit of the nature filed by the plaintiff did not lie at all as it fell outside the purview
of Section 42 of the Specific Relief Act, 1877, altogether.

3. The Trial Court and the High Court, after having over- ruled the pleas of the
defendant appellant, had decreed the plaintiff's suit. The defendant company
obtained special leave to appeal to this Court under Article of the Constitution
Learned Counsel for the appellant company tried to persuade us to A hold that
the plaintiff had neither a legal character nor any such present right in any
property for which a declaration could be granted under Section 42 of the Specific
Relief Act 1877 (re-enacted as Section 34 of the Specific Relief Act of 1963).
Furthermore, he contended that the defendant-company had never denied any of
the rights of the plaintiff. Finally, he submitted that, ill any case, no declaration at
all was needed by the plaintiff if the lease of 1956, executed by the former owners
of the theater in favour of the defendant appellant, was void

4. The contention that the case fell outside the purview of Section 52 of the Transfer
of Property Act as the lease was executed in purported satisfaction of an
antecedent claim rests upon the terms of an agreement of 1948, embodied in a
letter, on the strength of which the defendant- appellant had filed his suit for
specific performance. We find that the terms of the compromise decree in that suit
and lease-deed of 1956 purported to confer upon the defendant-appellant new
rights. Indeed, there are good grounds for suspecting that the compromise in the
suit for specific performance was adopted as a device to get round legal difficulties

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 in the execution of the lease of 1956 in favour of the defendant-company. We are
unable to accept the argument, sought to be supported by the citation of Bishan
Singh & Ors. v. Khazan Singh & Anr [AIR 1958 SC838] that the lease was merely
an enforcement of an antecedent or pre-existing right. We think that it purported
to create entirely new rights pendent lite. It was, therefore, struck by the doctrine
of lis pendens, as explained by this Court in Jayaram Mudaliar v. Ayyaswami &
Ors.[AIR 1973 SC569], embodied in Section 52 of the Transfer of Property Act.

5. An alternative argument of the appellant was that a case falling within Section
65A(2)(e) of the Transfer of Property Act, confining the duration of a lease by a
mortgagor to three years, being a special provision, displaces the provisions of
Section 52 of the Transfer of Property Act. This argument overlooks the special
objects of the doctrine of lis pendens which applies to a case in which litigation,
relating to property in which rights are sought to be created pendente lite by acts
of parties, is pending. Moreover, for the purposes of this argument, the defendant-
appellant assumes that the provisions of Section 65A(2)(e) Transfer of Property Act
are applicable. If that was so, it would make no substantial difference to the rights
of the defendant-appellant which would vanish before the suit was filed if Section
65A applies We, however, think that, as the special doctrine of lis pendens is
applicable here, the purported lease of 1956 was invalid from the outset. In this
view of the matter, it is not necessary to consider the applicability of Section 65A(2)
(e), which the defendant- appellant denies, to the facts of this case.

6. As regards the applicability of Section 64, Civil Procedure Code, we find that
parties disagree on the question whether the attachment made by the Central Bank
on 20-4-1955, in execution of the decree of which the plaintiff-respondent was the
assignee, existed on the date the impugned lease of 30-3-1956. Learned Counsel
for the appellate relied upon the terms of an order recorded on the order sheet, in
the Court of Additional District Judge, Jabalpur, in Civil Suit No. 3B of 1952, on
25-1-1956, showing that, in view of the stay order received from the High Court,
execution could not proceed. The order sheet, however, also contains the
enigmatic statement that execution was dismissed as infructuous but the
attachment was to continue for six months. The High Court had treated the last
part of the statement in the order sheet as void and ineffective presumably on the

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 ground that the Additional District Judge had no jurisdiction either to lift the
attachment or to dismiss the execution proceedings after the High Court had given
its order staying all further action in execution proceedings. The terms of the High
Court's order are not evident from anything placed before us. On the other hand,
learned Counsel for the plaintiff-respondent relies upon a subsequent order of the
same Court, passed on 30-4- 1960, in the same suit. This order shows that a
compromise had been arrived at between the decree holder and the judgment
debtor under which the decree holder had agreed to lift attachment of property
except with regard to Plaza Talkies which was to continue. We are, therefore,
unable to hold that the concurrent findings of the Trial Court and the High Court,
that the Plaza Talkie was attached in execution of decree in suit No. 3B of 1952 on
4-5-1955 and that this attachment was in existence when the impugned lease was
executed on 30-3-1956, are erroneous. On these findings, the lease of 1956 was
certainly struck by the provisions of Section 64 Civil procedure Code also. Section
64, Civil Procedure Code, in fact, constitutes an application of the doctrine of lis
pendence in the circumstance specified there. For the reasons given above, we
dismiss this appeal with costs.

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 D.S. Parvathamma vs A. Srinivasan
(2003) 4 SCC 705
JUDGMENT: R.C. Lahoti, J. The suit premises forming part of the building
No.25, 5th Cross, Annamma Temple Extension, Ramakrishnapuram, Bangalore,
measuring 8x20 sq. ft. are the subject matter of these proceedings initiated under
the provisions of the Karnataka Rent Control Act, 1961, (hereinafter 'the Act', for
short) by the respondent claiming himself to be owner-landlord and seeking
eviction of the appellant alleging him to be tenant in the suit premises. Eviction
has been ordered under Clauses (a) and (h) of sub-Section (1) of Section 21 of the
Act by the Rent Controller and upheld by the High Court in exercise of revisional
jurisdiction under Section 50(1) of the Act. The singular issue surviving for
decision at this stage and around which the learned counsel for the parties have
centered their submissions is: whether the appellant is entitled to protect his
possession under Section 53A of the Transfer of Property Act, 1882 and hence not
liable to suffer eviction based on landlord-tenant relationship which has ceased to
exist on account of subsequent events.

1. The plea arises for determination in the background of the facts briefly stated
hereinafter. The suit premises were initially owned by one N. Shamanna. The
appellant was inducted in the suit premises as a tenant w.e.f. 1.11.1967.
According to the appellant, he entered into an agreement to purchase the suit
property from the original owner in the year 1970, whereafter he has been
holding the suit premises as a prospective vendor and in part performance of
agreement to purchase the property, which relationship has superseded the
erstwhile tenancy relationship and altered the nature and character of
appellant's possession over the suit premises from that of tenant to that of a
purchaser in possession in part performance of agreement to sell the property
within the meaning of Section 53A of T.P. Act. The factum of there being any
agreement to sell the property entered into by the original landlord with the
appellant has been denied and has been a subject matter of controversy in these
proceedings. What is not disputed is that under a deed of sale dated 18.4.1983
the original owner N. Shamanna and his wife Smt. Nanjamma have transferred
their right, title and interest in the property, including the suit premises, to the

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 respondent herein. These proceedings were initiated by the respondent herein
after serving a notice on the appellant.

2. The controversy centering around the principal issue arising for decision in this
appeal stands mellowed down to the extent of the findings arrived at in the
judgment dated 1.9.1999 passed by VII Addl. City Civil Judge, Bangalore. It
was a suit instituted by the appellant herein against N. Shamanna the original
owner, Nanjamma wife of the original owner and A. Sreenivasan, the present
owner and the respondent herein (respectively impleaded as defendant nos. 1,
2 and 3 in the suit) seeking specific performance of the alleged agreement to
sell of the year 1970 in his favour. The respondent herein was impleaded as
subsequent transferee. The Trial Court held that though there was an
agreement to sell in favour of the appellant, however, the suit filed by him was
barred by limitation and also suffered from gross delay and laches. The
respondent was held to be a transferee without notice of agreement in favour
of the appellant, having purchased the property bona fide and for
consideration. It was held that the appellant was not entitled to a decree of
specific performance of the agreement to sell in his favour nor, looking to his
conduct, was he entitled to the alternative relief of refund of consideration with
or without damages. One of the findings arrived at is that in spite of the alleged
agreement to sell of the year 1970, the appellant had not disowned his character
as tenant in the suit premises. There is no finding arrived at in the judgment
that the appellant was in possession of the suit premises in part performance
of the agreement of the year 1970. The suit was held liable to be dismissed and
was dismissed. The judgment and decree have achieved a finality as the
appellant herein did not pursue the matter further.

3. Section 53A of the Transfer of Property Act reads as under:- "53A. Part
Performance. 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, or the transferee, being already
in possession, continues in possession in part performance of the contract and

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 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 where there is an instrument of transfer, that the transfer
has not been completed in the manner prescribed therefore by the law for the
time being in force, 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: Provided that nothing in this section shall affect the rights of a
transferee for consideration who has no notice of the contract or of the part
performance thereof."

4. The essential features of the equitable doctrine of part performance as

statutorily modified and incorporated in Section 53A abovesaid, to the extent
relevant for the purposes of this case, are: (i) that the transferee has, in part
performance of the contract, taken possession of the property or any part
thereof, or the transferee, being already in possession, continues in possession
in part performance of the contract and has done some act in furtherance of the
contract, (ii) that the transferee has performed or is willing to perform his part
of the contract, and (iii) that the plea of part performance is not available to be
raised against a transferee for consideration who has no notice of the contract
or of the part performance thereof.

5. In G.H.C. Ariff Vs. Jadunath Majumdar Bahadur, AIR 1931 PC 79, their
Lordships held that a prospective vendee already in possession of the property
as lessee since before having allowed his right to enforce his contract to become
barred can resist the claim to possession by seeking to establish a title, the
acquisition of which is forbidden by the statute he being a lessee. Though
Ariff's case deals with English equitable doctrine and not with Section 53A of
the Transfer of Property Act, 1882 yet the basic principle remains the same. The
transferee must have performed or be willing to perform his part of the
contract. If a suit for specific performance of the contract filed by the transferee
has been dismissed on merits and his disentitlement to seek enforcement of the
contract has been adjudicated upon by a judicial verdict it cannot be said that

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 the transferee has performed or is willing to perform his part of the contract. It
would be a contradiction in terms. On the suit for specific performance of
contract having been dismissed, such a plea is not available to raise.

6. There are reasons more than one why the appellant cannot be permitted to
raise the plea of part performance and seek shelter thereunder. The civil suit
which was filed by the appellant was initially filed in the year 1989 as a suit for
injunction seeking to protect his possession. After about four years from the
date of institution of the suit the relief of specific performance was also added
by way of amendments in the year 1993. On 1.9.1999, the suit was dismissed in
its entirety. Not only was the plaintiff's claim for specific performance and
monetary relief in the alternative denied, but even the relief of injunction was
not allowed to him. Secondly, the appellant has failed to allege and prove that
he was delivered possession in part performance of the contract or he, being
already in possession as lessee, continued in possession in part performance of
the agreement to purchase, i.e. by mutual agreement between the parties his
possession as lessee ceased and commenced as that of a transferee under the
contract. On the contrary, there is a finding recorded in the earlier suit that in
spite of his having entered into a contract to purchase the property he had not
disowned his character as lessee and he was treated as such by the parties. The
judgment dated 1.9.1999 in the Civil Suit notes the conduct of the plaintiff
inconsistent with his conduct as vendee in possession. When a person already
in possession of the property in some other capacity enters into a contract to
purchase the property, to confer the benefit of protecting possession under the
plea of part performance his act effective from that day must be consistent with
the contract alleged and also such as cannot be referred to the preceding title.
The High Court of Madhya Pradesh had an occasion to deal with the facts very
near to the facts before us in Bhagwandas Parsadilal Vs. Surajmal & Anr., AIR
1961 M.P. 237. A tenant in possession entered into an agreement to purchase
the house forming subject matter of tenancy. However, he failed to show his
nature of possession having altered from that of a tenant into that of a
transferee. In a suit of ejectment based on landlord-tenant relationship, the
tenant sought to protect his possession by raising the plea of part performance
as against subsequent purchaser of the property. Referring to Section 91 of

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 Indian Trust Act, the High Court held that a subsequent purchaser of the
property with notice of an existing contract affecting that property must hold
the property for the benefit of the person in whose favour the prior agreement
to sell has been executed to the extent it is necessary to give effect to that
contract. But that does not mean that till a final decision has been reached the
contract creates a right in the person in possession, i.e. the tenant, to refuse to
surrender possession of the premises even if such possession was obtained by
him not in part performance of the contract but in his capacity as a tenant.
Having entered into possession as a tenant and having continued to remain in
possession in that capacity he cannot be heard to say that by reason of the
agreement to sell his possession was no longer that of a tenant. (Also see
Dakshinamurthi Mudaliar (Dead) & Ors. Vs. Dhanakoti Ammal, AIR 1925
Madras 965 and A.M.A. Sultan (deceased by LRs) & Ors. Vs. Seydu Zohra
Beevi, AIR 1990 Kerala 186. In our opinion the law has been correctly stated by
the High Court of Madhya Pradesh in the abovesaid decision. Thirdly, as
already stated hereinabove, in view of his suit for specific performance having
been dismissed, it cannot be said that he had performed or was willing to
perform his part of contract.

7. Lastly, as held in the civil suit, the respondent is a transferee for

consideration who has no notice of the contract or of the part performance
thereof in favour of the appellant. In Sardar Govindrao Mahadik & Anr. Vs.
Devi Sahai & Ors., AIR 1982 SC 989, this Court has held that there is a
understandably and noteworthy difference in the probative value of entering
into possession for first time and continuing in possession with a claim of
change in character. Where a person claiming benefit of part performance of a
contract was already in possession prior to the contract, the Court would expect
something independent of the mere retention of possession to evidence part
performance and some act done in furtherance of the contract and some act
done in furtherance of the contract.

8. Strong reliance was placed by the learned senior counsel for the appellant on
a recent decision of this Court in Shrimant Shamrao Suryavanshi & Anr. Vs.
Pralhad Bhairoba Suryavanshi (Dead) by Lrs. & Ors., (2002) 3 SCC 676, wherein

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 this Court has held that a person obtaining possession of the property in part
performance of an agreement of sale, can defend his possession in a suit for
recovery of possession filed by the transferor or by subsequent transferee of the
property claiming under him, even if a suit for specific performance of the
agreement of sale has become barred by limitation. (emphasis supplied)
Clearly it was a case where the person in possession was so inducted in part
performance of the agreement of sale. Excepting that his suit had gone barred
by limitation there was nothing else to deny the benefit of the plea to the person
in possession. The court proceeded on the reasoning that the law of limitation
barred the remedy but did not bar the defence. The distinguishing features of
that case are that: (i) it was admitted that the transferee had taken possession
over the property in part performance of the contract, (ii) that the transferee
had not brought any suit for specific performance of the agreement to sell, and
(iii) the transferee was always and still ready and willing to perform his part of
the contract. These three significant factual features are missing in the case
before us and therefore the appellant's effort to find support from the authority
of Shrimant Shamrao Suryavanshi's case (supra) must fail. Bar of limitation
alone does not bar the plea of part performance being raised if all other
requisites of Section 53A of T.P. Act are available.

9. Though, the learned counsel for the appellant contended that there is no
registered sale deed in favour of the respondent and therefore he cannot be
held to be a transferee having acquired ownership rights in the property, such
a plea cannot be permitted to be raised at this stage. The fact that the
respondent is a transferee under registered deed of sale having acquired
ownership in the property was not disputed upto the High Court. At no point
of time the appellant ever requested for the original sale deed being brought
on record before the Court. A new plea which is essentially a plea of fact cannot
be allowed to be urged for the first time at the hearing of appeal under Article
136 of the Constitution before this Court, more so when it is contrary to the
stand taken by the appellant himself in the High Court and the Court below.
For the foregoing reasons the appeal is held liable to be dismissed and is
dismissed accordingly. The decision of the Rent Controller, as upheld by the
High Court, is maintained.

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 Sunil Kr. Sarkar (Deceased By ... vs Aghor Kr. Basu
AIR 1989 Gau 39

Manisana, J. 1. This appeal arises from the judgment and decree passed by the
learned Assistant District Judge Goalpara in Title Appeal No. 99 of 1978 affirming
the judgment and decree passed by the learned Munsiff (I), Dhubri in Title Suit
No. 120 of 1975 decreeing the suit for ejectment or eviction of the defendant from
the suit premises.

2. The plaintiff brought the suit stating that the defendant, on 8-12-1964, took lease
of the suit premises at a monthly rent of Rs. 200/-. But the defendant defaulted in
payment of rents for the suit premises from the month of February 1967. The
defendant has also sublet a portion of the suit premises. The plaintiff demanded
rents and possession of the suit premises, but the defendant failed to pay rent and
to vacate the suit premises. The defendant contested the suit. The case of the
defendant was that he took a loan of Rs. 4,100/- from the plaintiff by mortgaging
the suit premises. The defendant was allowed to possess the suit premises as
before on his own right. But a deed of sale, dated 5-12-64, registered on 8-12-64
was obtained by the plaintiff from the defendant for Rs. 8,200/-. A deed of re-
conveyance dated 7-12-64 (Ext.-4) registered on 8-12-64 was executed by the
plaintiff for the re-sale of the suit premises at Rs. 8,200/- stating that if the
defendant pays the sum of Rs. 8,200/- on or before 7-12-75, the suit premises would
be re conveyed. There was also another agreement dated 7-12-65(64) (Ext.-5) for
re-payment of loan of Rs. 4,.100/-at a monthly instalment of Rs. 200/-. The further
case of the defendant was that the sale deed (Ext.-3) was fraudulent and collusive;
and the plaintiff had acquired no right, title and interest in the suit premises. The
defendant has already paid the money and therefore is not entitled to be evicted.

3. The Courts below have held that the sale deed (Ext.-3) was out and out sale; and
that the defendant was the tenant of the plaintiff on the basis of the lease deed (Ext-
5); and that the defendant did not pay the sum mentioned in the deed of re-
conveyance (Ext.-4).

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 4. Mr. B. K. Goswami, the learned Counsel for the appellant, has submitted that
the three documents, namely, the sale deed (Ext.-3), the re-conveyance deed (Ext.-
4) and the lease deed (Ext.-5) if read together, the transaction was a mortgage and
not a sale. Mr. Goswami has referred me to the decisions of the Supreme Court as
reported in Bhaskar v. Srinarayan, AIR 1960 SC 301 and P. L. Bapuswami v. N.
Pattay, AIR 1966 SC 902 to support his contention.

5. Mr. Banerjee, the learned counsel for the respondents, has submitted that under
Section 58 of the T.P. Act, the defendant is debarred from taking the plea that the
transaction was a mortgage.

6. The question which arises for consideration is whether the transaction was a
mortgage by conditional sale. Sale deed, Ext. 3, was executed on 5-12-64. But it was
registered on 8-12-64. On 7-12-64 a deed of re-conveyance (Ext.-4) was executed by
the plaintiff in favour of the defendant. The deed of re-conveyance was also
registered on 8-12-64. Under the deed of re conveyance, the right of re-purchase
was to be exercised within one year from the date of the agreement. On 7-12-64
another lease deed was also executed by the defendant in favour of the plaintiff
agreeing to pay rent @ Rs. 200/- p.m. for occupation of the suit premises.

7. By Section 58(c) of the T.P. Act, a mortgage by a conditional sale is defined as

follows: " Mortgage by conditional sale : Where the mortgagor ostensibly sells the
mortgaged property- On condition that on default of payment of the mortgage-
money on a certain date the sale shall become absolute, or On condition that on
such payment being made the buyer shall transfer the property to the seller, the
transaction is called a mortgage by conditional sale;Provided that no such
transaction shall be deemed to be a mortgage, unless the condition is embodied in
the document which effects or purports to effect the sale." Proviso to Section 58(c)
envisages that the condition effecting or purporting to effect the sale a mortgage
transaction must be incorporated in one and the same deed. In the present case,
there were three separate deeds as already stated. The condition effecting or
purporting to effect the sale as a mortgage has not been embodied in the sale deed
(Ext-3). Therefore, under Section 58(c) the defendant is debarred from saying that

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 the transaction was in the nature of mortgage or a mortgage by conditional sale.
In a similar case, the Supreme Court, in K. Simrathmull v. Nanjalingiah, AIR 1963
SC 1182, has held: 310 "It is unfortunate, having regard to the provision of Section
58(c) of the Transfer of Property Act, that the plaintiff is debarred from proving
that the transaction was in the nature of a mortgage." In the case before the
Supreme Court, there were three deeds executed on the same day as parts of same
transaction. They were : (i) a sale deed conveying to the defendant the suit land
and house, (ii) a deed of re-conveyance in favour of the plaintiff providing that if
the plaintiff could pay Rs. 1,500/- within 2 years, the defendant would execute a
sale deed of transferring the land and house, and (iii) a rent-note by the plaintiff in
favour of the defendant agreeing to pay rent at the rate of Rs. 26.25 per month for
the occupation of the house and the land. Therefore, the decision of the Supreme
Court is squarely applicable to the present case. In view of the above discussion,
the transaction was not a mortgage. The decisions of the Supreme Court in
Bhaskar(AIR 1960 SC 301) (supra) and P. L Bapuswami (AIR 1966 SC 902) (supra)
referred to me by Mr. Goswami are not applicable to the present case for the reason
that in those cases before the Supreme Court, condition effecting or purporting to
effect the sale as a mortgage was stipulated in the sale deed itself, but in the present
case there were three separate deeds. In this view of the matter, the contention of
Mr. Goswami must fail.

8. Mr. Goswami, the learned counsel for the appellant, has submitted that the
defendant is protected by or under Section 53A of the T. P. Act. Mr. Banerjee, the
learned counsel for the respondents, has submitted that this plea was not taken
before the Courts below, therefore, the plea of protection under Section 53A cannot
be raised in the Second Appeal. In any event, the defendant is not protected by or
under Section 53A. Be that as it may, the Courts below have concurrently given
findings that the defendant was a tenant of the plaintiff.

9. The question then is, -- Whether a tenant continuing in possession after a

contract to transfer written and signed by the landlord is protected by or under
Section 53A? The pre requisites for invoking the equitable doctrine of part
performance are : (a) that there must be a contract to transfer for consideration
immovable property in writing signed by the person sought to be bound by it and

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 from which the terms necessary to constitute the transfer can be ascertained with
reasonable certainty; (b) that it must be shown that the transferee has, in part-
performance of the contract, either taken possession of the property or any part
thereof, or the transferee being, already in possession, continues in possession and
has done some act in furtherance of the contract; and (c) that the transferee has
performed or is willing to perform his part of the contract.

10. If the tenant was already in possession of the property at the time of contract,
what has to be decided is whether he continues in possession in part-performance
of the contract. Therefore, mere continuance in possession does not satisfy the
requirements under Section 53A. Where the tenant is already in possession of the
property as a tenant and continues in possession in his capacity as a tenant after
the contract it does not necessarily follow that be continues dispossession in part-
performance of the contract. It is for the reason that a tenant is estopped from
questioning the title of the landlord under Section 116 of the Evidence Act.
Therefore, the tenant must show either from the contract or some other material
or evidence that he continued to possess the properly not in the capacity as a
tenant, for example, he does not pay the rents under one of the terms of contract
to sale in order to show that his possession is not in the capacity as a tenant, but in
part-performance of the contract. In addition to it, the tenant has to show that he
has done some act in furtherance of the contract, such as payment of necessary
taxes to show that lie was liable to pay the taxes a his possession was no longer as
that of a tenant. Therefore, if a tenant has been in possession in his capacity as a
tenant and not in part-performance of the contract, he cannot take the plea of
protection under Section 53A.

11. In the present case, although there is a registered written contract (Ext.-4),
there is no material to show that the defendant-tenant was possessing the suit
premises in part-performance of the contract. The Courts below have also held that
he had been possessing the suit premises in the capacity as tenant under the deed
of lease (Ext-5) and not in part-performance of the contract. Therefore, the
defendant is not qualified for the protection under Section 53A.

12. For the foregoing reasons, the appeal is dismissed No costs.

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 Pomal Kanji Govindji & Ors vs Vrajlal Karsandas Purohit & Ors

AIR 436, 1988 SCR Supl. (3) 826

JUDGMENT: This is an appeal from the judgment and order of the Gujarat High
Court, dated 26th April, 1~82 dismissing the second appeal. The High Court
observed that the learned Judge had followed the judgment of the said High Court
in Khalubai Nathu Sumra v. Rajgo Mulji Nanji and others,AIR 1979 Gujarat 171
where the learned Single Judge in the background of a mortgage, where the
mortgagor was financially hard-pressed and the mortgage was for 99 years and
the term gave the mortgagee the right to demolish existing structure and construct
new one and the expenses of such to be reimbursed by mortgagor at the time of
redemption, it was held that the terms were unreasonable, unconscionable and not
binding.

1. MUKHARJI. J. These appeals and the special leave petition are directed against
the decision of the High Court of Gujarat, upholding the right of the mortgagors
to redeem the properties before the period stipulated in the deeds as well as the
right of the mortgagors to recover possession of the properties from the tenants
and/or the mortgagees without resort to the relevant Rent Restriction Act. All these
matters were separately canvassed before us as these involved varying facts, yet
the fundamental common question is, whether long term mortgages in the present
infaltionary market in fast moving conditions are clogs on equity of redemption
and as such the mortgages are redeemable at the mortgagors' instance before the
stipulated period and whether the tenants who have been inducted by the
mortgagees can be evicted on the termination of the mortgage or do these tenants
enjoy protection under the relevant Rent Restriction Acts. One basic fact that was
emphasised in all these cases was that all these involve urban immovable
properties. In those cirumstances, whether the mortgages operate as clogs on
equity of redemption is a mixed question of law and facts. It is necessary to have
a conspectus of the facts involved in each of the cases herein. We may start with
the facts relating to Special Leave Petition (Civil ) No. 8219 of 1982 because that is
a typical case.

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 2. In order, however, to appreciate the contentions urged therein, it will be
necessary to refer to the decision of the first Appellate Court, in the instant case
before us. By the judgment, the Assistant Judge, Kutch at Bhuj in Gujarat disposed
of two appeals. These appeals arose from the judgment and decree passed by the
Civil Judge, Bhuj, in Regular Civil Suit No. 35/72 by which the decree for
redemption of mortgage was passed and the tenants inducted by the mortgagees
were also directed to deliver up possession to the mortgagors. The plaintiffs had
filed a suit alleging that the deceased Karsandas Haridas Purohit was their father
and he died in the year 1956, he had mortgaged the suit property to Kanasara Soni
Shivji Jotha and Lalji Jetha for 30,000 Koris by a registered mortgage deed dated
20th April, 1943. The mortgage deed was executed in favour of Soni Govindji
Nalayanji who was the power of attorney holder and manager of the defendants
Nos. 1 and 2. The defendant No. 3 is the heir of said Govindji Narayanji and he
was also managing the properties of the defendants Nos I and 2. The mortgage
property consisted of two delis in which there were residential houses, shops etc.
The mortgagees had inducted tenants in the suit property and they were
defendants Nos. 4 to 9 in the original suit when the mortgage transaction took
place, the economic condition of the father of the plaintiffs was weak. He was
heavily indebted to other persons. It was alleged and it was so held by the learned
Judge and upheld by the Appellate Judge that the mortgagees took advantage of'
that situation and took mortgage deed from him on harsh and oppressive
conditions. They got incorporated long term of 99 years for redemption of
mortgage. It is further stated that though possession was to be handed over to the
mortgagees, they took condition for interest on the part of principal amount in the
mortgage PG NO 835 deed. Moreover, the mortgagees were given liberty to spend
any amount they liked for the improvement of the suit property. They were also
permitted to rebuild the entire property. Thus these terms and conditions,
according to the Appellate Judge, were incorporated in the mortgage deed to
ensure that the mortgagors were prevented for ever from redeeming the mortgage.
The terms and conditions, according to the Assistant Judge, Bhuj, being the first
Appellate Court were unreasonable, oppressive and harsh and amounted to clog
on equity of redemption and, as such, bad and the plaintiffs were entitled to
redeem the mortgage even before the expiry of the term of mortgage. A registered

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 notice to the defendants Nos. I and 2 was given to redeem the mortgage but they
failed to do so, hence, the present suit was filed to redeem the mortgage and to
recover actual possession from the defendants Nos. 4 to 9 who were the tenants
inducted by the mortgagees.

3. The defendant No. 1 resisted the suit. It was his case that the term of mortgage
was for 99 years, so the suit filed before the expiry of that period was premature.
The defendant No. 3 resisted the suit by written statement. The defendants Nos. 4
to 9 resisted the suit on the grounds that the plaintiffs were not entitled to redeem
the mortgage and even if they were so entitled, they could not get actual physical
possession from the tenants who were protected by the provisions of the relevant
Bombay Rent Act. It was their case that the plaintiffs were not entitled to get actual
possession of the premises in which they were inducted by the mortgagees. The
defendants Nos. 2/1 to 2/7 who were the heirs of mortgagee Shivji Jetha were
residing in London and New Delhi, so the personal service of summons could not
be effected upon them. The summons was published in the local newspapers but
none of them appeared before the Court so the Court proceeded ex-parte against
them. The trial was conducted and a preliminary decree for redemption of
mortgage was passed on 2nd April, 1974 by the Trial Court. Thereafter, the decree-
holder applied for final decree so the notices were issued to all the defendants. The
heirs of Shivji Jetha appeared in response to that notice and filed applications
before the Trial Court to set aside the ex- parte decree on the ground that summons
of the suit had not been duly served upon them. That prayer was rejected by the
Trial Court. Thereafter, they filed Civil Misc. Appeals in the District Court. The
appeals were allowed by the District Court and the ex-parte decree for redemption
of mortgage was set aside. The Trial Court was directed to proceed with the suit
after permitting the concerned defendants to take part in the proceedings right
after receiving their written statements. Accordingly defendant No. 2/1 appeared
in the PG NO 836 suit and filed his written statement while other defendants
remained absent.

4. It was the case of the defendant No. 2/1 that the sisters of the plaintiffs had not
been joined as parties in the suit, so the suit was bad for want of necessary parties.
Moreover, as per the terms and conditions of the mortgage deed dated 20th April,

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 1943, there was usufructuary mortgage for 20,000 koris and the remaining l0,000
koris were advanced to the mortgagor at monthly interest at the rate of 1/2 per
cent. There was a condition in the mortgage deed that the mortgagor should pay
principal amount as well as the interest at the time of redemption. When the suit
was filed in the year 1972, the mortgagees were entitled to recover interest on l0,000
koris for a period of 291 ears . That interest would be 17,400 koris so the total
mortgage amount will be Rs.47400 which would be equivalent to Rs. 15,800) and
and the Civil Judge had no jurisdiction to try such suit so the plaint should have
been returned for presentation in the proper court.

5. It was further alleged that the court fees paid by the plaintiffs was also not
sufficient. Moreover, it was not true that the father of the plaintiffs was of weak
economic condition. The grand father of the plaintiffs was an Advocate and the
father of the plaintiffs was the clerk of an Advocate. The plaintiff No. l was also
working as an Advocate at the time of the mortgage. so they knew the legal
position. It was further alleged that at the relevant time the prevalent custom in
Kutch State was to take mortgages of long term for 99 years and when it was
permissible to take mortgage deeds with such a long term It was also necessary to
give permission for rebuilding the whole property, for better enjoyment of it. So
long term mortgage and the conditions for reconstruction of the property could
not amount to clogs on equity of redemption of mortgage it was the case of the
mortgagees and/or tenants. The mortgagees did not take any, it was pleaded
undue advantage and they were not present physically when the transaction took
place through their power of attorney holders. If the conditions in the mortgage
deed did not amount to clogs on equity of redemption, the suit would be clearly
premature. It may be mentioned that the plaintiff No. 1 had subsequently become
a Civil Judge and was ultimately the Chairman of the Tribunal so if the said terms
and conditions of the mortgage were onerous and oppressive, he would not have
sat idle for 29 years. But he remained silent because he was aware of the custom,
it was pleaded. It was alleged that the prices of immovable properties had
increased tremendously; therefore, that suit had been filed with mala fide
intention.

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 6. It was averred that in case the Court came to the conclusion that there was clog
on equity of redemption and the plaintiffs were entitled to the PG NO 837
redemption, then the interest on 10,000 koris should be awarded to the
mortgagees. In the premises, it was averred that the suit should be dismissed as
there was no clog on equity of redemption and the court had no jurisdiction to try
the suit. The Trial Court then recorded additional evidence in the suit and
ultimately decreed the suit on 28th September, 1978. The Trial Court came to the
conclusion that there was mortgage transaction between the father of the plaintiffs
and Soni Shivji Jetha and Lalji Mulji on 20th April, 1943. The Trial Court further
came to the conclusion that the terms and conditions in the mortgage deed were
harsh and oppressive, which amounted to clog on equity of redemption, so the
plaintiffs were entitled to file the suit even before the expiry of the term of the
mortgage. The Trial Court also came to the conclusion that the sisters of the
plaintiffs were not necessary parties to the suit and even if they were necessary
parties, a co-mortgagor was entitled to file the suit for redemption, so the suit was
not bad for want of non-joinder of necessary parties. The Trial Court further came
to the conclusion that it had jurisdiction to try the suit and held that the
mortgagees were not entitled to claim interest on 10,000 koris. It was further
directed that the plaintiffs were entitled to recover possession from the defendants
Nos. 4 to 9 who were the tenants inducted by the mortgagees. Accordingly, a
preliminary decree was passed in the suit. Aggrieved thereby the mortgagees filed
Regular Civil Appeal No. 149/78 and the tenants filed Regular Civil Appeal No.
150/78. These were disposed of by the judgment of the first Appellate Court. The
learned Judge of the first Appellate Court framed the following issues: (1) Whether
the terms and conditions in the mortgage deed dated 20.4.1943 amount to clog on
equity of redemption? (2) Whether the decree passed is bad for want of jurisdiction
with trial court? (3) Whether the mortgagees are entitled to get interest on 10,000
koris? (4) Whether the tenants are protected from the effect of redemption decree
by virtue of the provisions of Bombay Rent Act? (5) Whether the decree passed by
the trial court is legal and proper? (6) What order?"

7. It is not necessary any longer in view of the findings made and the subsequent
course of events to detain ourselves on all the issues. For the purpose of the present
appeal is well as the connected appeals we are concerned with two issues, namely,

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 Issue Nos. 1 and 4 stated above, in other words, whether the terms and conditions
of the mortgage deed dated 20th April, 1943 amounted to clog on equity of
redemption and secondly, whether the tenants are protected from the effect of
redemption decree by virtue of the provisions of the Bombay Rent Act. The learned
Assistant Judge in the first appeal had noted that it was not in dispute that the
document. Ext. 103 dated 20th April, 1943, the certified copy of which was also
produced at Ext. 51 was executed by the father of the plaintiffs in favour of Kansara
Soni Shivji Jetha. According to this document, an usufructuary mortgage was
created on the suit property for 20,000 koris and the possession was to be delivered
to the mortgagees. Over and above that a further amount of 10,000 koris was also
paid to the mortgagor for whom he had to pay interest at the rate of 1/2 per cent
per month. The mortgage period was fixed for 99 years and after the expiry of that
period, the mortgagor had to pay 30,000 koris as principal amount along with
interest due on 10,000 koris. This was a registered document and it was acted upon
by the parties. The learned Trial Judge held that the long term of 99 years for
redemption coupled with other circumstances, indicated that there was clog on
equity of redemption It was argued that the long term for redemption was not
necessarily a clog on equity of redemption.

8. Certain decisions were referred to. The Trial Court noted that there was no
quarrel with the proposition of law that long term itself could not amount to clog
on equity of redemption, when the bargain otherwise was reasonable one and the
mortgagee had not taken any undue or unfair advantage. But, if in a mortgage
with long term of redemption, there were other circumstances to suggest that the
bargain was unreasonable one and the mortgagee had taken unfair advantage,
then certainly long term also will be clog on equity of redemption. It is a question
to be judged in the light of the surrounding circumstances. It may be noted here
that there was a condition in the mortgage deed permitting construction of
structure after demolishing the existing structure, costs of which were to be paid
by the mortgagor. After examining the PG NO 839 facts and the relevant decisions,
the first Appellate Court came to the conclusion that the terms were oppressive
and harsh and there was clog on equity of redemption and the mortgagor should
be freed from that bondage. Shri Rajinder Sachar, Shri B.K. Mehta as well as Shri
Dholakia urged on behalf of their respective clients that in former Kutch district,

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 there was a custom to take mortgages for long term of 99 years and when the
period was long. naturally the mortgagee would be required to give full authority
to repair and reconstruct the mortgaged property with a view to keep pace with
new demands of changing pattern, so the condition permitting the mortgagee to
reconstruct the whole premises was natural consequence of long term and that
should not be treated as clog on equity of redemption. The learned Assistant Judge
had rejected the similar contention made before him on behalf of the mortgagees
and tenants in view of the decisions of the Gujarat High Court which were also
arising out of the decisions in the suits filed in Kutch district and in those cases it
was held that there was clog on equity of redemption. We will deal with some
Gujarat decisions separately, presently. The learned Assistant Judge referred to
another circumstance i.e., to the condition of mortgage which indicated the
oppressive nature of the term. By mortgage deed being Ext. 103 usufructuary
mortgage was created for 20,000 koris only and additional mortgage of 10,000 koris
was also created for which the mortgagor had to pay interest at the rate of 1/2 per
month. Furthermore, the mortgagor was not allowed to discharge interest liability
periodically, but he had to pay to whole amount of interest at the end of 99 years
at the time of redemption of the mortgage. Naturally, there would be hugh
accumulation of interest which for all practical probabilities in most of the cases
will be an impossibility to discharge. It was held that the purpose was to ensure
that the right of redemption could never be exercised. On the other hand, it was
contended before the learned Assistant Judge that the transaction was bona fide
because reasonable consideration was paid as mortgage money. They were no
direct contact between the mortgagor and the mortgagee. There could not be any
collusion. The mortgagees were abroad. The learned Assistant Judge examined the
evidences of one Madhavji Shivji Soni in order to show comparable instances for
reasonableness of the consideration. The learned Assistant Judge after discussing
the evidence proceeded on the assumption that the consideration paid as
mortgage money was reasonable and proper and, according to him, it did not
make any difference if the other conditions in the mortgage deed were found to be
oppressive and amounting to clog on equity of redemption.

9. Attention of the learned Assistant Judge was drawn to the fact that this was a
bona fide transaction at the time when made, but subsequently, the prices of

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 immovable properties increased so the plaintiffs had come forward to file suits
after a lapse of long time. It was highlighted that the plaintiff No. I was serving as
a Civil Judge and if he came to know that the transaction was oppressive, he would
not have sat idle for such for a long period. Reference was made to the decision of
this Court in Seth Ganga Dhar v. Shankar Lal & Ors., [1959] S.C.R. 509. We will
examine that decision in detail. The learned Assistant Judge came to the conclusion
on point No. 1 that there was clog on equity of redemption and accordingly
answered the Issue No. 1 in the affirmative. With the other issues we are not
concerned in this appeal except Issue No. 4. Regarding Issue No. 4, as mentioned
hereinbefore, which is on the question whether the tenants are protected from the
effect of redemption decree by virtue of the provisions of the Bombay Rent Act, it
may be mentioned that the tenants had filed regular civil appeal and it was urged
before the learned Assistant Judge that even if the mortgage was redeemed, the
tenants inducted by the mortgagees would be entitled to continue in possession of
the properties in question as they were protected by the provisions of the said Rent
Act. There was no dispute in this case and in the facts of the other three appeals
that the tenants were inducted by the mortgagees after the mortgage was created.
It is also true that in all these mortgage deeds, there was provision that the
mortgagees were competent to lease out the suit property and if in exercise of that
power, they inducted the tenants in the suit properties, their tenancies would not
come to an end on the redemption of mortgage, it was argued. The Full Bench of
the Gujarat High Court in Lalji Purshottam v. Thacker Madavji Meghaji, 17 Gujarat
Law Reporter 497 held that the mortgagee in possession might lease the property,
but authorisation to the mortgagee to let out the property to any other tenant
would not amount to an intention to create tenancy beyond the term of mortgage.
Following the said decision, however, it was held that the tenant had no right to
be in possession and was not entitled to the protection of the Bombay Rent Act
after the redemption of the mortgage. The appeal was accordingly disposed of. As
mentioned hereinbefore, there was a second appeal to the High Court and the
High Court expressed the view in brief order and dismissed the second appeal on
26th April, 1982 It appears, however, that in second appeal two questions were
agitated, (1) the question of jurisdiction and Damdupat and (2) the tenants' right
to be in possession. So far as the question of jurisdiction and Damdupat, the High
Court observed that the Assistant Judge was right. This PG NO 841 point is not

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 before us in this appeal under Article 136 of the Constitution. So far as the question
of tenants' right to be in possession after the redemption of mortgage, the High
Court followed the decision in Khatubai Nathu Sumra v. Rajgo Mulji Nanji and
others, (supra).

10. It was a suit for redemption of the mortgaged property located in the town of
Bhuj. There upon, the respondent No. I preferred an appeal to the District Judge
where the suit was decreed. The defendants filed a second appeal which was
dismissed and the decree-holder made an application for final decree and the
Court gave the final decree on 30th November, 1974. While giving the final decree
for redemption of the mortgage a direction was given in the decree to the judgment
debtors to hand over the possession of the mortgaged property within three
months on the decree-holder making payment of dues in respect of the mortgage
in the Court. In pursuance of the final decree the decree-holder took out the
execution proceedings and deposited the dues in the Court. At the same time the
decree-holder claimed possession of the mortgaged property from one
Shambhulal Vallabhji Thacker, the appellant herein, stating that he was a tenant in
the possession of the property. The notice was issued to Shambhulal Vallabhji, who
appeared before the Court and submitted his objections stating that he was a
tenant protected by law and he could not be evicted in the execution of the decree
obtained by the decree-holder. He also stated that he was entitled to get the
protection under the Bombay Rent Control Act.

11. The learned District Judge held that there was no conduct on the part of the
decree-holder which would estop him from claiming physical possession from the
tenant of the mortgagee in possession. It was contended that when the mortgagee
leased out the mortgaged property under the ordinary prudent management of
the mortgaged property the mortgagor on redemption of the mortgage was not
entitled to recover physical possession of the property from the tenant. The learned
Judge negatived this contention. The High Court rejected the appeal summarily.
Hence, this appeal.

12. The appellant is the tenant of the mortgagee. The plaintiffs Nos. 1 to 6 are the
heirs and legal representatives of deceased Mehta Kanji Bhagvanji. It may be

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 mentioned that the tenant was inducted by the mortgagee in 1955. The property
was mortgaged in 1948 for a period of five years. It appears, therefore, that the
tenant was inducted after the period of redemption had expired. The mortgagor
had a right to redeem after the expiration of the mortgage. It was contended that
though the mortgagee had inducted tenants in the suit property with a mala fide
intention on the part of the mortgagee, it was still an act of prudent management.
The first Appellate Court on the question before us, namely, whether the tenant
was protected by the Bombay Rent Act, came to the conclusion after discussing all
the relevant evidence and relying on the decision of the Lalji Purshottam v.
Thacker Madhavji Meghaji (supra) that the tenants were not so protected under
the provisions of the Bombay Rent Act in the facts of the case The appellant
preferred this appeal and this is in issue in this case.

13. The right of redemption, therefore, cannot be taken away. The Courts will
ignore any contract the effect of which is to deprive the mortgagor of his right to
redeem the mortgage. It was further reiterated at page 515 of the report in Seth
Ganga Dhar's case (supra) that the rule against clogs on the equity of redemption
no doubt involves that the Courts have the power to relieve a party from his
bargain. If he has agreed to forfeit wholly his right to redeem in certain
circumstances, that agreement will be avoided. But the Courts have gone beyond
this. They have also relieved mortgagors from bargains whereby the right to
redeem has not been taken away but restricted. It is a power evolved by the early
English Courts of Equity for a special reason. All through the ages the reason has
remained constant and the Court's power is, therefore, limited by that reason. The
extent of this power has, therefore, to be ascertained by having regard to its origin.
It is better to refer to the observations of Northington L.C. in Vermon v. Bethell, 28
E.R. 838 and 839. Lord Chancellor observed therein as follows: "This court, as a
court of conscience, is very jealous of persons taking securities for a loan, and
converting such securities into purchases. And therefore I take it to be an
established rule, that a mortgagee can never provide at the PG NO 845 time of
making the laon for any event or condition on which the equity of redemption
shall be discharged, and the conveyance absolute. And there is great reason and
justice in this rule, for necessitous men are not, truly speaking, free men, but, to

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 answer a present exigency, will submit to any terms that the craft may impose
upon them."

14. The same view was reiterated by Viscount Haldane L.C. in G. and C. Kreglinger
v. New Patagonia Meat and Cold Storage Company Ltd., [1914] Appeal Cases 25,
where it was observed at pages 35 and 36 of the report as follows: "This jurisdiction
was merely a special application of a more general power to relieve against
penalties and to mould them into mere securities. The case of the common law
mortgage of land was indeed a gross one. The land was conveyed to the creditor
upon the condition that if the money he had advanced to the feoffor was repaid on
a date and at a place named, the fee simple would revest in the latter, but that if
the condition was not strictly and literally fulfilled he should lose the land for ever.
What made the hardship on the debtor a glaring one was that the debt still
remained unpaid and could be recovered from the fee offor notwithstanding that
he had actually forfeited the land to the mortgagee. Equity, therefore, at an early
date began to relieve against what was virtually a penalty by compelling the
creditor to use his legal title as a mere security.

15. My Lords, this was the origin of the jurisdiction which we are now considering,
and it is important to bear that origin in mind. For the end to accomplish which
the jurisdiction has been evolved ought to govern and limit its exercise by equity
judges. That end has always been to ascertain, by parol evidence if need be, the
real nature and substance of the transaction, and if it turned out to be in truth one
of mortgage simply, to place it on that footing. It was, in ordinary cases, only where
there was conduct which the Court of Chancery regarded as unconscientious that
it interfered with freedom of contract. The lending of money, on mortgage or
otherwise, was looked on with suspicion, and the court was on the alert to discover
want of con-science in the terms imposed by lenders."

16. The reason justifying the Court's power to relieve a mortgagor from the effects
of his bargain is its want of conscience. Putting it in more familiar language the
Court's jurisdiction to relieve a mortgagor from his bargain depends on whether
it was obtained by taking advantage of any difficulty or embarrassment that he
might have been in when he borrowed the moneys on the mortgage. Length of the

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 term, according to Sarkar, J. in the aforesaid decision, was not by itself oppressive
and could not operate as a clog on the equity of redemption. There was a term in
the mortgage deed that the mortgagees could spend any amount on repairs and
those expenses would be paid, according to the account produced by the
mortgagees. All that it meant was that in claiming moneys on account of repairs
and construction the mortgagees had to show from their accounts that they had
spent these moneys. This Court on that basis held that the clause which provided
that the mortgage had to be redeemed within the specified period of six months
was bad. The principle, however, is that it was not an unconscionable bargain and
it did not in effect deprive the mortgagor of his right to redeem the mortgage or so
to curtail his right to redeem that it has become illusory and non-existent, then
there was no clog on equity of redemption. It has to be borne in mind that the
English authorities relied upon by Sarkar, J. and the principles propounded by this
Court in the case of Seth Ganga Dhar's, case (supra) were in the background of a
sedate and fixed state of affairs. The spiral and escalation of prices of the
immovable properties was not then there. Today, perhaps, a different conspectus
would be required to consider the right to redeem the property after considerable
length of time pegging the price to a small amount of money, the value of which
is fast changing.

17. The rights and liabilities of the mortgagor are controlled by the provisions of
section 60 of the Transfer of Property Act, 1882. The clog on redemption has been
noted in Mulla's Transfer of Property Act. 7th Edition, page 401 that a mortgage
being a security for the debt, the right of redemption continues although the
mortgagor fails to pay the debt at due date. Any provision inserted to prevent,
evade or hamper redemption is void. That is implied in the maxim "once a
mortgage always a mortgage". Collins, M.R. in Jarrah Timber & Wood Paving
Corporation v. Samuel, [1903] 2 Ch. 1 at page 7 observed that it is the right of a
mortgagor on redemption, by reason of the very nature of a mortgage to get back
the subject of the mortgage and to hold and enjoy as he was entitled to hold and
enjoy it before the mortgage.

18. PG NO 847 The doctrine clog on the equity of redemption" is a rule of justice,
equity and good conscience. It must be adopted in each case to the reality of the

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 situation and the individuality of the transaction. We must take note of the time,
the condition, the price spiral, the term bargain and the other obligations in the
background of the financial conditions of the parties. Therefore, in our opinion, in
view of the evidence it is not possible to hold that there was no clog on the equity
of redemption in these cases.

19. A very large number of decisions have been cited at the Bar. Shri T.U. Mehta,
Shri Rajinder Sachar, Shri B.K. Mehta and Shri Dholakia very ably and
painstakingly argued this case in respect of their cotentions. Our attention was
drawn to the observations of the Allahabad High Court in Chhedi Lal v. Babu
Nandan, A.I.R. 1944 Allahabad 204 where it was held that the provision inserted
to prevent redemption on payment or performance of the debt or obligation for
which security was given, was a clog on equity of redemption. Condition in
mortgage was in that case that if mortgagee constructed new building by
demolition of mortgaged property which was kachcha structure, mortgagor
would pay cost of construction at the time of redemption. Stipulation in
circumstances of the case, it was held, did not amount to clog on equity of
redemption. It was argued before us by th. Mortgagees that the provision for the
payment towards cost and expenses of repairs and construction did not amount
to a clog on the equity of redemption because the repairs and construction were to
be effectuated to keep the property in good condition. In the aforesaid decision
Verma, J. at page 207 of the report observed that in the case before the Court it was
not pleaded that any pressure and undue influence had been exercised upon the
mortgagors. Verma. J referred to the observations of the Viscount Haldane L.C. in
G & C. Kreglinger v. New Patagonla Meat and Cold .Storage Co., (supra) and
Lindley M.R. in Santley v. Wilde, (supra). Sir Tej Bahadur Sapru argued before
Verma, J. that it is not his contention that the mortgagee in this case tried to gain a
collateral advantage. His argument was that a onerous term has been incorporated
in the deed which placed such a burden on the mortgagor as to make it impossible
for him to redeem. There is a freedom of contract between the mortgagor and the
mortgagee as observed by Verma, J. at page 207 of the report We must, however,
observe that we live in a changed time. Freedom of contract is permissible
provided it does not lead to taking advantage of the oppressed or depressed
people. The law must transform itself to the social awareness. PG NO 848 Poverty

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 should not be unduly permitted to curtail one's right to borrow money on the
ground of justice, equity and good conscience on just terms. If it does, it is bad.
Whether it does or does not, must, however, depend upon the facts and the
circumstances of each case.

20. Reference was also be made to the case of Bhika and Anr. v. Sheikh Amir and
Ors., A.I.R. 1923 Nagpur 60 where there was no provision under which power was
given to the executant of the Deed to pay off the amount which was the
consideration for the Deed, and no accounts were to be rendered or required. It
was held that relief against an agreement forming a clog on the equity of
redemption can only be obtained if it was challenged within a reasonable time. It
was an equitable relief which cannot be granted as a matter of course. In that
decision Sri Vivian Bose, as the learned counsel appearing for the appellant
unsuccessfully sought to obtain relief against an agreement containing a clog on
the equity of redemption.

21. Whether in the facts and the circumstances of these cases, the mortgage
transaction amounted to clog on the equity of redemption, is a mixed question of
law and fact. Courts do not look with favour at any clause or stipulation which
clogs equity of redemption. A clog on the equity of redemption is unjust and
unequitable. The principles of English law, as we have noticed from the decisions
referred to hereinbefore which have been accepted by this Court in this country,
looks with disfavour at clogs on the equity of redemption. Section 60 of the
Transfer of Property Act, in India, also recognises the same position.

22. It is a right of the mortgagor on redemption, by reason of the very nature of the
mortgage, to get back the subject of the mortgage and to hold and enjoy as he was
entitled to hold and enjoy it before the mortgage. If he is prevented from doing so
or is prevented from redeeming the mortgage, such prevention is bad in law. If he
is so prevented, the equity of redemption is affected by that whether aptly or not,
and it has always been termed as a clog. Such a clog is inequitable. The law does
not countenance it. Bearing the aforesaid back-ground in mind, each case has to be
judged and decided in its own perspective. As has been observed by this Court
that long-term for redemption by itself, is not a clog on equity of redemption.

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 Whether or not in a particular transaction there is clog on the equity of redemption,
depends primarily upon the period of redemption, the circumstances under which
the mortgage was created, the economic and financial position of the mortgagor,
and his PG NO 849 relationship vis-a-vis him and the mortgagee, the economic
and social conditions in a particular country at a particular point of time, custom,
if any, prevalent in the community or the society in which the transaction takes
place, and the totality of the circumstances under which a mortgage is created,
namely, circumstances of the parties, the time, the situation, the clauses for
redemption either for payment of interest or any other sum, the obligations of the
mortgagee to construct or repair or maintain the mortgaged property in cases of
usufructuary mortgage to manage as a matter of prudent management, these
factors must be co-related to each other and viewed in a comprehensive
conspectus in the background of the facts and the circumstances of each case, to
determine whether these are clogs on equity of redemption.

23. These principles have been recognised by this Court in Ganga Dhar v. Shankar
Lal (supra). It has also to be borne in mind that long-term for redemption in respect
of immovable properties was prevalent at a time when things and the Society were,
more or less, in a static condition. We live in changing circumstances. Mortgage is
a security of loan. It is an axiomatic principle of life and law that necessitous men
are not free men. A mortgage is essentially and basically a conveyance in law or
an assignment of chattels as a security for the payment of debt or for discharge of
some other obligation for which it is given. The security must, therefore, be
redeemable on the payment or discharge of such debt of obligation. Any provision
to the contrary, notwithstanding, is a clog or fetter on the equity of redemption
and, hence, bad and void. "Once a mortgage must always remain a mortgage", and
must not be transformed into a conveyance or deprivation of the right over the
property.

24. This is the English law based on principles of equity. This is the Indian law
based on justice, equity and good conscience. We reiterate that position. Though,
long-term by itself as the period for redemption, is not necessarily a clog on equity
but in the changing circumstances of inflation and phenomenal increase in the
prices of real estates, in this age of population-explosion and consciousness and

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 need for habitat, long-term, very long- term, taken with other relevant factors,
would create a presumption that it is a clog on equity of redemption. If that is the
position then keeping in view the financial and economic conditions of the
mortgagor, the clause obliging the payment of interest even in case of usufructuary
mortgage not periodically but at the time of ultimate redemption imposing a
burden on the mortgagor to redeem, the clauses permitting construction and
reconstruction of the PG NO 850 building in this inflationary age and debiting the
mortgagor with an obligation to pay for the same as an obligation for redemption,
would amount to clog on equity.

25. Section 60 of the Transfer of Property Act, 1882, conferred on the mortgagor
the right of redemption. This is a statutory right. The right of redemption is an
incident of a subsisting mortgage and it subsists so long as the mortgage subsists.
See the observations in R. Ghose "Law of Mortgage" 6th Edn. page 227. Whether
in a particular case there is any clog on the equity of redemption, has to be decided
in view of its background of the particular case. The doctrine of clog on equity of
redemption has to be moulded in the modern conditions. See Mulla: 'Transfer of
Property Act', 17th Edn. 402. Law does not favour any clog on equity of
redemption. It is a settled law in England and in India that a mortgage cannot be
made altogether irredeemable or redemption made illusory. The law must
respond and be responsive to the felt and discernible compulsions of
circumstances that would be equitable, fair and just, and unless there is anything
to the contrary in the Statute, Court must take cognisance of that fact and act
accordingly. In the context of fast changing circumstances and economic stability,
long-term for redemption makes a mortgage an illusory mortgage, though not
decisive. It should prima facie be an indication as to how clogs on equity of
redemption should be judged.

26. In the facts and the circumstances and in view of the long period for
redemption, the provision for interest (1/2% per annum payable on the principal
amount at the end of the long period, the clause regarding the repairs etc., and the
mortgagor's financial condition, all these suggest that there was clog on equity.
The submissions made by Mr. Sachar and Mr. Mehta are, therefore, unacceptable.
In that view of the matter, we are of the opinion that the decision of the High Court

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 as well as the Courts below that there existed clog on the equity of redemption in
case of these mortgages, is correct and proper, and we hold so accordingly. Before
we dispose of the contentions on the second aspect, we must deal with some of the
decisions of the Gujarat High Court to which reference had been made and some
of which also referred before us. We have noticed the decision of the PG NO 851
Gujarat High Court in Khatubai Nathu Sumra v. Rajgo Mulji Nanji and others,
(supra). In Maganlal Chhotalal Chhatrapati and Ors. v. Bhalchandra Chhaganlal
Shah, 15 GujaratLaw Reporter 193. P.D. Desai, J. as the learned Chief Justice then
was, held that the doctrine of clog on the equity of redemption means that no
contract between a mortgagor and mortgagee made at the time of the mortgage
and as a part of the mortgage transaction or, in other words, as a part of the loan,
would be valid if it in substance and effect prevents the mortgagor from getting
back his property on payment of what is due on his security. Any such bargain
which has that effect is invalid. The learned Judge reiterated that whether in a
particular case long term amounted to a clog on the equity of redemption had to
be decided on the evidence on record which brings out the attending
circumstances or might arise by necessary implication on a combined reading of
all the terms of the mortgage. The learned Judge found that this long term of lease
along with the cost of repairing or reconstruction to be paid at the time of
redemption by the mortgagor indicated that there was clog on equity of
redemption. The learned Judge referred to certain observations of Mr. Justice
Macklin of the Bombay High Court where Justice Macklin had observed that
anything which does have the appearance of clogging redemption must be
examined critically, and that if the conditions in the mortgage taken as a whole
and added together do create unnecessary difficulties in the way of redemption it
seems that is a greater or less clog upon the equity of redemption within the
ordinary meaning of the term. In our opinion, such observations will apply with
greater force in the present inflationary market. The other decision to which
reference may be made is the decision of the Gujarat High Court in Soni Motiben
v. M/s. Hiralal Lakharnshi, 22 Gujarat Law Reporter 473. This also reiterates the
same principle. In Vadilal Chhaganlal Soni and Others v. Gokaldas Mansukh and
Others, A.I.R. 1953 Bombay 408 also, the same principle was reiterated. In that
case, it was held by Gajendragadkar J., as the learned Chief Justice then was, that
the agreement between the mortgagor and mortgagee was that the mortgagor was

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 to redeem the mortgage 99 years after its execution and the mortgagee was given
full authority to build any structure on the plot mortgaged after spending any
amount he liked It was held that the two terms of the mortgage were so
unreasonable and oppressive that these amounted to clog on the equity of
redemption. Similar was the position in the case of Sarjug Mahto and other. v. Smt.
Devrup Devi and Others A.I.R. l963 Patna 114, where also the mortgage was for 99
years. In Chhedi Lal v. Babu Nandan's case (supra), the court reiterated that
freedom of contract unless it is vitiated by undue influence or pressure of poverty
should be giver. a PG NO 852 free play. In the inflationary world, long term for
redemption would prima facie raise a presumption of clog on the equity of
redemption. See also the observations in Rashbehary Ghose' 'Law of Mortgage' 6th
Edn. pages 227 and 228. Bearing the aforesaid principles in mind we must analyse
the facts involved in these appeals. It has been noticed in S.L.P. (Civil) No. 8219 of
1982 that the High Court of Gujarat by its order impugned had dismissed the
second appeal. The High Court had merely observed in dismissing the second
appeal that the First Appellate Court had followed the decision of the Gujarat High
Court in Khatubai Nathu Sumra v. Rajgo Mulji Nanji and Others, (supra). We have
noted the salient features of the said decision. The High Court, therefore, found no
ground to interfere with the decision of the First Appellate Court and accordingly
dismissed the second appeal. The First Appellate Court by its judgment disposed
of Civil Regular Appeal No. 149 of 1978 and another civil appeal which was the
appeal by the tenant was also disposed of by the said judgment. The learned Judge
of the Appellate Court had referred to the ratio of the decision in Gangadhar v.
Shankerlal (supra). The learned Judge bearing in mind the principle of the
aforesaid decision and the relevant clause of Ext. 103 came to the conclusion that
the clauses amounted to clog on the equity of redemption in the facts of this case.
Shri Sachhar tried to urge before us that on the evidence and the facts in this case
having regard to the position of the parties, the transaction did not amount to clog
on the equity of redemption. It was emphasised by the First Appellate Court that
the fact that the son of the mortgagor subsequently became Civil Judge would not
affect the position because what was relevant was the financial condition at the
time of the transaction. We have further to bear in mind that it has come out in the
evidence that the father of the plaintiff was residing in the suit property at the
relevant time and there was no other residential house except the suit property.

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 The First Appellate Court, therefore, emphasised in our opinion rightly that if
there was no pressure from the creditor, no body would like to mortgage the only
house which is sole abode on the earth. In that view of the matter and in view of
the position in law, we are of the opinion that the First Appellate Court was right
in the view it took. 643. There the term fixed for redemption was of 96 years and
there was a stipulation for payment of interest along-with principal not
periodically but only at the time of redemption. In the instant case before us the
mortgagor was required to pay the whole amount of interest at the end of 99 years
which will practically make the redemption impossible. Applying the well-settled
principles which will be applicable to the facts of this case in determining whether
there was in fact a clog on the equity of redemption, we are of the opinion what
the First Appellate Court was right in holding that there was a clog on equity of
redemption.

27. In this connection, it will be appropriate here to refer to the position as

mentioned in the Mulla's`Transfer of Property Act', 7th Edn. pages 513 and 514,
which is as follows: "Whether a mortgagee in possession can by reason of clause
(a) grant a lease of the mortgaged property has been considered in several
decisions of the Supreme Court. In Mahabir Gope v. Harbans Narain, (1952 S.C.R.
775, the Supreme court observed that the right conferred under clause(a) was an
exception to the general rule that a person cannot confer a better title on another
than he possesses himself. The Court pointed out that it followed that though a
mortgagee may, if it is prudent, grant leases, these would determine on
redemption. The Court recognised, however, that in some cases the granting of a
lease in the course of prudent management might result in the tenant acquiring
rights under other laws so that he could not be evicted by the mortgagor, but this
was an exception, and could not apply where the mortgage deed prohibits such a
lease either expressly, or by necessary implication. These observations do not
appear to have been followed in Harihar Prasad Singh v. Deonarayan Prasad,
[1956] S.C.R. 1 where the Suprerne PG NO 861 Court held that even a lease created
by a mortgagee in possession in the course of prudent management though
binding on the mortgagors after redemption, could not create the rights of a raiyat
on the tenants. The question was next considered in Asa Ram v. Ram Kali, [1958]
S.C.R. 986, where the Supreme Court held that the creation of a lease which would

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 create occupancy rights in favour of the tenants could not be regarded as a prudent
transaction. In Prabhu v. Ramdev, [1966] 3 S.C.R. 676. however, the Supreme Court
without referring to Asa Ram s case held that a tenant of a mortgagee can invoke
the benefit of subsequent Tenancy legislation which provided that such a tenant
could not be evicted except in the circumstances set out in that legislation. The
Court explained Mahabir Gope's case as being a decision given with reference to
the normal relationship of landlord and tenant. and stressed that the Supreme
Court in that case had contemplated an extraordinary situation arising from a
tenant acquiring rights under other laws. The Court explained Harihar Prasad
Singh's case as having been decided on the peculiar facts of the case, viz,. that in
that case the tenants were not entitled under the Local law to invoke the protection
of that law. In Film Corporation Ltd. v. Gyan Nath, [1970] 2 S.C.R. 581 the Supreme
Court again considered the question. The Court did not refer to either Harihar
Prasad Singh,s case (supra) or Prabhu v. Ramdev (supra). The Court observed that
the principle laid down in Mahabir Gope's case (supra) that a bona fide and
prudent lease would bind the mortgagor "ordinary'' applies only to agricultural
lands and has "seldom" been extended to urban property. This observation is
strictly speaking, obiter, as the Court found that the lease in question was neither
bona fide nor prudent in view of the long term and the low rent. It is respectfully
submitted that there is no warrant for limiting sec. 76(a) to agricultural land.
Whether a particular lease is bona fide or prudent is a question of fact; obviously
a lease of urban land which would confer on the lesson the protection of special
statutes such as the Rent Acts would prima facie be imprudent. In Sachalmal
Parasram v. Ratanbai, [1987] 3 S.C.C. 198, however, the Supreme Court has
repeated the obiter observation in the Film Corporation case (supra) that except in
the case of agricultural land acts of a mortgagee would not bind the mortgagor.
28. Having considered the facts and the circumstances and the ratio of the decision
in Jadavji Purshottam's case (supra), we are clearly of the opinion that the tenancy
rights did not come to be enlarged by the Tenancy Legislation after the tenant was
put into possession by the mortgagee and the tenancy created ia favour of the
tenants by the mortgagor did not have the concurrence of the mortgagor so as to
claim tenancy rights even after redemption of the mortgage. In the premises, the
appeals must fail and are dismissed. Civil Miscellaneous Petition in C.A. No.

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 397/80 must also fail and is dismissed. The parties will pay and bear their own
costs. Appeals dismissed.

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 Shri Shivdev Singh & Anr vs Sh.Sucha Singh & Anr
AIR 2000 SC 1935

JUDGMENT: SETHI,J. Claiming to be the owner of the disputed property being

land measuring 23 canals 2 marlas situate in Village Sansra, Tehsil Ajnala, Punjab,
the respondent-plaintiff filed a suit for possession by way of redemption against
the appellants in the Court of Additional Senior Sub- Judge, Ajnala. The suit was
decreed by the Trial Court with a direction for delivery of possession by way of
redemption on paying/ depositing the mortgage money of Rs.7,000/- minus the
cost of the decree. The appeal filed by the appellants was dismissed by the First
Appellate Court on 25th July, 1998 and second appeal was dismissed vide the
judgment impugned in this appeal.

2. It is contended on behalf of the appellants that the clause prescribing the period
of mortgage did not constitutes a clog on the equity of redemption and that the
suit filed before the expiry of the stipulated time was premature in terms of Section
60 of the Transfer of Property Act. In support of their contentions the appellants
have relied upon the judgment of this Court in Ganga Dhar vs. Shankar Lal [AIR
1958 SC 770 = 1959 SCR 509] and distinguished the judgment relied upon by the
High Court in the case of Pomal Kanji Govindji & ors.vs. Vrajlal Karsandas Purohit
& Ors. [AIR 1989 SC 436].

3. In order to appreciate the rival contentions, it is necessary to take note of the

facts of the case which have given rise to the filing of the present appeal. The
disputed property was owned by one Prakash Singh who had mortgaged the same
in favour of Smt.Basant Kaur for a sum of Rs.7,000/- vide mortgage deed dated
19.3.1968. The said Smt.Basant kaur died whereafter the appellants herein stepped
into her shoes qua the suit property and, according to the plaintiffs became
mortgagees in possession of the said land. The said Shri Prakash Singh, the original
owner, sold the land measuring 19 kanals 2 marlas out of the mortgaged property
in favour of the respondents Sucha Singh vide registered sale deed dated 25th
March, 1987 for a valid consideration by which the mortgage money of Rs.7,000/-
was kept with the respondent-plaintiff as security (Amanat) to be paid to the
appellants. It was further pleaded by the plaintiff that at the time of the original

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 mortgage deed dated 19.3.1968 the said Shri Prakash Singh was financially tight
and allegedly taking undue advantage of his poor financial condition and
helplessness the appellants got incorporated a term in the mortgage deed, to the
effect that the mortgage was for a period of 99 years which constituted a clog on
the equity of redemption and that the appellants had been enjoying the usufructs
of the mortgage for more than 20 years before the date of the filing of the suit.
Despite the fact that the respondent-plaintiff had purchased only 19 kanals 2
marlas out of the mortgaged land, he offered the whole of the mortgage money to
the appellants defendant realising that partial redemption was not permissible.
The appellants were stated to have refused to deliver possession which
necessitated the filing of the suit. Prakash Singh who was impleaded as defendant
No.3 was proceeded ex-parte. The appellants, though admitted that the disputed
land under mortgage was in their possession on the basis of a mortgage for a sum
of Rs.7,000/- since the year 1968, yet contended that the plaintiffs had no right to
get the suit land redeemed before the expirty of mortgage period of 99 years. The
suit was stated to be premature and liable to be dismissed. On the basis of the
pleadings of the parties, the Trial Court framed the following issues: "1. Whether
the disputed land is liable to be redeemed in favour of the plaintiff as claimed
through this Suit?

4. Whether the period of 99 years of mortgage is a clog on the equity of

redemption? OPP. Whether the plaintiff has no locus standi to file this suit? OPD
Relief?" The Trial Court while deciding Issue Nos.1 and 2 held: 4."The clause in
the mortgage deed providing for the mortgage of the land for a period of 99 years
constitutes a clog on the equity of redemption and as such is illegal and void and
the same cannot be allowed to stand in the way of the plaintiff to get the suit land
redeemed or acquire its possession. The statutory right of redemption cannot be
fettered by any condition which impedes or prevents the redemption clause. This
view stands fully fortified from the relevant law laid down through an authority,
1992(1) All India Land Laws Reporter (P&H) 524, Ajit Singh vs. Kakhbir Singh and
others. As such the argument advanced on behalf of the defendants on this account
must fail. The case of the plaintiff could not be resisted on any other cogent
ground."

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 5. The plaintiff-respondent was held to have proved that he was entitled to get
whole of the disputed land redeemed by payment of the mortgage money of
Rs.7,000/- to the appellants defendants. In view of positive findings on Issue Nos.1
and 2 in favour of the plaintiffs, issue No.3 was decided against the defendants
and suit decreed as noticed earlier. The appellate court also decided on facts that
the plaintiff after the purchase of the land, the subject matter of the suit, had
become mortgagor and was entitled to redeem the same prior to the period of 99
years fixed in the mortgage deed. The clog or fetter of redemption imposed in the
mortgage deed was held to be void which did not prevent the plaintiffs to seek
redemption of the mortgaged property prior to the aforesaid period. Section 60 of
the Transfer of Property Act provides that at any time after the money has become
due, the mortgagor has a right, on payment or tender, at a proper time and place
of the mortgagor-money to require the mortgagee to deliver the mortgage deed
and all documents relating to the mortgaged property and where the mortgagee
is in possession of the mortgaged property, to deliver possession thereof to the
mortgagor. Such a right of the mortgagor is called, in English Law, the equity of
redemption. The mortgagor being an owner who has parted with some rights of
ownership has a right to get back the mortgage deed or mortgaged property, in
exercise of his right of ownership. The right of redemption recognised under the
Transfer of Property Act is thus a statutory and legal right which cannot be
extinguished by any agreement made at the time of mortgage as part of the
mortgage transaction. This Court in Jayasingh Dnyanu Mhoprekar & Anr. vs.
Krishna Babaji Patil & Anr.[AIR 1985 SC 1646] held: "It is well settled that the right
of redemption under a mortgage deed can come to an end only in a manner known
to law. Such extinguishment of the right can take place by a contract between the
parties, by a merger or by a statutory provision which debars the mortgagor from
redeeming the mortgage. A mortgagee who has entered into possession of the
mortgaged property under a mortgage will have to give up possession of the
property when a suit for redemption is filed unless he is able to show that the right
of redemption has come to an end or that the suit is liable to be dismissed on some
other valid ground. This flows from the legal principle which is applicable to all
mortgages, namely "Once a mortgage, always a mortgage."

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 6. Any provision incorporated in the mortgage deed to prevent or hamper the
redemption would thus be void. A mortgage cannot be made irredeemable and
the right of redemption notan illusory. This Court in Ganga Dhar v. Shankar Lal
[AIR 1958 SC 770] held: "The rule against clogs on the equity of redemption is that,
a mortgage shall always be redeemable and a mortgagor's right to redeem shall
neither be taken away nor be limited by any contract between the parties. The
principle behind the rule was expressed by Lindley M.R. in Santley v. Wilde, (1899)
2 Ch. 474(B) in these words: "The principle is this: a mortgage is a conveyance of
land or an assignment of chattles as a security for the payment of a debt or the
discharge of some other obligation for which it is given. This is the idea of a
mortgage; and the security is redeemable on the payment or discharge of such debt
or obligation, any provision to the contrary notwithstanding. That, in my opinion
is the law. Any provision inserted to prevent redemption on payment or
performance of the debt or obligation for which the security was given is what is
meant by a clog or fetter on the equity of remption and is therefore void. It follows
from this, that "once a mortgage always a mortgage."

7. The right of redemption, therefore, cannot be taken away. The court will ignore
any contract the effect of which is to deprive the mortgagor of his right to redeem
the mortgage. One thing, therefore, is clear, namely, that the term in the mortgage
contract, that on the failure of the mortgagor to redeem the mortgage within the
specified period of six months the mortgagor will have no claim over the
mortgaged property, and the mortgage deed will be deemed to be a deed of sale
in favour of the mortgagee, cannot be sustained. It plainly takes away altogether,
the mortgagor's right to redeem the mortgage after the specified period. This is not
permissible, for "once a mortgage always a mortgage" and therefore always
redeemable. The same result also follows from S.60 of the Transfer of Property Act.
So it was said in Mohammad Sher Kahn v. Seth Swami Dayal, 49 Ind App. 60 at
p.65: (AIR 1922 PC 17 at p.19) (C).

8. An anomalous mortgage enable a morgagee after a lapse of time and in the

absence of redemption to enter and take the rents in satisfaction of the interest
would be perfectly valid if it did not also hinder an existing right to redeem. But it
is this that the present mortgage undoubtedly purports to effect. It is expressly

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 stated to be for five years, and after that period the principal money became
payable. This, under S.60 of the Transfer of Property Act, is the event on which the
mortgagor had a right on payment of the mortgage money to redeem. The section
is unqualified in its terms, and contains no saving provision as other sections do
in favour of contracts to the contrary. Their Lordships therefore see on sufficient
reason for withholding from the words of the section their full force and effect."

9. It was observed that the rule against clog on equity of redemption empowered
the courts to relieve a party from his bargain. If a person has agreed to forfeit
wholly his right to redeem in certain circumstances, that agreement will be
avoided. After referring to judgments in Vernon v. Bethell, (1762) 2 Eden 110 at
113; 28 ER 838 at p. 839 (D), G & C. Kreglinger v. New Patagonia Meat and Cold
Storage Company Ltd. (1914) AC 25 at pp. 35 & 36) this Court held: "The reason
then justifying the court's power to relieve a mortgagor from the effects of his
bargain is its want of conscience. Putting it in mere familiar language the Court's
jurisdiction to relieve a mortgagor from his bargain depends on whether it was
obtained by taking advantage of any difficulty or embarrassment that he might
have been in when he borrowed the moneys on the mortgage. Was the mortgagor
oppressed? Was he imposed upon? If he was, then he may be entitled to relief.

10. We then have to see if there was anything unconscionable in the agreement that
the mortgage would not be redeemed for eightyfive years. Is it oppressive? Was
he forced to agree to it because of his difficulties? Now this question is essentially
one of fact and has to be decided on the circumstances of each case. It would be
wholly unprofitable in enquiring into this question to examine the large number
of reported cases on the subject, for each turns on its own facts."

11. The Court further held that the length of term by itself would not lead to the
conclusion that it was an oppressive term. Restricting their findings on the facts of
the case, the Court observed "it is not necessary for us to go so far as to say that the
length of the term of the mortgage can never by itself show that the bargain was
oppressive. We do not desire to say anything on that question in this case. We think
it enough to say that we have nothing here to show that the length of the term was
in any way disadvantageous to the mortgagor".

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 12. In Pomal Kanji Govindji & Ors. v. Vrajlal Karsandas Purohit & Ors. [AIR 1989
SC 436] this Court held that "freedom of contract is permissible provided it does
not lead to taking advantage of the oppressed or depressed people. The law must
transform itself to the social awareness. Poverty should not be unduly permitted
to curtail one's right to borrow money on the ground of justice, equity and good
conscience on just terms. If it does, it is bad. Whether it does or does not, must,
however, depend upon the facts and the circumstances of each case". The doctrine
"clog on equity of redemption" was held to be a rule of justice, equity and good
conscience. It must be adopted to the reality of situation and the individuality of
transaction. The court should take note of the time, the condition, the price spiral,
the term bargain and the other obligations in the background of the financial
conditions of the parties. After referring to various judgments of the High Courts
in the country this Court held: "Whether in the facts and the circumstances of these
cases, the mortgage transaction amounted to clog on the equity of redemption, is
a mixed question of law and fact. Courts do not look with favour at any clause or
stipulation which clogs equity of redemption. A clog on the equity of redemption
is unjust and unequitable. The principles of English law, as we have noticed from
the decision referred to hereinbefore which have been accepted by this Court in
this country, look with disfavour at clogs on the equity of redemption. Section 60
of the Transfer of Property Act, in India, also recognises the same position.

13. It is a right of the mortgagor on redemption, by reason of the very nature of the
mortgage, to get back the subject of the mortgage and to hold and enjoy as he was
entitled to hold and enjoy it before the mortgage. If he is prevented from doing so
or is prevented from redeeming the mortgage, such prevention is bad in law. If he
is so prevented, the equity of redemption is affected by that whether aptly or not,
and it has always been termed as a clog. Such a clog is inequitable. The law does
not countenance it. Bearing the aforesaid background in mind, each case has to be
judged and decided in its own perspective. As has been observed by this Court
that long term for redemption by itself, is not a clog on equity of redemption.
Whether or not in a particular transaction there is a clog on the equity of
redemption, depends primarily upon the period of redemption, the circumstances
under which the mortgage was created, the economic and financial position of the

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 mortgagor, and his relationship vis-à-vis him and the mortgagee, the economic
and social conditions in a particular country at a particular point of time, custom,
if any, prevalent in the community or the society in which the transaction takes
place, and the totality of the circumstances under which a mortgage is created,
namely, circumstances of the parties, the time, the situation, the clauses for
redemption either for payment of interest or any other sum, the obligations of the
mortgagee to construct or repair or maintain the mortgaged property in cases of
usufructuary mortgage, to manage as a matter of prudent management, these
factors must be correlated to each other and viewed in a comprehensive
conspectus in the background of the facts and the circumstances of each case, to
determine whether these are clogs on equity of redemption."

14. It was further held that Section 60 of the Transfer of Property Act confers on
the mortgagor right of redemption which is a statutory right. The right of
redemption is an incident of a subsisting mortgage and it subsists so long as the
mortgage subsists. Whether in a particular case there is any clog on the equity of
redemption, has to be decided in view of the background of a particular case. The
doctrine of clog on equity of redemption has to be moulded in modern conditions.
In this regard the Court held: "It is a settled law in England and in India that a
mortgage cannot be made altogether irredeemable or redemption made illusory.
The law must respond and be responsive to the felt and discernible compulsions
of circumstances that would be equitable, fair and just, and unless there is
anything to the contrary in the statute, law must take congnisance of that fact and
act accordingly. In the context of fast changing circumstances and economic
stability, long term for redemption makes a mortgage an illusory mortgage,
though not decisive. It should prima facie be an indication as to how clogs on
equity of redemption should be judged." 15. In the present case all the courts below
on facts held that the mortgage deed being for a period of 99 years was a clog on
the equity of redemption. Such findings were returned keeping in view the facts
and circumstances of the case and the financial position under which the
mortgagor Shri Prakash Singh was placed at the time of execution of the mortgage
deed on 19.3.1968. The appellants were found to be in an advantageous position
qua the mortgagor. They were also found to be deriving the usufructs of the
mortgaged land for a period of over 26 years at the time of filing of the suit on

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 payment of meager sum of Rs.7,000/- only to the mortgagor. The findings of the
facts returned by the courts below do not require any interference particularly
when the learned counsel appearing for the appellants has not contended that such
findings were perverse or uncalled for or against the evidence. There is no merit
in this appeal which is accordingly dismissed but without any order as to costs.

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 Associated Hotels of India Ltd vs R. N. Kapoor
1959 AIR 1262, 1960 SCR (1) 368

Appeal by special leave from the judgment and order dated the April 29, 1953, of
the Punjab High Court at Simla in Civil Revision No. 761 of 1951, arising out of the
Appellate Order dated October 6, 1951, of the Court of District Judge, Delhi in
Misc. Civil Appeal No. 248 of 1950, against the order of the Rent Controller, Delhi
dated the December 14, 1950. The respondent did not appear. 1959. May 19. 1. S.
K. DAS J.-I have had the advantage and privilege of reading the judgments
prepared by my learned brethren, Sarkar, J., and Subba Rao, J. I agree with my
learned brother Subba Rao, J., that the deed of May 1, 1949, is a lease and not a
licence. I have nothing useful to add to what he has said on this part of the case of
the appellant. On the question of the true scope and effect of s. 2(b) of the Delhi
and Ajmer-Merwara Rent Control Act, (19 of 1947) hereinafter called the Rent
Control Act, I have reached the same conclusion as has been reached by my
learned brother Sarkar, J., namely, that the rooms or spaces let out by the' appellant
to the respondent in the Imperial Hotel, New Delhi, were rooms in a hotel within
the meaning of s. 2(b) of the Rent Control Act; therefore that Act did not apply and
the respondent was not entitled to ask for the determination of fair rent under its
provisions. The reasons for which I have reached that conclusion are somewhat
different from those of my learned brother, Sarkar J., and it is, therefore, necessary
that I should state the reasons in my own words. I read first s. 2(b) of the Rent
Control Act so far as it is relevant for our purpose: "S. 2. In this Act, unless there is
anything repugnant in the subject or context,- (a)..................................... (b)
'premises' means any building or building which is, or is intended to be, let for use
as a residence or for commercial any other purpose......... but does not include a
room in a dharamshala, hotel or lodging house." The question before us is-what is
the meaning of the expression 'a room in a, hotel? Does it merely mean a room
which in a physical sense is within a building or part of a building used as a hotel;
or does it mean something more, that is the room itself is not' only within a hotel
in a physical sense but is let out to serve what are known as 'hotel purposes'? If a
strictly literal construction is adopted, then a room in a hotel or dharamshala or
lodging house means merely that the room is within, and part of, the building
which is used as a hotel, dharamshala or lodging house. There may be a case where

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 the entire building is not used as a hotel, dharamshala or lodging house, but only
a part of it so used. In that event, the hotel, lodging house or dharamshala will be
that part of the building only which is used as such, and any room therein will be
a room in a hotel, dharamshala or lodging house. Rooms outside that part but in
the same building will not be rooms in a hotel, dharamshala or lodging house.
Take, however, a case where the room in question is within that part of the
building which is used as a hotel, dharamshala or lodging house, but the room is
let out for a purpose totally unconnected with that of the hotel, lodging house or
dharamshala as the case may be. Will the room still be a room in a hotel, lodging
house or dharamshala? That I take it, is the question which we have to answer.

2. The word 'hotel' is not defined in the Rent Control Act. It is defined in a cognate
Act called the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
(Bom. 57 of 47). The definition there says that a hotel or lodging house means a
building or a part of a building where lodging with or without board or other
service is provided for a monetary consideration. I do not pause here to decide
whether that definition should be adopted for the purpose of interpreting s. 2(b)
of the rent Control Act. It is sufficient to state that in its ordinary connotation the
word 'hotel' means a house for entertaining strangers or travellers: a place where
lodging is furnished to transient guests as well as one where both lodging and
food or other amenities are furnished. It is worthy of note that in a. 2(b) of the Rent
Control Act three different words are used 'hotel', dharamshals' or 'lodging house'.
Obviously, the three words do not mean the same establishment. In the cognate
Act, the Bombay Rents Hotel and Lodging House Rates Control Act, 1947,
however, the definition clause gives the same meaning to the words 'hotel' and
lodging house'. In my view s. 2(b) of the Rent Control Act by using two different
words distinguishes a hotel from a lodging house in some respects and indicates
that the former is an establishment where not merely lodging but some other
amenities are provided. It was, however, never questioned that the Imperial Hotel,
New Delhi, is a hotel within the meaning of that word as it is commonly
understood, or even as it is defined in the cognate Act. Passing now from
definitions which are apt not to be uniform, the question is whether the partitioned
spaces in the two cloak rooms let out to the respondent were rooms in that hotel.
In a physical sense they were undoubtedly rooms in that hotel. I am prepared,

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 however to say that a strictly literal construction may not be justified and the word
'room' in the composite expression 'room in a hotel' must take colour from the
context or the collocation of words in which it has been used; in other words, its
meaning should be determined noscitur a sociis. The reason why I think so may
be explained by an illustration. Suppose there is a big room inside a hotel; in a
physical sense it is a room in a hotel, but let us suppose that it is let out, to take an
extreme example, as a timber godown. Will it still be a room in a hotel, though in
a physical sense it is a room of the building which is used as a hotel? I think it
would be doing violence to the context if the expression 'room in a hotel' is
interpreted in a strictly literal sense. On the view which I take a room in a hotel
must fulfil two conditions: (1) it must he part a hotel in the physical sense and (2)
its user must be connected with the general purpose of the hotel of which it is a
part. In the case under our consideration the spaces were let out for carrying on
the business of a hair dresser. Such a business I consider to be one of the amenities
which a modern hotel provides. The circumstance that people not resident in the
hotel might also be served by the hair dresser does not alter the position; it is still
an amenity for the residents in the hotel to have a hair dressing saloon within the
hotel itself. A modern hotel provides many' facilities to its residents; some hotels
have billiard rooms let out to a private person where residents of the hotel as also
non- residents can play billiards on payment of a small fee; other hotels provide
post office and banking facilities by letting out rooms in the hotel for that purpose.
All these amenties are connected with the hotel business and a barber's shop
within the hotel premises is no exception. These are my reasons for holding that
the rooms in question were rooms in a hotel within the meaning of s. 2 (b) of the
Rent Control Act, 1947, and the respondent was not entitled to ask for fixation of
fair or standard rent for the same. 1, therefore, agree with my learned brother
Sarkar, J., that the appeal should be allowed, but in the circumstances of the case
there should be no order for costs. SARKAR J.-The appellant is the proprietor of
an hotel called the Imperial Hotel which is housed in a building on Queensway,
New Delhi. R. N. Kapoor, the respondent named above who is now dead, was the
proprietor of 'a business carried on under the name of Madam Janes. Under an
agreement with the appellant, he came to occupy certain spaces in the Ladies' and
Gents' cloak rooms of the Imperial Hotel paying therefore initially at the rate of
Rs. 800 and subsequently Rs. 700, per month.

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 4. On September 26, 1950, R. N. Kapoor made an application under s. 7(1) of the
Delhi and Ajmere-Merwara Rent Control Act, 1947 (19 of 1947), to the Rent
Controller, New Delhi, alleging that he was a tenant of the spaces in the cloak
rooms under the appellant and asking that standard rent might be fixed in respect
of them. The appellant opposed the application, contending for reasons to be
mentioned later, that the Act did not apply and no standard rent could be fixed.
The Rent Controller however rejected the appellant's contention and allowed the
application fixing the standard rent at Rs. 94 per month. On appeal by the
appellant,. the,District Judge of Delhi If set aside the order of the Rent Controller
and dismissed the application. R. N. Kapoor then moved the High Court in
revision. The High Court set aside the order of the District Judge and restored that
of the Rent Controller. Hence, this appeal. We are informed that R. N. Kapoor died
pending the present appeal and his legal representatives have been duly brought
on the record. No one has however appeared to oppose the appeal and we have
not had the advantage of the other side of the case placed before us. As earlier
stated, the appellant contends that the Act does not apply to the present case and
the Rent Controller bad no jurisdiction to fix a standard rent. This contention was
founded on two grounds which I shall presently state, but before doing that I wish
to refer to a few of the provisions of the Act as that would help to appreciate the
appellant's contention.

5. For the purpose of the present case it may be stated that the object of the Act is
to control rents and evictions. Section 3 says that no tenant shall be liable to pay
for occupation of any premises any sum in excess of the standard rent of these
premises. Section 2(d) defines a tenant as a person who takes on rent any promises.
Section 2(b) defines what is a premises within the meaning of the Act and this
definition will have to be set out later because this case largely turns on that
definition. Section 2(c)provides how standard rent in relation to any promises is to
be determined. Section 7 (1) states that if any dispute arises regarding the standard
rent payable for any premises then it shall be determined by the Court. It is under
this section that the application out of which this appeal arises was made, the
Court presumably being the Rent Controller. It is clear from these provisions of
the Act that standard rent can be fixed only in relation to premises as defined in

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 the Act and only a tenant, that is, the person to whom the premises have been let
out, can ask for the fixing of the standard rent. I now set out the definition of "
premises " given in the Act so far as is material for our purposes: "premises" means
any building or part of a building which is or is intended to be let
separately.............. but does not' include a room in a dharamsala, hotel or lodging
house."

6. It is clear from this definition that the Act did not intend to control the rents
payable by and evictions of, persons who take on rent rooms in a dharamsala, hotel
or lodging house. The appellant contends that the spaces are not premises within
the Act as they are rooms in a hotel and so no standard rent could be fixed in
respect of them. Thus the first question that arises in this appeal is the spaces
rooms in a hotel within the definition? If they are rooms in a hotel, clearly no
standard rent could be fixed by the Rent Controller in respect of them.

7. The Act does not define a hotel. That word has therefore to be understood in its
ordinary sense. It is clear to me that the Imperial Hotel is a hotel however the word
may be understood. It was never contended in these proceedings that the Imperial
Hotel was not a " hotel " within the Act. Indeed, the Imperial Hotel is one of the
best known hotels of New Delhi. It also seems to me plain that the spaces are
"rooms ", for, this again has not been disputed in the Courts below and I have not
found any reason to think that they are not rooms.

8. The language used in the Act is “room in a...... hotel". The word “hotel “here
must refer to a building for a room in a hotel must be a room in a building. That
building no doubt must be an hotel, that is to say, a building in which the business
of an hotel is carried on. The language used in the Act would include an room in
the hotel building. That is its plain meaning. Unless there is good reason to do
otherwise, that meaning cannot be departed from. This is the view that the learned
District Judge took. Is there then any reason why the words of the statute should
be given a meaning other than their ordinary meaning? The Rent Controller and
the High Court found several such reasons and these I will now consider.

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 9. The learned Rent Controller took the view that a room in an hotel would be a
room normally used for purposes of lodging and not any room in an hotel. He
took this view because he thought that if, for example, there was a three storeyed
building, the ground floor of which was used for shops and the two upper floors
for an hotel, it could not have been intended to exclude the entire building from
the operation of the Act, and so the rooms on the ground floor would not have
been rooms in an hotel. I am unable to appreciate how this illustration leads to the
conclusion that a room in an hotel contemplated is a room normally used for
lodging. The learned Rent Controller's reasoning is clearly fallacious. Because in a
part of a building there is a hotel, the entire building does not become a hotel.
Under the definition, a part of a building may be a premises and there is nothing
to prevent a part only of a building being a hotel and the rest of it not being one.
In the illustration imagined the ground floor is not a part of the hotel. The
shoprooms in the ground floor cannot for this reason be rooms in a hotel at all. No
question of these rooms being rooms in a hotel normally used for lodging, arises.
We see no reason why a room in a hotel within the Act must be a room normally
used for lodging. The Act does not say so. It would be difficult to say which is a
room normally used for lodging for the hotel owner may use a room in a hotel for
any purpose of the hotel, he likes. Again, it would be an unusual hotel which lets
out its lodging rooms; the usual thing is to give licences to boarders to live in these
rooms.

10. I now pass on to the judgment of the High Court. Khosla, J., who delivered the
judgment, thought that a room in a hotel would be within the definition if it was
let out to a person to whom board or other service was also given. It would seem
that according to the learned Judge a room in an hotel within the Act is a room let
out to a guest in an hotel, for only a guest bargains for lodging and food and
services in an hotel. But the section does not contain words indicating that this is
the meaning contemplated. In defining a room in a hotel it does not circumscribe
the terms of the letting. 'If this was the intention,' the tenant would be entirely
unprotected. Ex hypothesi he would be outside the protection of the Act. Though
he would be for all practical purposes a boarder in an hotel, the would also be
outside the protection of the cognate Act, The Bombay Rents, Hotels and Lodging
House, Rates Control Act, 1947 (Bom. 57 of 1947), which has been made applicable

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 toDelhi, for that Act deals with lodging rates in an hotel which are entirely
different from rents payable when hotel rooms are let out. A lodger in an hotel is
a mere licensee and not a tenant for " there is involved in the term "lodger" that the
man must lodge in the house of another "; see Foa on Landlord and Tenant (8th
Ed.) p. 9. It could hardly have been intended to leave a person who is practically a
boarder in a hotel in that situation. As I have earlier said, it would be a most
unusual hotel which lets out its rooms to a guest, and the Act could not have been
contemplating such a thing. Khosla, J., also said that the room in a hotel need not
necessarily be a bed room but it must be so intimately connected with the hotel as
to be a part and parcel of it, that it must be a room which is an essential amenity
provided by an hotel e.g., the dining room in an hotel. I am unable to agree. I do
not appreciate why any room in an hotel is not intimately connected with it, by
which apparently is meant, the business of the hotel. The business of the hotel is
carried on in the whole building and therefore in every part of it. It would be
difficult to say that one part of the building is more intimately connected with the
hotel business than another. Nor do I see any reason why the Act should exempt
from its protection a part which is intimately connected as it is said, and which
confess I do not understand, and not a part not so intimately connected. I also do
not understand what is meant by saying that a part of an hotel supplies essential
amenities. The idea of essentiality of an amenity is so vague as to be unworkable.
This test would introduce great uncertainty in the working of the Act which could
not have been intended. Nor do I see any reason why the Act should have left out
of its protection a room which is an essential amenity of the hotel and not other
rooms in it.

11. Though it is not clear, it may be that Khosla J., was thinking that in order that
a room in an hotel may be within the definition it must be let out for the purposes
of the hotel. By this it is apparently meant that the room must be let out to supply
board or give other services to the guests, to do which are the purposes of an hotel.
Again, I find no justification for the view. There is nothing in the definition about
the purposes of the letting out. Nor am I aware that hotel proprietors are in the
habit of letting out portions of the hotel premises to others for supplying board
and services to the guests in the hotels. It may be that an hotel proprietor grants
licences to contractors to use parts of his premises to provide board and services

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 to the guests in the hotel. This however is a different matter and with such licences
we are not concerned. Again, a proprietor of a different kind of business who lets
out a portion of his business premises for the purposes of his business does not get
an exemption from the operation of the Act. I am unable to see why the proprietor
of a hotel business should have special consideration. The Act no doubt exempts a
room in a hotel but it says nothing about the purposes for which the room must
be let out to get the exemption. Further, not only a room in an hotel is exempted
by the definition but at the same time also a room in a dharamsala. If a room in an
hotel within the Act is a room let out for the purposes of the hotel so must therefore
be a room in a dharamsala, It would however be difficult to see how a room in a
dharamsala can be let out for the purposes of the dharamsala for a dharamsala
does not as a rule supply food or give any services, properly so called.

12. Having given the matter my best consideration I have not been able to find any
reason why the words used in the definition should not have their plain meaning
given to them. I therefore come to theconclusion that a room in an hotel within the
definition is any room in a building in the whole of which the business of an hotel
is run. So understood, the definition would include the spaces in the cloak rooms
of the Imperiol Hotel with which we are concerned. These spaces are, in my view,
rooms in an hotel and excluded from the operation of the Act. The Rent Controller
had no power to fix any standard rent in respect of them.

13.The appellant also contended that Kapoor was not a tenant of the spaces but
only a licensee and so again the Act did not apply. The question so raised depends
on the construction of the written agreement under which Kapoor came to occupy
the spaces and the circumstances of the case. I do not consider it necessary to
express any opinion on this question for this appeal must in my view be allowed
as the spaces are outside the Act being rooms in an hotel. In the result I would
allow the appeal and dismiss the application for fixing standard rent. I do not
propose to make any order for costs.

14. SUBBA RAO J.- I have had the advantage of perusing the judgment of my
learned brother, Sarkar, J., and I regret my inability to agree with him.

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 15. The facts material to the question raised are in a narrow compass. The
appellants, the Associated Hotels of India Ltd., are the proprietors of Hotel
Imperial, New Delhi. The respondent, R. N. Kapur, since deceased, was in
occupation of two rooms described as ladies' and gentlemen's cloak rooms, and
carried on his business as a hair-dresser. He secured possession of the said rooms
under a deed dated May 1, 1949, executed by him and the appellants. He got into
possession of the said rooms, agreeing to pay a sum of Rs. 9,600 a year, i.e., Rs. 800
per month, but later on, by mutual consent, the annual payment was reduced to
Rs. 8,400, i.e., Rs. 700 per month. On September 26, 1950, the respondent made an
application to the Rent Controller, Delhi, alleging that the rent demanded was
excessive and therefore a fair rent might be fixed under the Delhi and Ajmer-
Merwara Rent Control Act, 1947 (19 of 1947), hereinafter called if the Act. The
appellants appeared before the Rent Controller and contended that the Act had no
application to the premises in question at they were premises in a hotel exempted
under s. 2 of the Act from its operation, and also on the ground that under the
aforesaid document the respondent was not a tenant but only a licensee. By order
dated October 24, 1950, the Rent Controller held that the exemption under s. 2 of
the Act related only to residential rooms in a hotel and therefore the Act applied
to the premises in question. On appeal the District Judge, Delhi, came to a contrary
conclusion; he was of the view that the rooms in question were rooms in a hotel
within the meaning of s. 2 of the Act and therefore the Act had no application to
the present case. Further on a construction of the said document, he held that the
appellants only permitted the respondent to use the said two rooms in the hotel,
and; therefore, the transaction between the parties was not a lease but a licence.
On the basis of the aforesaid two findings, he came to the conclusion that the Rent
Controller had no jurisdiction to fix a fair rent for the premises. The respondent
preferred a revision against the said order of the District Judge to the High Court
of Punjab at Simla, and Khosla, J., held that the said premises were not rooms in a
hotel within the meaning of s. 2 of the Act and that the document executed between
the parties created a lease and not a licence. On those findings, he set aside the
decree of the learned District Judge and restored the order of the Rent Controller.
The present appeal was filed in this Court by special leave granted to the
appellants on January 18, 1954.

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 16.The learned Solicitor-General and Mr. Chatterjee, who followed him, contended
that the Rent Controller had no jurisdiction to fix a fair rent under the Act in regard
to the said premises for the following reasons: (1) The document dated May 1,
1949, created a relationship of licensor and licensee between the parties and not
that of lessor and lessee as held by the High Court; and (2) the said rooms were
rooms in a hotel within the meaning of s. 2 of the Act, and, therefore, they were
exempted from the operation. of the Act. Unfortunately, the legal representative
of the respondent was ex parte and we did not have the advantage of the opposite
view being presented to us. But we have before us the considered judgment of the
High Court, which has brought out all the salient points in favour of the
respondent, The first question turns upon the true construction of the document
dated May, 1, 1949, whereunder the respondent was put in possession of the said
rooms. As the argument turns upon the terms of the said document it will be
convenient to read the relevant portions thereof. The document is described as a
deed of licence and the parties are described as licensor and licensee. The preamble
to the document runs thus : " Whereas the Licensee approached the Licensor
through their constituted, Attorney to permit the Licensee to allow the use and
occupation of space allotted in the Ladies and Gents Cloak Rooms, at the Hotel
Imperial, New Delhi, for the consideration and on terms and conditions as
follows:-" The following are its terms and conditions: 1. In pursuance of the said
agreement, the Licensor hereby grants to the Licensee, Leave and License to use
and occupy the said premises to carry on their business of Hair Dressers from 1st
May, 1949 to 30th April, 1950. 2. That the charges of such use and occupation shall
be Rs. 9,600 a year payable in four quarterly installments i.e., 1st immediately on
signing the contract, 2nd on the 1st of August, 1949, 3rd on the 1st November, 1949
and the 4th on the 1st February, 1950, whether the Licensee occupy the premises
and carry on the business or not. 3. That in the first instance the Licensor shall
allow to the Licensee leave and license to use and occupy the said premises for a
period of one year only. 4. That the licensee shall have the opportunity of further
extension of the period of license after the expiry of one year at the option of the
licensor on the same terms and conditions but in any case the licensee shall
intimate their desire for an extension at least three months prior to the expiry of
one year from the date of the execution of this DEED. 5. The licensee shall use the
premises as at present fitted and keep the same in good condition. The licensor

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 shall not supply any fitting or fixture more then what exists in the premises for the
present. The licensee will have their power and light meters and will pay for
electric charges. 6. That the licensee shall not make any alterations in the premises
without the prior consent in writing from the licensor. 7. That should the licensee
fail to pay the agreed fee to the licensor from the date an d in the manner as agreed,
the licensor shall be at liberty to terminate this DEED without any notice and
without payment of any compensation and shall be entitled to charge interest at
12% per annum on the amount remaining unpaid.

17.. That in case the licensee for reasons beyond their control are forced to close
their business in Delhi, the licensor agrees that during the remaining period the
license shall be transferred to any person with the consent and approval of the
licensor subject to charges so obtained not exceeding the monthly charge of Rs.
800." 18. The document no doubt uses phraseology appropriate to a licence. But it
is the substance of the agreement that matters and not the form, for otherwise
clever drafting can camouflage the real intention of the parties. What is the
substance of this document? Two rooms at the Hotel Imperial were put in
possession of the respondent for the purpose, of carrying on his business as hair-
dresser from May 1, 1949. The term of the document was, in the first instance, for
one year, but it might be renewed. The amount payable for the use and occupation
was fixed in a sum of Rs. 9,600 per annum, payable in four instalments. The
respondent was to keep the premises in good condition; He should pay for power
and electricity. He should not make alterations in the premises without the consent
of the appellants. If he did not pay the prescribed amount in the manner agreed
to, he could be evicted therefrom without notice, and he would also be liable to
pay compensation with interest. He could transfer his interest in the document
with the consent of the appellants. The respondent agreed to pay the amount
prescribed whether he carried on the business in the premises or not. Shortly
stated, under the document the respondent was given possession of the two rooms
for carrying on his private business on condition that he should pay the fixed
amount to the appellants irrespective of the fact whether he carried on his business
in the premises or not.

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 19. There is a marked distinction between a lease and a licence. Section 105 of the
Transfer of Property Act defines a lease of immoveable property as a transfer of a
right to enjoy such property made for a certain time in consideration for a price
paid or promised. Under s. 108 of the said Act, the lessee is entitled to be put in
possession of the property. A lease is therefore a transfer of an interest in land. The
interest, transferred is called the leasehold interest. The lessor parts with his right
to enjoy the property during the term of the lease, and it follows from it that the
lessee gets that right to the exclusion of the lessor. Whereas s. 52 of the Indian
Easements Act defines a licence thus: "Where one person grants to another, or to a
definite number of other persons, a right to do or continue to do in or upon the
immoveable property of the grantor, something which would, in the absence of
such right, be unlawful, and such right does not amount to an easement or an
interest in the property, the right is called a licence."

20. Under the aforesaid section, if a document gives only a right to use the
property in a particular way or under certain terms while it remains in possession
and control of the owner thereof, it will be a licence. The legal possession,
therefore, continues to be with the owner of the property, but the licensee is
permitted to make use of the premises for a particular purpose'. But for the
permission, his occupation would be unlawful. It does not create in his favour any
estate or interest n the property. There is, therefore, cleat distinction between the
two concepts. The dividing line is clear though sometimes it becomes very thin or
even blurred. At one time it was thought that the test of exclusive possession was
infalliable and if a person was given exclusive possession of a premises, it would
conclusively establish that he was a lessee. But there was a change and the recent
trend of judicial opinion is reflected in Errington v. Errington, [1952] 1 All E.R. 149.
wherein Lord Denning reviewing the case law on the subject summarizes the
result of his discussion thus at p. 155: "The result of all these cases is that, although
a person who is let into exclusive possession is prima facie, to be considered to be
tenant, nevertheless he will not be held to be so if the circumstances negative any
intention to create a tenancy."

21. The Court of Appeal again in Cobb v. Lane [1952] 1 All E.R. 1199 considered
the legal position and laid down that the intention of the parties was the real test

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 for ascertaining the character of a document. At p. 1201, Somervell. L. J, stated:
"................ the solution that would seem to have been found is, as one would
expect, that it must depend on the intention of the parties." Denning, L. J., said
much to the same effect at p. 1202: "The question in all these cases is one of
intention: Did the circumstances and the conduct of the parties show that all that
was intended was that the occupier should have a personal privilege with no
interest in the land?” The following propositions may, therefore, be taken as well-
established: (1) To ascertain whether a document creates a licence or lease, the
substance of the document must be preferred to the form ; (2) the real test is the
intention of the parties-whether they intended to create a lease or a licence; (3) if
the document creates an interest in the property, it is a lease; but, if it only permits
another to make use of the property, of which the legal possession continues with
the owner, it is a licence; and (4) if under the document a party gets exclusive
possession of the property, prima facie, he is considered to be a tenant; but
circumstances may be established which negative the intention to create a lease.
Judged by the said tests, it is not possible to hold that the document is one of
licence. Certainly it does not confer only a bare personal privilege on the
respondent to make use of the rooms. It puts him in exclusive possession of them,
untrammelled by the control and free from the directions of the appellants. The
covenants are those that are usually found or expected to be included in a lease
deed. The right of the respondent to transfer his interest under the document,
although with the consent of the appellants, is destructive of any theory of licence.
The solitary circumstance that the rooms let out in the present case are situated in
a building wherein a hotel is run cannot make any difference in the character of
the holding. The intention of the parties is clearly manifest, and the clever
phraseology used or the ingenuity of the document- writer hardly conceals the
real intent. I, therefore, hold that under the document there was transfer of a right
to enjoy the two rooms, and, therefore, it created a tenancy in favour of the
respondent.

22. The next ground turns upon the construction of the provisions of s. 2 of the Act.
Section 2(b) defines the term " premises and the material portion of it is as follows:
" Premises means any building or part of a building which is, or is intended to be,

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 let separately. but does not include a room in a, dharmashala, hotel or lodging
house."

23. What is the construction of the words “a room in a hotel “? The object of the
Act as disclosed in the preamble is “to provide for the control of rents and evictions
and for the lease to Government of premises upon their becoming vacant, in
certain areas in the 49 Provinces of Delhi and Ajmer-Merwara". The Act was,
therefore, passed to control exorbitant rents of buildings prevailing in the said
States. But s. 2 exempts a room in a hotel from the operation of the Act. The reason
for the exemption may be to encourage running of hotels in the cities, or it may be
for other reasons. Whatever may be the object of the Act, the scope of the
exemption cannot be enlarged so as to limit the operation of the Act. The
exemption from the Act is only in respect of a room in a hotel. The collocation of
the words brings out the characteristics of the exempted room. The room is part of
a hotel. It partakes its character and does not cease to be one after it is let out. It is,
therefore, necessary to ascertain the meaning of the word "hotel". The word “hotel
" is not defined in the Act. A hotel in common parlance means a place where a
proprietor makes it his business to furnish food or lodging, or both to travellers or
other persons. A building cannot be run as a hotel unless services necessary for the
comfortable stay of lodgers and boarders are maintained. Services so maintained.
vary with the standard of the hotel and the class of persons to which it caters; but
the amenities must have relation to the hotel business. Provisions for heating or
lighting, supply of hot water, sanitary arrangements, sleeping facilities, and such
others are some of the amenities a hotel offers to its constituents. But every amenity
however remote and unconnected with the business of a hotel cannot be described
as service in a hotel. The idea of a hotel can be better clarified by illustration than
by definition and by giving examples of what is a room in a hotel and also what is
not a room in a hotel. (1) A owns a building in a part whereof he runs a hotel but
leases out a room to B in the part of the building not used as hotel; (2) A runs a
hotel in the entire building but lets out a room to B for a purpose unconnected with
the hotel business; (3) A runs a hotel in the entire building and lets out a room to
B for carrying on his business different from that of a hotel, though incidentally
the inmates of the hotel take advantage of it because of its proximity; (4) A lets out
a room in such a building to another with an express condition that he should cater

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 only to the needs of the inmates of the hotel; and (5) A lets out a room in a hotel to
a lodger, who can command all the services and amenities of a hotel. In the first
illustration, the room has never been a part of a hotel though it is part of a building
where a hotel is run. In the second, though a room was once part of a hotel, it
ceased to be one, for it has been let out for a non-hotel purpose. In the fifth, it is let
out as part of a hotel, and, therefore, it is definitely a room in a hotel. In the fourth,
the room may still continue as part of the hotel as it is let out to provide an amenity
or service connected with the hotel. But to extend the scope of the words to the
third illustration is to obliterate the distinction between a room in a hotel and a
room in any other building. If a room in a building, which is not a hotel but
situated near a hotel, is let out to a tenant to carry on his business of a hair-dresser,
it is not exempted from the operation of the Act. But if the argument of the
appellants be accepted, if a similar room in a building, wherein a hotel is situated
is let out for a similar purpose, it would be exempted. In either case, the tenant is
put in exclusive possession of the room and he is entitled to carry on his business
without any reference to the activities of the hotel. Can it be said that there is any
reasonable nexus between the business of the tenant and that of the hotel. The only
thing that can be said is that a lodger in a hotel building can step into the saloon
to have a shave or haircut. So too, he can do so in the case of a saloon in the
neighbouring house. The tenant is not bound by the contract to give any
preferential treatment to the lodger. He may take his turn along with others, and
when he is served, he is served not in his capacity as a lodger but as one of the
general customers. What is more, under the document the tenant is not even
bound to carry on the business of a hair-dresser. His only liability is to pay the
stipulated amount to the landlord. The room, therefore, for the purpose of the Act,
ceases to be a part of the hotel and becomes a place of business of the respondent.
As the rooms in question were not let out as part of a hotel or for hotel purposes,
I must hold that they are' not rooms in a hotel within the meaning of s. 2 of the
Act.

24. In this view, the appellants are not exempted from the operation of the Act. The
judgment of the High Court is correct. The appeal fails and is dismissed. ORDER
In accordance with the opinion of the majority, the appeal is allowed. No order as
to costs.

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 Quality Cut Pieces And Etc. vs M. Laxmi And Co.
AIR 1986 Bom 359, 1984 (2) BomCR 788

JUDGMENT V.V. Vaze, J. Summer of 42. The city of Bombay was slowly
recovering from the erosion of war economy. Serpentine queues for essential
commodities were seen everywhere. The mighty arch of yellow basalt hautily
thrusting its frame above the promontory lapped by the waters of Bay of Bombay
had witnessed the entry of many an Englishman--Administrators, Governors-
General, dashing blades or humble quill-drivers coming to India to keep Pax
Britannica. That very arch was soon to serve as their exit.

2. A group of seven businessmen drawn from various fields like pharmaceuticals,

textiles, tea, banking and insurance got together and surveyed the Indian
economic scene. They had a vision of a possible cooperation of Indian and foreign
entrepreneurs in the field of supply of essential commodities for civilian
consumption something which was very much relegated to the background by the
more pressing need to keep the sinews of war flowing. They envisaged a free flow
of goods and merchandise once the sea routes became open; took note of the fact
that manufacturers in western countries had at their disposal large departmental
chain stores to handle goods direct from the factory to the consumer and managed
country-wide distribution system. This group regretted the absence of a similar
large scale departmental store in India and decided to remedy the defect and build
up a co-ordinated contact between the producer and consumer. With this object in
view, the group incorporated a company "Departmental Service Stores Limited"
("DSS").

3. The company could not function in view of the prohibition regarding the issue
of shares under Rule 94A of the Defence of India Rules, without the sanction of the
Examiner of Capital Issues. This sanction was granted on 15th Nov. 1943
authorising the company to raise capital of the value of Rs. 1,62,000/- under certain
conditions. The hurdle of the Defence of India Rule was crossed and capital was
raised. Having realised the capital by allotting shares to those who had applied
before 17th May 1943, the company had money but no premises wherein to start
the contemplated departmental stores. The company was all dressed up but had

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 nowhere to go. On 8th Sept. 1944 the company acquired the house of Messrs.
Dinshaw and Company, Colaba, Causeway, Bombay, from one Behram Rustom
Irani, after paying Rs. 47,000/-out of which Rs. 4,000/- were towards the goodwill
and the remainder towards the price of goods, electrical installations, type-writers
etc. A store was started in the premises of Dinshaw and Co., for the 10 months
ending 30th June 1945, DSS made a modest profit of Rs. 6,485-2-11 Ps. 4. The
Examiner of Capital Issues permitted the company to issue further shares of capital
of the value of Rs. 8,30,000/-. The signatories to the Memorandum and Articles of
Association, the Directors, Managing Agents and their friends agreed to take a
bulk of the new issue and remainder was offered for public subscription. Messrs.
Begman Traders Ltd. of 41, Bruce Street, Fort, Bombay, were the Managing Agents
of the company and Bagayatkar and Manjrekar of Bombay were ex-officio
Directors nominated by the Managing Agents. The Prospectus issued by the
company inviting subscription from the public, after taking a note of the possible
increase in international trade on account of the opening of free sea routes,
announced that the DSS will inaugurate a new era of "Shop as you please" under
one roof and thereby obviate the necessity of standing in long queues and hunting
for different goods and shops situated in far flung localities. The ambitious
prospectus projected a picture of a store where a person can buy all his needs "from
a pin to a piano" and that too with home delivery facilities. Twelve Departments
were enumerated as being the ones which would be immediately opened in the
stores and it was indicated that the DSS would further diversify their activities into
thirty more Departments ranging from motor-cars, engineering goods, type
writers, jewellery to flowers. By way of a foot note DSS promised that departments
of refreshments, decoration and art gallery will follow after a while. 5. Regarding
the mechanics of running the stores, the prospectus proclaimed that the DSS shall
bring together manufacturers under one roof and the concept being of
cooperation, a selected group of merchants dealing in various types of
merchandise were to be provided with facilities and accommodation in the store
"for the display and sale of their goods, under the supervision and general
management of the company". The promotors felt that this would save the
merchants good deal of overhead charges and exorbitant shop rents.

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 6. The projection of the Directors was that the income to the company from the
Departments will be "the commission ranging from 2.1/2% to 15% or more"
according to the nature of the commodities sold, and that many leading merchants
in various lines had already expressed their willingness to avail themselves of this
facility. The promoters announced that the DSS enjoyed the confidence of leading
merchants "who had agreed to leave in their control their goods worth thousands
of rupees for display and sale on retail and wholesale basis".

7. The permission granted by the Controller for issue of the balance of the
originally issued share capital of Rs. 10,00,000/-"created a problem of securing
suitable premises at a suitable place, when for love or money even small premises
were not available in Bombay". As the report for the Year ending 30th June, 1946
suggests, the Directors were "fortunate in securing an ideal structure and land in
an ideal locality at Dadar a most central place in Greater Bombay." (After stating
facts in paras 8 to 45, His Lordship proceeded --Ed) 8 to 45. x x x x x x x x x x x
Lease or Licence? 46. The tests to be applied in order to find out whether a
particular document operates as a lease or a licence have been crystallised by the
Supreme Court in Sohanlal Naraindas v. Laxmidas Raghunath, 1971 Mah LJ 604,
at p. 607 : "Intention of the parties to an instrument must be gathered from the
terms of the agreement examined in the light of the surrounding circumstances.
The description given by the parties may be evidence of the intention but is not
decisive. Mere use of the words appropriate to the creation of a lease will not
preclude the agreement operating as a licence. A recital that the agreement does
not create a tenancy is also not decisive. The crucial test in each case is whether the
instrument is intended to create or not to create an interest in the property the
subject-matter of the agreement. If it is in fact intended to create an interest in the
property it is a lease, if it does not, it is a licence. In determining whether the
agreement creates a lease or a licence the test of exclusive possession, though not
decisive, is of significance. Mrs. M.N. Clubwala v. Fida Hussain Saheb, 47. During
the war and in the post-war period, the freedom of parties to enter into a lease and
the licencee's rights to sublet the premises were seriously curtailed by the various
Rent Control Acts. Section 15 of Bombay Rents, Hotel and Lodging House Rates
Control Act, 1947 ("Rent Act") puts an embargo on the tenant to sublet, assign or
transfer his interest in the premises let out to him, Hence, the first question that

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 arises for determination is whether the parties could "contract out" of the
provisions of the regulatory legislation pertaining to urban tenancies? 48. In Sheel-
Mex and B.P. Ltd. v. Manchester Garages Ltd., (1971) 1 All ER 841 the plaintiffs
were the owners of a petrol filling station. They allowed the defendants to go into
occupations of the premises by an agreement contained in a document called a
licence. By the terms of the agreement, it was expressed to be solely for the purpose
of selling the plaintiffs' brands of motor fuel and the defendants had agreed to
promote the sale of the plaintiffs' products. As differences arose between the
parties, the plaintiffs asked the defendants to leave when the agreement expired
upon which the latter claimed that the agreement gave them a tenancy and they
are entitled to protection of the (U.K.) Landlord and Tenant Act, 1954. The
defendants relied heavily on the fact that they were in exclusive possession of the
petrol filling station. Lord Denning dismissed this ground: "..... counsel for the
defendants says that the defendants have exclusive possession, and that that
carries with it a tenancy. That is old law which is now gone. As I have said many
times, exclusive possession is no longer decisive. We have to look at the nature of
the transaction to see whether it is a personal privilege, or not....." Next the Counsel
argued that it would not be permissible for the parties to "get out" of the Landlord
and Tenant Act, 1954. Repelling this argument, Lord Denning said (at p. 844): "It
seems to me that when the parties are making arrangements for a filling station,
they can agree either on a licence or a tenancy. If they agree on a licence, it is easy
enough for their agreement to be put into writing, in which case the licensee has
no protection under the Landlord and Tenant Act, 1954. But, if they agree on a
tenancy, and so express it, he is protected. I realise that this means that the parties
can agreeing on a licence, get out of the Act; but so be it; it may be no bad thing....."
49. The stall-holders in the present batch-appeals have branded the agreements
with DSS etc. as 'Sham and bogus'. Such an argument was advanced in Somma v.
Hazelhurst, (1978) 2 All ER 1011 where it was urged that in a "Rent Act situation"
any permission to occupy the premises exclusively must be a tenancy and not a
licence, unless it comes into the category of hotels, hostels, family arrangements or
service occupancy of a similar undefined special category. Dismissing the
contention, the Court observed (at p. 1020): ".....We can see no reason why an
ordinary landlord not in any of these special categories should not be able to grant
a licence to occupy an ordinary house. If that is what both he and the licensee

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 intend and if they can frame any written agreement in such a way as to
demonstrate that it is not really an agreement for a lease masquerading as a licence,
we can see no reason in law or justice why they should be prevented from
achieving that object. Nor can we see why their common intentions should be
categorised as bogus or unreal or as sham merely on the grounds that the Court
disapproves of the bargain." The Court approved the observations of Backely LJ in
Shell-Mex and B.P. Ltd. v. Manchester Garages Ltd. case (supra)-- "and it may be
that this is a device which has been adopted by the plaintiffs to avoid possible
consequences of the Landlord and Tenant Act, 1954, which would have affected
the transaction being one of landlord and tenant, but in my judgment one cannot
take that into account in the process of construing such a document to find out
what the true nature of the transaction is. One has first to find out what is the true
nature of the transaction and then see how the Act operates on the state of affairs,
if it bites at all. One should not approach the problem with a tendency to attempt
to find a tenancy because unless there is a tenancy the case will escape the effects
of the statute." 50. The observations in a New Zealand decision Donald v.
Baldwyn, (1953) NZLR 313 at p. 321) were also approved: "The law will not be
hoodwinked by shams: but real and lawful intentions cannot be dismissed as
shams merely because they are disliked. It is a sham to say one thing while really
intending another; but the Court cannot say that a licence is a sham for the reason
that the Court thinks the parties ought to have intended a tenancy.” 51. "Why so
large cost, having so short a lease, Dost thou upon thy fading mansion spend?" So
asked Shakespeare in his early Sonnet 146. 52. DSS had taken the suit property
from Ashar for a short lease of 10 years from 1-6-1946 to 31-5-1956. It had only one
option of renewal for a further period of 10 years. All the same, in spite of
dwindling finances, DSS constructed a building worth Rs. 1,51,585/-, furnished the
same with furniture and fittings costing Rs. 1,32,768/- and installed electrical
fittings worth Rs. 22,641/-. The property purchased by Ashar was an old godown
of a mill; will a lessee of Ashar incur a 'large cost' of Rs. 2,00,000/- upon a 'fading
godown' if he was only to sublet the same? 53. Exh. Z-196 dt. 20-6-1952 is a typical
agreement which DSS used to enter into with the merchants. The preamble states
that the merchant "Soni Watch Co." in this case, had applied to DSS "to stock,
display and sell his goods through DSS" and that the merchant shall sell the goods
at ruling market rates. DSS shall try to obtain licences and permits, if necessary, in

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 its own name, but DSS will be free to do business in the same or similar articles in
the stores. The merchant had agreed to deposit by way of guarantee a sum of Rs.
1,000/- for a stall admeasuring about 120 Sq. ft. which was to bear interest at 3.50
per cent per annum. The merchant was to be provided by DSS with a stall complete
with fittings and furnitures, provide his own cash memo, maintain a stock book
and submit to the DSS monthly statement of accounts on or before the 5th of the
following month. The ownership of the goods was to remain with the merchant.
DSS were entitled to receive a minimum "share, remuneration or commission" at
the rate of Rs. 135/- per stall or Rs. 250/- for two stalls or to "the share, remuneration
or commission" at the rate of two per cent on the gross sale proceeds, exclusive of
sales tax, whichever is more. The agreement was to remain in force for one year
from 13-5-1953, but power was given to the Company to terminate the agreement
for breach of the terms. Then follows Clause 34: "The merchant shall have no right
to assign the benefit of this agreement. The merchant is not a tenant of the
Company and on termination of this agreement, he shall have no right to continue
in or use of the premises of the Company". 54. In short, the agreement not only
clearly tells the merchant that he is not a tenant of the stall, but obligates him to
send a statement of accounts so that DSS could work out whether they are entitled
to a commission over and above the minimum agreed upon. 55. On 29-8-1952,
some stall-holders wrote to the Collector of Bombay (Exh. Z-157) in connection
with the notices dt. 26-8-1952 issued by the Collector asking the merchants to pay
the dues. The merchants informed the Collector that with the exception of Dr. D.S.
Patkar (who is not one of the defendants), "all are charged commission on the gross
sale with a certain minimum according to the number of stalls or spaces required
by the individual merchants for trading in the department stores." They referred
to the fact that prior to 1-5-1952, DSS were providing all facilities, such as service
of the boys, delivery of the goods, collection of daily sales, maintenance of stock
book and accounts, supervision, electricity and all other incidental expenses for
which the merchants were paying higher rate of compensation. As one of the share
holders, the letter proceeds, has filed a winding up petition as DSS have changed
their management practices, reduced the amount of deposit and the rate of
commission. The merchants expressed fervent hope that the winding up petition
will be dismissed, but requested the Collector to see that essential services like
watchmen, electricity, etc. are maintained. 56. The earlier letter (Exh. 31) dt. 8-1-

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 1951, by which the merchants had asked the Collector of Bombay to hold DSS
responsible for the sales tax, has already been discussed. Vide Exhibit 'O' dt. 21st
Oct. 1952, DSS told the Collector that except the case of Dr. Patkar, in whose favour
they had created tenancy and whose premises are distinctly separate, all other
persons who are trading with the DSS are not tenants. DSS charges the merchants
certain percentage with a certain fixed minimum on the gross daily sales by way
of Company's commission. The letter goes on to say that the merchants, who
attend the sales, "do so more as the Salesmen of the Company and not in their
capacities as the owners of the goods". None of the merchants have been allowed
to put up sign-boards in his own name. DSS then referred to the case of Mrs. Sarla
Shetty, who was allowed to conduct a tailoring class on leave and licence basis, but
has picked up a quarrel and put up claim for tenancy rights. An attempt was made
by DSS to ask Chinubhai whether the stalls can be let out, so that more money
could be realised and the debt paid off more quickly (Exhibit "R" dt. 30th Oct.
1953). According to Chinubhai he tried to sell this idea to the mortgagees but the
mortgagees did not agree and hence the idea was dropped. 57. The intention of the
parties can be gathered from the surrounding circumstances, and so far as the
present case is concerned, it is not one of a stray occupation by a stranger in a room
in a residential house which may give rise to questions as to whether he was only
a lodger or a boarder or a paying guest or a tenant. This is a case of no less than 47
people taking stalls and carrying on business for a period of over 22 years.
Resultantly the behavioral pattern appearing on a broad canvas stretching over
more than two decades has to be observed. It would make for a better appreciation
of this pattern if the evidence is grouped under various heads. 58. Admittedly,
Laxmi lost possession as a result of Court Decree on 19th Nov. 1968 and it has been
urged by the stall-holders that the space that was allotted to them was in their
exclusive possession, inasmuch as, they had put flap doors and for that purpose
certain photographs were produced. The photographs did show an arrangement
of a plywood shutter capable of being locked. It was also canvassed that there were
rolling shutters to some stalls which would enure for a better locking system. But
P. W. 6 Mahendra, who was commissioned to fix the rolling shutters, had admitted
that the shutters were fixed after 1968 and thus the fixation of rolling shutters loses
its relevance for the purposes of this appeal which deals with a period prior to 19
11-1958. It is now more or less an established fact that none of the stalls had a

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 locking arrangement, for, the space allotted to each merchant was earmarked on
two sides by show-cases placed back-to-back forming the walls and waist high-
counters placed in the front across which the merchants would attend to the
customers formed the third side. 59. As the plan of the building shows, the stores
(with the exception of Stall No. 6 of Nathani who is the Appellant in First Appeal
No. 648 of 1972, and Stall No. 7 of Ramjivandas who is the Appellant in First
Appeal No. 664 of 1972, to whom I would advert later), was like a fort having a
single collapsible steel gate which controlled the ingress and egress. A second
wooden gate was also provided inside the steel collapsible steel gate for greater
security, the space between the two acting as a passage to the stores flanked by
show windows on either sides. While handing over possession to the mortgagees
Shah Brothers, DSS, vide Exhibit 'D' dt. 25th Oct. 1953, talked of giving the keys of
the gates. That is to say, once the gate was locked, it was not possible for anyone
to enter the stores. 60. Such was the control of the management, that the merchants
had to request Ramniklal on 8th July, 1954 (Exh. 'Z-61') that "the stores should be
kept open continuously from 9.00 am. to 8.00 p.m. without the present break of
12.00 a.m. to 3.00p.m. in order to improve the sales and remove the inconvenience
of finding some shelter between 12.00 a.m. (Sic noon) to 3.00 p.m." The
management would close the stores at 12.00 noon, ask all the merchants to clear
out, lock the gates and allow them entry only at 3.00 p.m. 61. The timings of the
stores became the subject-matter of discussion amongst the merchants and the
management, as would be apparent from the perusal of the bunch of letters (Exh.
'Z-61' (Colly.)). When the management conceded to the request of keeping the
stores open non-stop without lunch break, some merchants, on 23-7-1954, wrote
to Ramniklal that they should revert to the old timings as they did not get enough
business to justify putting in extra work of three hours. Some complained that as
the stores caters to office-goers hardly any one comes between 12.00 noon to 3.00
p.m. while others felt that a good number of customers coming from far off places
such as Virar, Kalyan, would be disappointed to find the stores closed between
12.00 noon and 3.00 p.m. The management had the final say in the matter and they
decided on 11th Dec. 1954 that the old timings should be restored. So complete
was the control of Ramniklal over the timings of the stores that on 1st Dec., 1954
he decided that in view of inauguration of the Stainless Steel Department at the
hands of Ashar the paramount landlord, the stores would be opened at 8.00 a.m.

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 Similarly, Ramniklal closed the stores at 10.00 p.m. on 26-10-1954 and asked all the
merchants to bring in 'their account books for a joint Pooja at 10.30 p.m.
Deployment of Staff. 62. If DSS, Ramniklal or Laxmi were only interested in acting
as landlords, nothing would have been easier than to open an account in the
nearest bank and ask the merchants to credit the monthly rent in that account.
There would have been no need to appoint any staff whatsoever, not even a bill
collector. But right from the beginning DSS maintained an office in the stores and
had a number of employees such as watchmen, accountants etc. As an exercise in
business management, DSS, in the year ending 30th June, 1948, had engaged extra
highly qualified and experienced staff of accountants and statisticians so that the
contingency of accumulating large portion of dead stock did not occur. 63. It
appears that Chinubhai used to incur expenditure of about Rs. 5,000/- to Rs. 6,000/-
per annum in inserting advertisements of the stores as a whole. (Exh. 'Z-60') ('Z-
80'). Whenever the stall holders desired that their names should be specificaly
mentioned in the advertisements, Ramniklal used to comply, provided the
particular stall-holder bore half the expenses. For instance, Soni Watch Company
(vide letter -- Exh. 'Z-73') wrote on 11th Nov. 1955 informing Ramniklal that an
expense of Rs. 243-4-0 had been incurred by them in exhibiting cinema slides at
'Chitra', 'Rivoli' and 'Broadway' of Dadar, and claimed reimbursment of half the
cost totalling to Rs. 121-10-0. Another stall-holder Gujar and Company also desired
to boost up the sale of Samson Dresses. They intended to have an advertisement
campaign which would cost him Rs. 60/- and requested Ramniklal to contribute
his share of Rs. 30/-. Ramniklal was issuing calendars showing the name of the
stores, but one Karamshi Monshi, holder of stall No. 26, desired that 500 calendars
should bear his name as well and by a letter (Exh. 'Z-70') dated 3rd Sept. 1956,
agreed to bear expenses for the same. The Merchants' Association by their
Resolution dt. 12-1-1957 decided that the Executive Committee of their Association
should discuss with the management a successful campaign of advertisement and
that the facade of the stores should be given a face lift. The management, vide their
letter dt. 25th March, 1956 (Exh, "Z-60") agreed to share 50/o of the expenses and
invited suggestions and proposals for the construction of the front gate. 64. It
appears that the management gifted a telephone locking device to the customers
as a part of their advertising campaign. 65. The acknowledged leader of the
stallholders Soni, had admitted that the management-used to decorate the stores

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 on festive occasions. 66. In order to promote sales, the management had
announced a 61/4% rebate on 15th Aug. 1957 to customers and the same was
shared by the management. Next year, the merchants again requested the
management on 18-7-1958 (Exh. 'Z-60') (Colly.) that a rebate of 6% should be
allowed to the customers and half the burden of 3% should be borne by the
management. 67. It appears that in spite of advertisement campaign, and all other
steps taken by the management, the sales of the stalls did not pick up appreciably.
A circular was issued by Ramniklal (Exh. 'Z-63') on 3-12-1954 convening a meeting
of the stall-holders with a view to giving rebate in the minimum commission.
Ramniklal made it clear that the rebate in the commission will be granted only to
those merchants who have no outstanding and who would give an undertaking
"to remain in the stores for the next six months". Ultimately, a rebate of 10% was
granted but the circulars issued from time to time (Exh. "Z-63") (Colly.) show that
the merchants were in arrears not only in the payment of their minimum
commission, but also electric charges. The management also offered a heavy
reduction in the minimum commission when the stores was closed for about 10
days during the agitation consequent upon the report of the States Re-organisation
Commission. 68. The merchants used to submit sales statements from time to time
('Exh. "Z-86 to "Z-107") and the recalcitrants amongst them were reminded to
submit statements. 69. By a letter (Exh. "Z-64") dt. 2nd Aug. 1956, Soni requested
permission from Ramniklal to change the merchandise in which they were dealing
till that date, but the management advised him to stock latest popular records of
H.M.V. but did not permit him to deal in watches. 70. One of the tests proposed by
Lord Denning M. R. in Marchant v. Charters, (1977) 3 All ER 918 at p. 922 is "Was
it intended that the occupier should have a stake in the room or did he have only
permission for himself personally to occupy the room, whether under a contract
or not?" Right from the beginning it was the management of the stores which had
a stake not only in the various stalls which they had furnished but also in the sales
of stallholders who were given permission to occupy the same. Some of the stall-
holders like Paradkar (Exh. "Z-74 dt. 4th Oct. 1956) who could not boost their sales,
surrendered their stalls because even the minimum commission was rather too
heavy for them to pay. The advertisement compaign was geared to increase the
sales of the stall-holders so that the management could augment their share of the
commission on the gross sales figures. It was not the stall-holders who had the

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 stake in the stalls but the management who had a stake not only in the stalls and
the entire buildings, but also in the total sales so that they could claim higher
commission. The interest of the stall-holders was not assignable and every time a
new stall-holder was inducted, he was given a fresh permission by the
management. 71. The sapling of a departmental stores nursed under the long
shadows of Macy's and Harrod's did not take roots let alone burgeoing in Dadar
soil. The Dadar housewife was accustomed to visit a row of shop-fronts displaying
sarees when she wanted to buy a saree and was not mentally attuned to visit a
conglomeration of shops selling anything from a pin to a piano. (A white collared
Dadarite anyway preferred to do his Sunday morning riyaz squatting on the floor
with his good old harmonium!). 72. Most of the stall-holders did not do well with
the result that the management had to content itself with the minimum
commission. But Century Mills, who had a stall, showed better performance and
paid the percentage of commission calculated on the basis of sales which was
higher than the minimum agreed upon. After their initial period was over, fresh
negotiations were started with Century and a fresh permission granted to them
under different terms. 73. All the licenced agreements with the stall-holders came
to an end on 31-12-1965 and the surprising feature of this case is that right from
1946 till this date, not a single assertion was made by the stall-holders that they are
tenants. On 1-1-1966, notices of revocation (Exh. "Z 168") (Colly.) were issued by
Laxmi whereafter for the first time' on 10-1-1966, the stall-holders claimed to be
tenants and thus filed the first salvo in this battle. Within a month, they filed suits
on 9-2-1966 (Exh. "Z-201") in the Small Causes Court for obtaining a declaration
that they are the tenants. This long acquiescence of the stallholders lends credence
to the case of the plaintiffs that the stall-holders were merely licensees. 74. The
surrounding circumstances marshalled above like want of facility to
independently lock the stalls, the inability of the stall-holders to enter into the
building or the stores at will, the requirement of having to seek permission of the
management to change the hours of business or effect a change of merchandise,
non-assignability of interest in the stalls, repeated recognition of the agreements
to pay a fixed percentage of commission subject to a minimum with DSS,
Ramniklal and Laxmi, the sale promotion campaigns lodged by DSS, Ramniklal
and Laxmi, the correspondence of the stall-holders with the fiscal authorities
reiterating the commission agreements, the deployment of staff like watchmen;

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 accountants, statisticians by the management to monitor the sales, want of a single
protest by the stall-holders till 10-1-1966 asserting rights of tenancy, submission of
sales statements by the stall-holders to the management and payment of
commission on the turnover higher than the minimum by Century Mills' stall,
unequivocally point out that all of them, with the exception of stall No. 6 of
Nathani and Stall No. 7 of Ramjeevandas were merely licensees for reward. 75. The
cases of Nathani and Ramjeevandas stand on different footing. It is not the case of
Laxmi or their predecessors in interest that they have never given any premises in
the stores on rent. Admittedly, Dr. Patkar who runs a maternity home and others
were tenants. Though exclusive possession alone and by itself is not the acid test
of determination whether the relationship between the parties is that of tenancy or
licence, it assumes importance in the cases of Nathani and Ramjeevandas. Both
these stalls are facing the road and the stall-holders have not to enter the
collapsible gate at all to reach and open their stalls. Surely, these stalls facing the
road could not be kept open as was the practice with the stalls inside the main
gate. The exclusive possession in their case coupled with the fact that there are
other persons who are recognised to be the tenants in the building of the stores, is
a pointer to the fact Laxmi have failed to prove that Nathani and Ramjeevandas
are mere licensees. 76. A feeble attempt has been made by the defendants-stall-
holders to challenge the title of Laxmi to the suit premises and this has been
countered by Laxmi pleading that the stall-holders are estopped from doing so.
As, neither Ashar, nor DSS, nor Shah Brothers, nor Ramniklal are parties to the
present proceedings, and as the suits are simple money suits it is obvious that no
final adjudication can be made regarding the question of title of Laxmi to the suit
premises in these proceedings. That belongs to this Court on its Original Side
where a title suit is pending. Under the first lease Exh. "1", dt. 5th July, 1948, DSS,
the Lessees, had acquired an interest in the premises for a term of 10 years
computed from 1st June 1946 to 31st May 1956 with an option of one renewal. This
option was exercised both by DSS and by Ramniklal. This position was accepted
by Ashar in Exhibits "Z-173' and "Z-58". In Exhibit "Z-186" dt. 6th Sept. 1955 Mulla
have referred to the letters dt. 1st and 2nd Aug. 1955 by which Ramniklal had
purported to exercise option for the renewal of the lease. It is another matter that
Mulla pointed out that rent has not been paid regularly at the rate of Rs. 100/-per
month. On 6th Sept. 1960 that is much after the first period of 10 years was over,

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 the Solicitors of Ashar accused DSS of having committed breaches of certain
covenents of the lease and purported to terminate the same. 77. On 31st May 1956
the 20 year period under the original Lease Deed expired. Admittedly, a registered
Conveyance for the second 10 year period was not executed, but the exchange of
letters, as respects the renewal, would be admissible under the Proviso to Section
49 of the Registration Act for a collateral purpose of showing the nature and
character of possession of Laxmi. Satish Chand Nakhan v. Govardhan Das Byas.
As Laxmi held over and continued in possession by paying rent, the holding over
must be held as a tenancy from month to month. The rent was being received from
Ramniklal but the receipts were being given in the name of DSS. 78. The possession
of Ramniklal and Laxmi was a juridical one and Ramniklal and Laxmi being
persons in juridical possession of the premises, had entered into a contract of
licence permitting the stall-owners to use the premises for display and sale of their
goods in return for a commission computed on the basis of an agreed percentage
of the gross sales. 79. Even before coming into force of the Indian Evidence Act,
1872, this High Court has been following the principle of tenant estoppel. In
Vasudev Daji v. Babaji Ranu, (1871) 8 Bom HCR 175, the Court held that a tenant
cannot ordinarily dispute the title of his landlord in a suit brought against him for
recovery of possession if the existence of a tenancy is established by the fact of the
tenant's payment of rent to his landlord or otherwise. After the coming into force
of the Indian Evidence Act which, in Section 116, incorporated the principle of
estoppel of tenant, the Privy Council, in Kumar Raj Krishna Prosad Lal v. Baraboni
Coal Concern Ltd. , held that Section 116 does not deal with all kinds of estoppel
or occasions of estoppel which might arise between the landlord and the tenant.
80. Though Laxmi had exercised its right of renewal and the paramount landlord
Ashar had agreed to grant the request, the conveyance was not registered as was
contemplated by the original lease deed. Counsel for the Appellants argued that
in the absence of a registered deed, the purported renewal for a fresh period of 10
years is ineffective and neither Ramniklal nor Laxmi could act as landlords and
induct the appellants into the premises either as tenants or as licensees. As
observed earlier, the principle of tenant estoppel is wider than that governed by
the ambit of Section 116 of the Evidence Act and the absence of a registered lease
deed for the renewed period would make no difference as regards the bar of
estoppel against the appellants. In Industrial Properties (Barton Hill) Ltd. v.

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 Associated Electrical Industries Ltd., (1977) 1 QB 580 (CA) though the purchase
price was paid pursuant to an agreement to sell the freehold of an industrial estate,
no conveyance of the property was made in order to save stamp duty and the
premises were leased out to A.E.I. The landlord filed a suit claiming damages
against A.E.I. for breach of covenant to repair the premises and the lessees who by
then had discovered the defect in the title of the landlord, challenged the
maintainability of the suit for damages. Holding that the landlords have become
equitable owners of the premises, the Court found that the tenants are estopped
from challenging the landlords' equitable title, and that this rule of estoppel
continued to operate after the expiry of the lease unless, after the termination of
the lessee's possession a claim was made against him by a title paramount in
respect of some part of the period of the lease. When a valid contract of tenancy
had been created between the parties, the tenant would be estopped under the
contract even though it might be that some other person, for example, the
reminderman or a mortgagee might be able to assert some title paramount against
the tenant who had been given, as between himself and his landlord, a perfectly
valid tenancy. Stratford v. Syrett, (1958) 1 QB 107. Consequently it is obvious that
the stallholders having been inducted into the premises by Laxmi the equitable
owners -- are estopped from challenging its title. 81. Two minor points remained
to be discussed. The first was regarding the maintainability of the suit for which
an argument was advanced that as minors who earlier were admitted to the
benefits of partnership of the plaintiff firm have since become partners, a new
partnership has been formed while the certificate (Exh. "B") showing the entry in
the register of firms deals with the old partnership. The learned trial Judge, after
relying on the case of Bhogilal Laherchand v. Commr. of Income-tax, , has rightly
held that the old partnership continued when a minor son attaining majority elects
to continue as a partner. Secondly, it was argued that in view of Section 15 of the
Bombay Rent Act, the plaintiffs could not acquire any right, title and interest in the
premises. The learned trial Judge, after taking note of the fact that Section 15
operates "subject to any contract to the contrary" has correctly dismissed this
objection holding that the initial lease being Exh. 1 itself permitted transfer
absolutely or by way of mortgage or sub-lease and also subsequent to such
transfer.

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 Capt. B.V.D Souza vs Antonio Fausto Fernandes

AIR 1989 SCR (3) 626

The Judgment of the Court was delivered by SHARMA, J.

1. The only point involved in this appeal is whether the document (Ext. 20) executed
by the parties at the time the appellant was inducted in the disputed premises is
an agreement of leave and licence or a deed of lease. The building belongs to the
respondent, and the appellant claims to be in its occupation as a month to month
tenant. The respondent instituted the suit in the civil court, out of which this
appeal by special leave arises, for a decree for eviction of the appellant alleging
that he has been in occupation of the building as a licensee and has illegally refused
to vacate in spite of service of notice. The appellant's defence is that he is a tenant
protected by the provisions of the Goa, Daman and Diu Buildings (Lease, Rent and
Eviction) Control Act, 1968, and in view of s. 56 there- of the suit in the civil court
is not maintainable. Agreeing with the plaintiff-respondent, the trial court passed
a decree which was confirmed on appeal by the District Judge. The High Court
dismissed the second appeal filed by the appellant observing that it was concluded
by concurrent findings of fact.

2. We do not agree with the High Court that the findings of the courts below were
those of fact so as to be binding on the High Court under s. 100 of the Code of Civil
Proce- dure. The case has to be decided on the nature of possession of appellant
which is dependent on a correct interpretation of the document Ext. 20.

3. The document Ext. 20 has been described as an agreement of leave and licence
and the parties as the Licensor and the Licensee. But it is significant to note that in
the very first sentence of the document the respondent is described as "Landlord
hereinafter called the Licensor". However, this cannot answer the disputed issue
as it is firmly established that for ascertaining whether a document creates a licence
or lease, the substance of the document must be preferred to the form. As was
observed by this Court in Associated Hotels of India Ltd. v .R.N. Kapoor, [1960] 1
SCR 368, the real test is the intention of the parties--whether they intended to
create a lease or licence. If an interest in the property is created by the deed it is a
lease but if the document only permits another person to make use of the property

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 "of which the legal possession continues with the owner", it is a licence. If the party
in whose favour the document is executed gets exclusive possession of the
property, prima facie he must be considered to be a tenant; although this factor by
it self will not be decisive. Judged in this light, there does not appear to be any
scope for interpret- ing Ext. 20 as an agreement of leave and licence.

4. The document has been placed before us by the learned counsel for the
appellant. Although as stated earlier, it has been described as an agreement of
leave and licence and the parties as the "Licensor" and the "Licensee", its provi-
sions unmistakably indicate that the,appellant was being let in as a tenant on the
monthly rental of Rs.350 (besides water and electricity charges) to be paid
regularly on or before the 5th day of each consecutive month. By clause 5, it was
agreed that the appellant "shall not sub-let, under- let or part possession of the
premises to any stranger nor shall he keep the premises vacant for more than 3
months without the consent of the Licensor", that is, the respondent. The question
of executing a sub-lease or subletting can arise only by a tenant. If a licensee
inducts any person in the property as his tenant, it cannot be described as sub-
letting. In clause 15 it is stated that on the expiry of the period, the deed "shall be
renewable thereafter at the will of the licensee"; and in the event of the licensee not
desiring to renew, "shall give one month's notice in writ- ing". These terms are not
consistent with the respondent's case of licence, and indicate that an interest in the
property was created in favour of the appellant in pursuance of which he was put
in possession with a right of renewal. When compared with the terms of the
documents set out in the judgments in Associated Hotels of India Ltd. v. R.N.
Kapoor, [1960] 1 SCR 368 and Sohan Lal Naraindas v. Laxmidas Raghunath Gadit,
[1971] 3 SCR 319, relied upon by the learned counsel for the appellant, which were
construed by this Court as creating lease inspite of their description as licence
deeds, the appellant's case stands out as stronger. If the approach adopted by the
courts below in interpreting the document is accepted, it shall defeat the object of
the Rent Acts, by permitting the parties to camouflage the real nature of the
transaction by resorting to skilful drafting.

5. Mr. Dholakia, learned counsel for the respondent, streneously, contended that
the test of exclusive possession is an out dated one which should not now be taken

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 into account for the purpose of deciding the nature of possession. Reliance was
placed on the observations of Lord Denning MR in Shell-Mex and BP Ltd. v.
Manchester Garages Ltd., [1971] 1 All E.R. 841. We do not agree that exclusive pos-
session of a party is irrelevant as is suggested; but at the same time as has been
observed in the earlier cases of this Court, referredto above, it is not conclusive.
The other tests, namely, intention of the parties and whether the document creates
any interest in the property or not, are important considerations. The observations
in the English case, relied upon by the learned counsel for the respondent cannot
be understood to suggest that the test of exclusive possession has been now
rendered irrelevant and redundant as they are immediately followed by the
statement; "As I have said many times, exclusive possession is no longer decisive."
The position stands further clarified by the following statement in the concurring
judgment of Buckley, L J,; "The only clause which points one way or the other, I
think, is cl. 19 in Sch. 1 which Lord Denning MR has already read, which clearly
recognises that notwithstanding the bargain between the parties, the plaintiffs
retained rights of possession and control over the property in question. That seems
to me to be consistent only with the fact that this trans- action was in truth a licence
transaction and not a tenancy under which the defendants would obtain an
exclusive right to possession of the property during the term of the tenancy,
subject, of course, to any rights reserved by the plaintiffs." We are also not in a
position to agree with Mr. Dholakia when he says that if the parties themselves
have chosen to describe the transaction as a licence, we cannot make out a different
case for them. It is well settled that the main purpose of enacting the Rent statutes
is to protect the tenant from the exploitation of the landlord, who being in the
dominating position is capable of dictating his terms at the inception of the
tenancy; and, the Rent Acts must receive that interpretation which may advance
the object and suppress the mischief. By adopting a different approach the Rent
laws are likely to be defeated altogether.

6. The surrounding circumstances are also consistent with the deed being one of
lease. The notice to vacate the premises was served on the appellant after several
years of expiry of the term of the agreement. It is not suggested on behalf of the
respondent that there is any relationship between the parties or that they were
friends which induced him to allow the appellant to occupy the building. Realisa-

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 tion of rent which has been described in the document (Ext. 20) as "compensation
reserved for use and occupation" was the sole consideration of the transaction. In
this back- ground the description of the parties as lessor and lessee or the rent as
compensation does not carry much weight.

7. For the reasons mentioned above, we hold that Ext. 20 was in reality a document
of lease and the appellant has been enjoying the exclusive possession thereof in
the capacity of month to month tenant. As a result the suit was, in view of the
provisions of the Goa, Daman and Diu Buildings (Lease, Rent and Eviction)
Control Act, not maintainable. The appeal is accordingly allowed but without
costs, the decree passed by the courts below is set aside and the suit is dismissed.
Appeal allowed.

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 Tila Bewa vs Mana Bewa
AIR 1962 Ori 130 JUDGMENT S. Barman, J

1. The plaintiff is the appellant, in this second appeal, from a decision of the
learned Subordinate Judge of Cuttack, whereby he allowed in part, an appeal
from the decision or the learned Munsif, Cuttack and decreed the plaintiff's suit
with certain conditions.

2. The plaintiff is the daughter-in-law of the defendant, as appears from a short

genealogical table set out below- Mana Bawa | First Wife=Natbar (dead)=Tila
Bewa (Plaintiff)

3. On May 10, 1951, the defendant mother-in-law gifted away the suit lands in
favour of the plaintiff daughter-in-law, by a registered deed of gift (Ext. 1). Until
1953, the plaintiff remained in possession of the suit lands and lived with her
husband Natabar who died in 1953, After Natabar's death, the plaintiff lived with
the defendant mother-in-law till 1954. In 1954, the plaintiff having been neglected
by the mother-in-law she (plaintiff) left for her father's house. Thereafter the
plaintiff a applied for mutation in respect of the suit lands. On May 31, 1954 the
defendant mother-in-law executed a deed of cancellation of the gift deed (Ext. A).
Thereafter on September 19, 1954, this suit was filed by the plaintiff for declaration
of title and possession in respect of the suit lands. The defendant mother-in-law's
defence,--as taken in the suit, shortly stated--is this; her son Natabar's first wife,
after marriage, did not come to live with him. Thereafter the defendant got her son
married to plaintiff; during the marriage negotiations, the defendant executed the
deed of gift, in order to induce the plaintiff to come and live with her son; that the
deed off gift was not acted upon; that it was a conditional gift to the plaintiff on
condition that the plaintiff will maintain the defendant; the plaintiff having failed
to maintain the defendant, she (defendant),--according to her,--is entitled to
revoke the deed of gift and accordingly she cancelled the deed of gift by Ext. A :
further that the plaintiff having re-married, she is not entitled to the property
under the deed of gift.

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 4. The trial Court found that the gift was genuine and valid; that the gift was
accepted by the plaintiff through her husband who then was alive; that she was
entitled to the suit lands, even after the plaintiff's remarriage; and accordingly the
suit was decreed in favour of the plaintiff. In appeal the learned lower appellate
Court found that there was no clause for revocation of the gift under any
contingency; that the (plaintiff carried on the Seva of the defendant till her
husband's death; that the plaintiff had remarreid; that there was no fraud,
coercion, undue influence, misake or mis-representation in executing the deed of
gift in favour of the plaintiff; the defendant accepted the terms of the gift; that the
defendant knew fully well the terms when executing the deed; that the transaction,
was not a nominal nor make-believe; in fact it was acted upon; that the deed of gift
cannot thus be revoked; that the plaintiffs title to the suit property as property
gifted to her by the defendant, was declared with the condition that the defendant
mother-in-law will remain in possession till her death; and accordingly the suit
was decreed in favour of the plaintiff declaring the title in her favour but she will
get (sic) possession during the life-time of the defendant. From this decision of the
learned lower appellate Court this Second appeal has been filed by the plaintiff as
the appellant. A cross-appeal was also filed by the defendant mother-in law on the
ground that the deed of gift was not valid because of undue influence, fraud and
coercion.

5. The points, urged on behalf of the plaintiff appellant, were that the document
having been registered and attested as required under Section 123 of the Transfer
of Property Act, the gift became complete; that it cannot be revoked unless there
is an agreement between the donor and the donee that on the happening of a
specified event which does not depend on the will of the donor of the gift, it shall
be suspended or revoked as provided in Section 126 of the Transfer of Property
Act. On a plain reading of the document itself, it does not provide that the
defendant mother-in-law was to remain in possession of the gifted lands during
her life-time.

6. The well settled legal position, based on authorities, is that a gift, subject to the
condition that the donee should maintain the donor, cannot be revoked under
Section 126 of the Transfer of Property Act for failure of the donee to maintain the

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 donor, firstly for the reason that there is no agreement between the parties that the
gift could be either suspended or revoked; and secondly, this should not depend
on the will of the donor; again, the failure of the donee to maintain the donor as
undertaken by her in the document is not a contingency which should defeat the
gift; all that could be said is that the default of the donee in that behalf amounts to
want of consideration; Section 126 thus provides against the revocation of a
document of gift for failure of consideration; if the donee does not maintain the
donor as agreed to by the donee, the latter (donor) could take proper steps to
recover maintenance; it is not open to a settler to revoke a settlement at his will
and pleasure and he has got to get it set aside in a court of law by putting forward
such pleas as bear on the invalidity of a deed of gift. Under Section 122 the Transfer
of Property Act, a gift is complete when it is accepted by or on behalf of the donee;
where there is evidence that the gift of property by a person to his wife and
children was accepted by the donees, the fact,--that the donor, who had no other
property,--stayed on the property, even after the gift,--does not show that the gift
had not taken effect; where no right in the property is reserved in the donor, the
fact that there is a clause in the deed (as in the present case) that the donee should
maintain the donor, does not show that the donor continued to be the beneficial
owner; a direction in a gift deed that the donee should maintain the donor till his
death will not make the gift a conditional one; if the terms of the gift deed were
,that there had been an absolute transfer of the property in favour of the donee,
such a direction for maintenance shall be regarded only as an expression of pious
wish on the part of the donor. On the aspect of such pious wishes, the legal position
is that where a gift deed, after the operative portion of the deed, provided that the
donee was to render services to the donor and to meet the donor's funeral
expenses, such directions are only pious wishes and do not give any right to the
donor to revoke the gift if the conditions are not observed; when, therefore, there
is an out and out transfer, followed by a direction to the donee to maintain the
donor, the latter direction is only a pious wish; on the other hand if the gift deed
starts with a statement that it is made with the object of providing for maintenance
of the donor, and this statement is followed by the operative clause,--there can be
no doubt that the gift is subject ,to the liability to maintain the donor.

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 7. This leads me to the construction of the deed of gift, in the present case, in the
light of the legal position as stated above. On a plain reading of the document, it
is clear that the defendant donor makes a complete gift of the suit lands in the
operative portion of the document, making the plaintiff full owner in possession
from the date thereof "Aja dina tharu sampuma malik dakhalkar karai'' (in
vernacular); it is after making the plaintiff full owner, in respect of the suit lands,
that the defendant expresses her pious wish later on in the document to the effect
that the plaintiff would render to the defendant "Sebadharma and Bharan Poshan,"
that is to say, to render to the defendant services and maintain her during her
lifetime and she further expressed a wish that after her death the plaintiff would
perform her funeral rites; then the document ends, by providing that the
defendant or her heirs will not have. In any way any right to the suit lands and if
they claim any right then on the strength of this document such claim will be
invalid in law courts; the only condition attached to the gift as stated in the last
sentence is that the plaintiff will not be able to sell or mortgage without the consent
of her husband (plaintiff's husband), and that the plaintiff will not alienate the suit
lands by sale or mortgage etc. during the lifetime of the defendant, and that if she
does so, it will be invalid; thus, reading the document as a whole, it is clear that it
was an out and out gift, and that the directions as to her maintenance and
Sebadharma are only pious wishes expressed by the defendant in the document.

8. Mr. S. Mohanty, learned counsel for the defendant respondent,--while pressing

his cross appeal,--submitted that the gift was an unconscionable bargain, as it was
by coercion, undue influence and fraud on defendant, that the defendant executed
the document without knowing the full implications of the document; that the gift
was not acted upon inasmuch as no mutation took place. In my opinion, in view
of there having been no specific issue as to the alleged coercion, undue influence,
fraud, mistake or misrepresentation as alleged, the defendant's cross-appeal,
challenging the deed of gift as altogether a void document, on the grounds as
alleged, has no substance.

9. In support of his proposition, that the deed of gift is revocable, the learned
counsel for the defendant respondent relied on a decision of the Allahabad High
Court in Balbhadar Singh v. Lakshmi Bai, AIR 1930 All 669, holding that under

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 Hindu Law if a person makes a gift to another in expectation that the donee will
do more work in consideration of the gift, it follows that if the donee failed to do
that which it has conditioned he should do, the gift is revocable. The learned
counsel's point is that in order that the defendant may get Sebadharma (services)
from the plaintiff she (plaintiff) has to remain in the house; but the plaintiff having
remarried, she cannot perform the Sebadharma of the defendant because the
plaintiff has left the house of the defendant and remarried. In my opinion, this
argument cannot stand, in view of the legal position as stated above. With regard
to the decision, relied on by the learned counsel, it appears that the Allahabad
High Court observed that it was arguable that in the. absence of an express power
of revocation for failure of the condition the gift cannot be impugned or revoked.
Therefore, the Allahabad decision,--which was decided on the particular facts of
the case,--does not support the defendant's contention. In the present case, as is
clear from the document itself, there is no agreement that on failure on the part of
the plaintiff to perform any of the conditions, namely, Sebadharma etc. the gift will
be invalid. In other words, there must be a defeasance or default clause in order to
make the gift revocable; if there was a condition that on failure to perform any of
the conditions the gift will be void, then certainly the gift could have been revoked;
the document "does not make any provision to that effect. Here, the defendant
cancelled the gift,--as appears from the deed of cancellation,--in apprehension that
the plaintiff might waste the property by transfer; it is not the defendant's case
that, by reason of the plaintiff's having failed to perform her Sebadharma etc. that
she revoked the deed of gift. It is, however, expected that the plaintiff will respect
the pious wishes of the defendant that the plaintiff will perform her Sebadharma
in the manner, that is possible under the circumstances and also carry out her other
obligations as contained in the deed of gift,--all out of the income of the suit lands,
in terms of the deed of gift.

10. In this view of the case, the decision of the learned lower appellate Court is
modified to the extent that Clauses (3) and (4) of Ordering portion in paragraph
18 of the judgment are set aside; the rest of the decision of the learned lower
appellate Court is confirmed; it is further declared that the plaintiff is entitled to
immediate possession of the suit lands, and that she be given such possession
accordingly. The result, therefore, is that the appeal is partly allowed with the

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 modifications as aforesaid. The cross-appeal is dismissed. In the circumstances of
the case, each party to bear own costs throughout, except that the court-fees for
the plaint will be paid by the parties in equal shares to the State Government as
per Clause 2 of the ordering portion of the judgment of the learned lower appellate
Court.

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 Smt. Kartari vs Kewal Krishan and Ors
AIR 1972 HP 117 JUDGMENT D.B. Lal, J.

1. This second appeal has been directed against the judgment dated 24th June,
1968 of the District Judge, Kangra, whereby reversing the decision of the Sub-
Judge First Class Una, he has dismissed the suit of the plaintiff which was for
recovery of possession over landed property which was gifted by the plaintiff's
ancestor to the defendants. Shrimati Kartari appeared in Court with the
allegations, that her mother Shrimati Basanti was the exclusive owner of 20 Kanals
and 16 Marias of land situate in 'Mauza' Badhara (P. S. Una) of which the Khasra
numbers were given in the plaint. It was alleged that Shrimati Basanti was an old,
feeble, helpless and illiterate woman. She was 'paroanashin' and was not in a
sound state of mind as she used to remain sick. In fact, the plaintiff used to look
after her and usually resided with her as she was her only daughter and had
become widow within four years of her marriage. The plaintiff has no issues of her
own. According to plaintiff, her mother was attached to her and she was looking
after her properties. Sometimes in March or April, 1961, the plaintiff went to reside
at her husband's house and the defendants Kewal Krishan and Mula Ram who
were collaterals in the fourth degree, of the husband of Shrimati Basanti, taking
advantage of her absence and of the helpless condition of Shrimati Basanti,
brought to bear undue influence upon her and brought her to Una under the
pretext of getting her treated by some doctor. There on 4th April, 1961 they
managed to obtain a gift-deed from her which they got registered on that very day.
In this manner Shrimati Basanti was divested of her entire landed property and
the defendants claimed ownership on the basis of the gift-deed. When the plaintiff
came back to her village, she came to know from people that some transaction of
gift was obtained by the defendants from her mother. Accordingly she made
enquiries from her mother who did not remember anything but simply asserted
that she was made to sign some transfer deed in favour of the defendants.
Thereafter, at the instance of Shrimati Basanti, the two ladies went to Una on 24th
April, 1961 and got scribed a complaint to the Superintendent of Police, Hosiarpur,
to the effect that under undue influence and "fraud, some transfer deed was
obtained from Shrimati Basanti by the defendants and that the same would not be
binding upon them. Three or four days thereafter, Shrimati Basanti died. The

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 defendants had come in possesion over the disputed land and did not vacate
possession. Therefore, the plaintiff was compelled to file the suit for recovery of
possession after cancellation of the gift-deed.

2. The defendants contested the suit on the allegations, that Shrimati Basanti was
neither old nor feeble nor incapable of understanding. Rather she fully understood
the document which she executed in favour of the defendants. According to
defendants, she did not want her properties to descend upon the heirs of the
plaintiff who was daughter and rather wanted the properties to go to the heir of
her deceased husband. That was a reason, according to defendants, why a gift-
deed was executed by her in favour of the defendants. It was denied that any
undue influence was exercised upon the lady and that any fraud was practised
upon her.

3. The learned Sub-Judge found in favour of the plaintiff and after cancelling the
gift-deed, decreed the suit for possession. The defendants came in appeal before
the learned District Judge and he disagreed with the decision of the learned sub-
Judge and dismissed the suit. The plaintiff has now come up in this second appeal.

4. There is a specific allegation in the plaint that undue influence was exercised
and in the absence of the plaintiff, the defendants, had taken the lady who was
ailing, to Una under the pretext that she was to be given a treatment by some
doctor. She was, thus, brought under the influence of the defendants and the gift-
deed was obtained. The Court trying a case of undue influence must consider two
things to start with, namely:-- (i) Are the relations between the donor and the
donee such that the donee is in a position to dominate the will of the donor? and
(ii) Has the donee used that position to obtain an unfair advantage over the donor?
Upon the determination of these issues, a third point emerges, which is that of the
onus probandi. If the transaction appears to be unconscionable, then the burden
of proving that the contract was not induced by undue influence is to lie upon the
person who was in a position to dominate the will of the other. See AIR 1967 SC
878, Subhash Chandra v. Ganga Prosad. It was thus to be ascertained if the
defendants were in a position to dominate the will of Shrimati Basanti and have
they used their position to obtain an unfair advantage over her. Certain

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 circumstances were established by evidence and these circumstances need be
reiterated. As to the age of the lady, according to plaint case, she was 90 years old.
In the gift-deed itself the age is mentioned as 60 years. Madho Ram (PW. 3),
however, stated that her age was 75 years Shero (D.W. 3), assessed her age to be 70
years, while Kewal Krishan defendant (DW-4) stated that her age was 60 or 65
years. It is, therefore, abundantly clear that the age of the lady was near about 70
years which was sufficiently an advanced age, specially when she was ailing.
According to Shero (D. W. 3) the defendants had brought her for treatment by
some doctor. The plaintiff herself, of course, stated that she was not in a sound
state of mind and that she was in a position to tell facts about the transaction only
when she could collect her wits. It was, therefore, established that Shrimati Basanti
was an aged lady who was ailing at the time of the execution of the gift-deed.
Apparently she must have been attached to the plaintiff who was her only
daughter. The gift-deed was obtained while the daughter was absent and had gone
to her husband's place. In fact, the defendants avoided the presence of the plaintiff
at all relevant time of the execution and registration of the deed. The defendants
were, no doubt, collaterals and being male-members of the family of her husband,
came to her and brought her to Una for treatment. In this manner they were in a
position to dominate the will of the lady, at any rate during that short period of
time when the plaintiff remained absent. In the plaint, however, it was stated that
the defendants were not even on visiting terms with the lady. This assertion was
obviously made as a counterblast to the defendants' assertion in the gift-deed itself
that they were serving the lady since long and the gift was obtained in lieu of that
service. There is no evidence worth the name to prove that any service was
rendered by the defendants to the lady. It is obvious that she must have been
attached to her only daughter and, as stated by her, it was she who was to serve
her up till her death. The beneficiary Kewal Krishan defendant played a prominent
part in execution and registration of the deed. He had taken witnesses from the
village and according to Shero (D. W. 3), he was also one of the witnesses taken
from the village, but only Jakha (D. W. 2) stood as witness and one more witness
was taken from Una. For some reason, Shero (D. W. 3) was given up. However, he
was produced in the Court and it is he who admitted that the lady was taken by
the defendants for treatment to Una. However, he was not in a position to tell as
to whether any treatment was given to her at all. It appears therefore, that the lady

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 was taken to Una under the pretext of giving her a treatment. That is the reason
why the witness is not in a position to give out any detail regarding such
treatment. It is, therefore, evident that Kewal Krishan defendant engaged his
scribe for writing the deed. He presented the lady for registration of the document.
In this connection, reference can be made to Vellaswamy Servai v. L. Sivaraman
Servai, AIR 1930 PC 24 which was a case of will. But the ratio of the case is equally
applicable to the circumstances of this case. Their Lordships made the following
observation:-- "Where the propounder of a will is the principal beneficiary under
it and has taken a leading part in giving instructions for the execution of the will
and procuring its registration and execution, the circumstances are such as would
excite the suspicion of any probate Court and require it to examine the evidence
in support of the will with great vigilance and scrutiny. The propounder is not
entitled to probate unless the evidence removes such suspicion and clearly proves
that the testator approved of the will." The defendant being the principal
beneficiary thus took a leading part in execution and registration and this by itself
is sufficient to prove that he dominated the will of the lady and exercised his
influence in obtaining an unfair advantage inasmuch as he deprived the natural
heir namely the plaintiff of the entire properties. The natural affection of the
mother should have been for the daughter who was a widow and not under
affluent circumstances. Admittedly she has no issues and according to her
statement, she does pot possess any landed property at her husband's place. Amar
Nath, Sarpanch, (P. W. 2) stated that the plaintiff has no male-member to look after
her at her father-in-law's place. She has no landed property, except half portion of
a house of which compensation has been paid to her. Kewal Krishan (D.W. 4) the
defendant himself admitted that the plaintiff does not have any relation of hers at
her father-in-law's place. The defendants asserted that the donor did not want to
change the line of descent from her husband and that is why, she gifted the
disputed property to them. If that was the reason for making the gift, why it was
not mentioned in the deed itself? There it was stated that the defendants were
doing service for her and the gift was being executed in lieu of that service. Above
all, the lady herself came to Una subsequently and questioned the deed of gift. She
got a complaint written by Sant Ram scribe (P.W. 1) on 25th of April, 1961. This
witness produced his register which contained the thumb impression of the lady.
The substance of the complaint was written in the register which was, obviously,

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 kept in the regular course of business. A copy of the register (Ex. P.W. 1/1) has been
filed. The original complaint was not summoned from the office of the
Superintendent of Police. There was some controversy as to the admissibility of
this register entry. There can be no denying that the register entry is by itself
primary evidence of a document. In fact, two documents were brought into
existence, one was the complaint sent to the Superintendent of Police and the other
was the register entry made by the scribe. The plaintiff produced the register entry
and could not produce the complaint itself. The register entry was thus primary
evidence of the document and could be taken into evidence. At any rate, this
document proved that Shrimati Basanti had her own objection for the document
which she was made to execute on 4th April, 1961 at the instance of the defendants.
She did not know the details of that document, which is manifest from the register
entry (Ex. P.W. 1/1) which specifies that all the four brothers including the two
defendants had taken the transfer in their favour. In fact, the gift was executed in
favour of only two brothers, namely, the defendants. This circumstance also
proves that the lady was not aware of the details of the transaction of which she
was made a party. According to Kewal Krishan (D.W. 4), she was an illiterate lady.

5. The learned District Judge pointed out that the defendants' witnesses were not
put questions by the plaintiff as to which document other than the gift was
intended to be executed. In fact, no such questions could be put to the witnesses
because the plaintiff never relied upon any other document. Rather her case was
that a gift under undue influence was executed. The learned District Judge further
pointed out that the scribe was not cross-examined by the plaintiff upon the
question as to whether the document was read out and explained to the lady. He
has further stated that Jakha Ram (D.W. 2) Stated that the lady had come by foot
upto Una, and from this, it could be inferred that she was hale and hearty. These
suggestions made by the learned District fudge do not carry us any further. Jakha
Ram was the own person of the defendant and was brought from the village to
stand as witness for the deed. As such, he was out to support the defendant. As
against him, Shero (D.W. 3) very much stated that she was ailing at that time and
was brought by Kewal Krishan for treatment. The scribe (D.W. 1) rather stated that
whatever the lady said was got written in the deed, which is obviously incorrect
because the language utilised for scribing the deed could not have been stated by

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 her. The witness could have very well stated that he had heard the lady and
understood her. Thereafter, he wrote down the substance of her talk and scribed
the deed, but this he has not stated. The learned District Judge, then relied upon
the endorsement of the Sub-Registrar. It is obviously correct that such
endorsements are made out, in a routine fashion and whatever presumption is
attached to such endorsements, it can be rebutted by proper evidence. The learned
District Judge then stated that the particulars of fraud were not given out in the
plaint. It may be correct to say that a case of fraud was not established, but
nonetheless the case of undue influence was proved and that is sufficient to set
aside the document.

6. As a result to all that I have stated above, inferences can be drawn to the effect
that the defendants were in a position to dominate the will of the lady and that
they exercised their influence and obtained an unfair advantage for themselves.
The transaction of gift was itself unconscionable inasmuch as the mother deprived
her dependent daughter of her entire share in the properties. Besides this, the
donor herself never kept any land for her maintenance. Had she remained alive
for some substantial period, she would have been entirely dependent for
livelihood upon the defendants. She would not have agreed to such a transaction.
The burden of proof thus lay upon the defendants to establish that undtie influence
was not exercised and this they failed to establish. The learned District Judge
placed a wrong burden of proof upon the plaintiff which is clear from the
reasoning that he has adopted in the judgment. It is, therefore, abundantly clear
that the disputed gift-deed was obtained by undue influence and need be set aside.

7. Rules regarding transactions by 'pardanashin' women are equally applicable to

illiterate and ignorant women though not 'pardanashin'. This is so held in Chinta
Dasya v. Bhalku Das, AIR 1930 Cal 591. There is no reason, say their Lordships,
why a rule which is applicable to pardanashin ladies on the ground of their
ignorance and illiteracy should be restricted to that class only and should not
apply to the case of a poor woman who is equally ignorant and illiterate and is not
pardanashin, simply because she does not belong to that class. If that view of the
matter were adopted the effect clearly would be to confer an unfair advantage
upon rich women as compared with poor women. The object of the rule of law is

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 to protect the weak and helpless and it would not be restricted to a particular class
of the community. In Mt. Farid-un nisa v. Mukhtar Ahmad, AIR 1925 PC 204 the
following observation has been made which pan be profitably understood in the
case:-- "The law of India contains well-known principles for the protection of
persons, who transfer their property to their own disadvantage, when they have
not the usual means of fully understanding the nature and effect of what they are
doing. In this it has only given the special development, which Indian social usages
make necessary, to the general rules of English law, which protect persons, whose
disabilities make them dependant upon or subject them to the influence of others,
even though nothing in the nature of deception or coercion may have occurred.
This is part of the law relating to personal capacity to make binding transfers or
settlements of property of any kind. The real point is that the disposition made
must be substantially understood and must really be the mental act, as its
execution is the physical act, of the person who makes it. The parties to prove the
state of the settlor's mind are the parties who set up and rely on the deed. They
must satisfy the Court that the deed has been explained to and understood by the
party thus under disability, either before execution, or after it under circumstances
which establish adoption of it with full knowledge and comprehension. Further,
the whole doctrine involves the view that mere execution by such a person,
although unaccompanied by duress, protest or obvious signs of misunderstanding
or want of comprehension, is in itself no real proof of a true understanding mind
in the executant. Evidence to establish Such comprehension is most obviously
found in proof that the deed was read over to the settlor and, where necessary,
explained. If it is in a language which she does not understand, it must, of course,
be translated, and it is to be remembered that the clearness of the meaning of the
deed will suffer in the process. The extent and character of the explanation
required must depend on the circumstances of each case." In the instant case, it
was the duty of the defendants to prove that the lady substantially understood the
document and her physical act of signing such document coincided with the
mental act of approval of its contents. This the defendants have failed to establish
and hence the plaintiff must succeed. In Ram Kalap Pande v. Bansidhar, (AIR 1947
Oudh 89), the following observation was made which may be of some interest:--
"When the parties to a transaction do not stand upon an equal footing, the law
raises in a suitable case a presumption of fraud. In order to bind persons who, by

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 their acts or contracts, have divested themselves of the bulk of their property, there
must be a free and full consent, and in transactions in which one of the parties is
not a free and voluntary agent and is unable to appreciate the import of what he
does, the main elements which render the act his own are wanting. Accordingly,
when a person, who from his state of mind, age, weakness or other peculiar
circumstances is incapable of exercising a free discretion, is induced by another to
do that which may tend to injure him, that other is not allowed to derive any
benefit from, his improper conduct." The ratio of these cases equally applies to the
circumstances made out in the instant case.

8. The respondents made rather a desperate attempt of raising the plea of

limitation. It was urged on their behalf, that 3 years period of limitation is
prescribed under Article 59 of the Limitation Act and because the gift-deed was
executed on 4th April, 1961, the suit should have been filed upto 4th April, 1964.
Rather it was filed on 2nd May, 1964 and as such, according to respondents, the
suit was time barred. It has to be understood by reference of Article 59, that this
period of 8 years begins to run from the date when the facts entitling the plaintiff
to have the instrument cancelled or set aside first be come known to him. It is,
therefore, a question of fact as to when the facts of the deed became known to the
plaintiff and as pointed out by the learned counsel for the appellant, such facts
could only be known from the deed itself, which was entered in the registration
books only on 1st September, 1961. At any rate, that is the date which has been
mentioned in the endorsement that has been made on the back of the deed itself.
Therefore, a certified copy of the deed could only be obtained after 1st September,
1961 and if this date is accounted for, the suit was filed well within time. It is
obviously correct that the plaintiff or Shrimati Basanti were not aware of the full
contents of the gift-deed because in Ex. P.W. 1/1, which is a copy of the register
entry maintained by the scribe, they specified that four of the brothers were the
donees under the transfer deed. This was an incorrect statement. The indication is
that the ladies were not aware of the true contents of the documents and therefore
for the purpose of limitation, the facts entitling them to have the instrument
cancelled, could be come known to them only after 1st September, 1961. Apart
from this, as held in Banarsi Das v. Kanshi Ram, AIR 1963 SC 1165 a new plea of
limitation which was not purely one of law but a mixed question of law and facts

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 cannot be allowed to be raised for the first time at the stage of arguments in second
appeal before the High Court.

9. In this view of the matter, it was amply proved that the gift-deed was executed
under undue influence and hence the agreement did not convey a free and full
consent of Shrimati Basanti. A valid contract never came into existence. Shrimati
Basanti herself objected to the deed and lodged a complaint to Police in respect of
it. The defendants could not derive any title under the gift-deed. The plaintiff
being the natural heir of the deceased, is entitled to get possession from the
defendants and the gift-deed is liable to be set aside.10. The appeal is, therefore,
allowed and the judgment and the decree of the learned District Judge are set aside
and the plaintiff's suit for possession is decreed, with costs all throughout.

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 Kama Sahu And Anr. vs Krishna Sahu
AIR 1954 Ori 105

JUDGMENT Mohanty, J.

1. Defendants are the appellants. It appears that D-1, (the husband of D-2)
Satyabadi Sahu, Krishna Sahu and Laxman Sahu are four brothers. The family
had some lands at, different places including lands in village Chandipadaro.
Appellant 2 (D-2) had purchased, some homestead lands with a house thereon
at Chatrapur. Satyabadi and his other brothers wanted, to take an interest in
that homestead land of D-2, treating it to be a portion of the joint family
property, but failed. It also appears that it was so arranged between the present
plaintiff, Krishna Sahu and Satyabadi on the one hand, and the defendants-
appellants on the other, that Krishna and Satyabadi would separately take the
homestead land and the house of D-2 at Chatrapur in exchange for their lands
that would fall to their share in the village Chandipadaro. Accordingly on 27-
7-43, D-2 executed sale-deeds one in favour of the present plaintiff and another
in favour of Satyabadi with respect to her homestead land and the house
thereon situate at Chatrapur. But they, in return, could not execute any such
deed in favour of D-2 in respect of their lands at Chandipadaro; but promised
to do so after partition of their lands had been finalised. Admittedly the
partition deed was effected between the brothers with respect to their joint
family property on 18-2-44. Notwithstanding it, they did not execute any sale-
deed in favour of D-2 as previously agreed Upon. It is why D-2 cancelled the
two sale-deeds executed by her on 27-7-43. It should be noted here that the
dispute between the parties went so far as to culminate in the initiation of 145
proceedings with respect to the disputed land. The Magistrate could not come
to any finding as to which party is in possession of the disputed land, and he
therefore kept the property under attachment and directed the parties to
establish their right in the Civil Court. It is why the respondent filed a suit out
of which this appeal has arisen for a declaration of his title to the property on
the strength of the sale-deed executed in his favour by D-2 on 27-7-43. A similar
suit was also filed by the present appellant against Satyabadi Sahu for a

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 declaration of her title to the other portion of the homestead and for recovery
of possession thereof.

2. The case of the plaintiff is that he has purchased the property for a cash
consideration of Rs. 500/- and has acquired a good title to it on the execution of
the sale-deed by D-2 and has been in possession thereof since his purchase. The
claim was contested by both the defendants (appellants) mainly on the ground
that in pursuance of an oral agreement for exchange of lands, D-2 executed a
deed with respect to her Chatrapur land on the promise of the plaintiff
(respondent) to execute similar deed in her favour with respect to her
Chandipadaro land after the partition of that land had been finalised. Though
the said partition was finalised in February 1944, the plaintiff did not execute
any sale-deed in her favour, although asked for many a time. It is why she has
cancelled the sale-deed executed in favour of the plaintiff; and the plaintiff has
acquired no title to the property on account of his failure to execute a similar
deed in her favour with respect to his own land. 3. Both the Courts below have
concurrently held that in pursuance of an oral agreement for exchange of land
as between the parties, D-2 has executed a sale-deed. Exhibit I in favour of the
plaintiff on the promise of the plaintiff to execute a similar deed in favour of D-
2 with respect to his Chandipadaro land after the partition among the brothers
had been finalised, that the partition was effected in February, 1944, taut the
plaintiff did not execute any Kabala in favour of D-2; and that notwithstanding
it, the plaintiff has acquired a good title to the property on the execution of the
sale-deed, Ext. I by D-2. They have further held that it is open to the defendants
to legally enforce the specific performance of the contract for the execution of
the sale-deed with respect to the Chandipadaro land. They have, therefore,
decreed the plaintiff's suit. Against that decree and judgment of the appellate
Court the defendants have preferred this second appeal. 4. As has been stated
above, there is a concurrent finding of both the Courts below that in pursuance
of an agreement for exchange of land between the parties, D-2 has executed a
sale deed now in question in favour of the plaintiff. This finding was not
challenged before me by the respondent. The only question that was canvassed,
at the bar is as to whether the plaintiff has acquired any title to the property by
virtue of the deed, Ext. I. Exhibit C is a deed of cancellation which D-2 executed

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 on 21-6-44 cancelling thereby the deed, Ext, I. She appears to have done it when
she found herself helpless in persuading the plaintiff to execute a similar
document in pursuance of the agreement of exchange. It is contended on behalf
of the respondent that the mere execution of the sale-deed with out any specific
agreement for the postponement of the passing of the title till after the
execution of another document by the plaintiff is itself sufficient to pass valid
title in the disputed property to the plaintiff under Ext. I. But on the other hand,
it is contended on the side of the appellant that as the transaction is an
exchange, but not a sale, the title would not pass to the plaintiff under Ext. I
until and unless a similar document is executed by the plaintiff in favour of D-
2 with respect to his land at Chandipadaro. In my view, the contention
advanced on the side of the appellant is tenable. The word 'sale' has been
defined in the T. P. Act in S. 54 as "A transfer of ownership in exchange of price
paid or promised, or part paid, or part promised." It appears from this
definition that a 'sale' should always be for a price, but in the case of 'exchange'
the transfer of the ownership of one thing is not for any price paid or promised,
but for transfer of another thing in return. The word "exchange" has been
defined in Section 118 of the T. P. Act, as: "When two persons mutually transfer
the ownership of one thing for the ownership of another, neither thing or both
things being money only, the transaction is called an 'exchange'." If in case a
transfer of ownership of an immovable property is exchanged for money, then
the 'transaction cannot be an exchange, but a sale. It being so, unless the
properties of both parties are simultaneously transferred in favour of each
other, the title to the property cannot pass in favour of the one when the other
party does not execute any such document in favour of the other. Exchange can
be affected either by one document or by different documents. The
consideration for the one document executed in pursuance of an agreement for
exchange is the execution of a document by the other party. Unless it is so done,
the party who has taken the deed from the other party without himself
executing any document in favour of that other party, cannot claim to have got
a valid title to the property until and unless he executes a similar document
transferring his interest in favour of that other party. It being so, the title cannot
pass, nor could have passed to the present plaintiff on the mere execution of
the sale-deed Ext. I. In the case of an exchange, the intention of parties cannot

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 but be that there should be a reciprocal transfer of two things at the same time
and that until such a thing is done, the passing of title under the one document
executed in pursuance of the contract, should always be postponed till after the
execution of another document by the other party. In this view of the position
of law, I hold that the plaintiff in this case has acquired no title to the property,
because, he has failed to act according to the promise even though the partition
was finally affected in February, 1944. 5. Learned advocate appearing for the
respondent relies upon a decision of the Allahabad High Court reported in --
'Gopi Ram v. Durjan', AIR 1929 All 63 (A), in support of his contention that
under Ext. I the plaintiff has got good title to the property, but the only remedy
available to the present appellant is to sue the plaintiff for specific performance
of the contract with respect to the Chandipadaro land. But the facts of that case
are not similar to the facts of the present 'case, in that case land was exchanged
between the parties under one deed of exchange. But in spite of that deed of
exchange, the defendant was withholding possession of his land. It is why, the
plaintiff in that case brought a suit for recovery of possession' of the land in
dispute on the basis of that exchange. Their Lordship's of the Allahabad High
Court while discussing this point has made a distinction between an executed
contract and an executory contract and held that specific performance of a
contract is available only in the case of an executory agreement, but not in the
case of an executed contract. He has further observed in that case to the effect
that when the exchange-deed was finally executed, the contract is not available
to the parties in that suit. It being so, that authority is not of any avail to the
respondent. It is further urged on the side of the respondent that when there
was a mutual exchange of possession the defendants cannot avail the plea that
passing of the title in favour of the plaintiff to the disputed property has been
postponed till after the execution of a similar Kabala by the plaintiff. But the
transaction of exchange cannot be completed till after the execution in the
present case of deeds by both parties in favour of each other. When I one of the
parties has failed to execute the deed in pursuance of the agreement, the mere
fact of exchange of possession cannot be sufficient to complete the passing of
title in favour of each other, especially when properties to be exchanged are
each worth more than Rs. 100/-. It being so, this contention is not sustainable.

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 6. But the case filed by the present defendants against Satyabadi Sahu
ultimately came up before this Court in -- 'Second Appeal No. 309 of 1948
(Orissa) (B)'. In that case a similar question arose as to whether Satyabadi has
acquired any title by the deed executed by the present appellant in his favour
without Satyabadi executing a similar document in favour of D-2 with respect
to the Chandipadaro land. A Division Bench of this Court in the unreported
case have held that when it was an exchange, the title to the two items of the
property on each side would pass to the other simultaneously on execution of
the necessary document or documents, and that "it is impossible to say that the
title passes until the entire transaction is fully completed." Both these cases are
of same nature. The view taken by the Division Bench of this Court is in
consonance with the view which I have taken in this case on a consideration of
the distinction between 'exchange' and sale.

7. In the result, I would differ from the courts below in this that the plaintiff-
respondent has not acquired any title to the property merely on the execution
of the sale-deed Ext. I in his favour by D-2. As the plaintiff has not carried out
his part of the contract and as there has been no reciprocal transfer of the
property as contemplated within the definition of 'exchange', I would hold that
the plaintiff-respondent has acquired no title to the property under Ext. I. 8. I
would, therefore, set aside the judgment and decree of the Courts below and
dismiss the plaintiff's suit with costs. The appeal is allowed with costs.

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