http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: MANGAN LAL DEOSHI

       Vs.

RESPONDENT: MOHAMMAD MOINUL HAOQUE & OTHERS.

DATE OF JUDGMENT: 01/12/1950

BENCH: SASTRI, M. PATANJALI BENCH: SASTRI, M. PATANJALI KANIA, HIRALAL J. (CJ) DAS, SUDHI RANJAN

CITATION:  1951 AIR   11            1950 SCR  833

ACT:     Indian Registration Act, 1908, 8.17 (1) (b) and (d),  s. 17  (2)-"Lease  "--Compromise decree  creating  under  lease between  A and B on condition that A pays a sum of money  to C--Whether compulsorily registrable--Agreement to lease  not creating immediate interest land--Whether "lease".

HEADNOTE:     An agreement for a lease, which a lease is by the Indian Registration  Act  declared to include, must be  a  document which effects an actual demise and operates as a lease.   It must create present and immediate interest in land. Where  a litigation between two persons A and B who  claimed to be tenants under C was settled by a compromise decree the effect of which was to create a perpetual underlease between A  and B which was to take effect only on condition  that  A paid Rs. 8,000 to C within a fixed period:     Held, that such a contingent agreement was not "a lease" within el. (a) of s. 17 (t) of the Indian Registration  Act, and  even though it was covered by cl. (b) of the said  sec- tion it was exempt from registration under el. (vi) of subs. (2) of s. 17.  Hemanta  Kumari Debi v. Midnapur Zamindari Co. (I  L.R.  47 Cal. 485 P.C.) relied on.

JUDGMENT:  CIVIL   APPELLATE   JURISDICTION: Civil  Appeal  No.94   of 1949. 107 834 Appeal from a judgment and decree of the High Court of Judi- cature  at Patna in Appeal from Appellate Decree No.  97  of 1946   (Mannohar  Lall  and Mukherji JJ.) dated 23rd  Decem- ber,  1947, confirming the judgment of the District    Judge of Purulia in Appeal No. 159 of 1944.    S.P.  Sinha (P. K. Bose,     with  him)  for  the  appel- lant.     N.C.  Chatterjee  and Panchanan Ghosh  (Chandra  Narayan Naik, with them) for the respondent.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

   1950.  December 1. The Judgment of the Court was  deliv- ered by     PATANJALI  SASTRI J.--This appeal arises out of  a  suit brought  by the respondent in the court of  the  Subordinate Judge, Dhanbad, for recovery of arrears of royalty and  cess from  the  appellant and another alleged to be due  under  a compromise decree passed on the 6th March, 1923, in a previ- ous  suit between the predecessors in interest of  the  par- ties.   The only plea which is material for the  purpose  of this  appeal is that the compromise decree not  having  been registered  was inadmissible in evidence.  The courts  below held that the document did not require registration and gave effect  to  its  terms in decreeing the  suit.   The  second defendant has preferred this appeal.     The  facts  are not now in dispute and  may  be  briefly stated.   On  11th  March, 1921, one  Kumar  Krishna  Prasad Singh (hereinafter  referred to  as Kumar) granted a  perma- nent  lease  of the right to the underground coal  in  5,800 bighas  of  land  belonging to him to  Shibsaran  Singh  and Sitaram  Singh (hereinafter referred to as the Singhs) by  a registered  patta stipulating for a salami of Rs. 8,000  and royalty at the rate of 2a. per ton of coal raised subject to a  minimum  of Rs. 8,000 and for certain  other  cesses  and interest.  On 7th June, 1921, Kumar executed another  perma- nent  patta leasing the right to the coal in 500 bighas  out of  the 5,800 bighas referred to above to one Prayngji  Bal- lavji  Deoshi  and his son  Harakchand  Deoshi  (hereinafter referred to as the Deoshis).  By this document. 835 the Deoshis agreed inter alia to pay royalty at the rate  of 2a.  per  ton  on all classes of coal raised  subject  to  a minimum  of  Rs. 750 a year. The Singhs  feeling  themselves aggrieved  by  the latter transaction brought a  title  suit (No. 1291 of 1921) in the Court of the Subordinate Judge  of Dhanbad for a declaration of their title and for  possession of the 500 bighas leased to the Deoshis under the  aforesaid patta  of  7th June, 1921.  To that suit Kumar  was  made  a party as defendant No. 3, the Deoshis being defendants 1 and 2.  The suit was however cornpromised on 6th March, 1923, by all  the  parties and a decree based on the  compromise  was also passed on the same day.  The interest of the Singhs was brought  to sale in 193S in execution of a  decree  obtained against  them and was purchased by the plaintiff who  insti- tuted  the presnt  suit on 3rd October, 1942,  claiming  the royalty  and cesses payable under the compromise decree  for the period from Pous 1345 to Asadh 1349 B.S. from defendants 1  and 2 as the representatives of the Deoshis  who  entered into the compromise of March, 1923.     In  order to appreciate the contentions of the  parties, it is necessary to set out the relevant terms of the compro- mise decree which are as follows :--     "The plaintiffs (the Singhs) within two months from this date  shall  pay  Rs. 8,000 as salami  to  defendant  No.  3 (Kumar).  Otherwise  all the terms of  the  compromise  Will stand cancelled and the plaintiffs shall not be competent to claim  any right to or possession over the.land  covered  by the patta dated 11th March, 1921... The patta which  defend- ant No. 3 executed in favour of the plaintiffs in respect of 5,800 bighas of coal land in village Rahraband shall  remain in  force, and the plaintiffs will get a decree of  declara- tion of their right and title to the 500 bighas of coal land in  dispute but defendants 1 and 2 (the Deoshis) shall  hold possession  as tenants.  Besides the terms mentioned  below, defendants  1 and 2 shall remain bound by all the  remaining terms under which they took settlement of the 500 bighas  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

coal land from defendant No. 3 under 836 patta  and Kabuliyat, and both the defendants 1 and 2  shall possess  the  same under the plaintiffs from  generation  to generation and all the terms of the said patta and Kabuliyat shall remain effective and in force between them.  Both  the defendants  1 and 2 shall remain bound to pay to the  plain- tiffs commission at the rate of 2a. 6p. per ton on all sorts of  coal instead of 2a. a ton as stated before in the  patta of  5,800  bighas of land settled  with  the  plaintiffs.The plaintiffs shall pay to defendant No. 3 in future the  mini- mum royalty of Rs. 6,000 instead of Rs. 8,000 as  stipulated in the original patta of 11 th March 1921 and commission  at the rate of la. 9p. a ton in place of 2a. a ton as stipulat- ed  in the patta of March 21  ......  Unless the  plaintiffs pay  to the defendant No. 3 Rs. 8,000 within 2  months  from this  day they shall not be competent to take out  execution of this decree, nor shall they be competent to take  posses- sion  of the land in dispute. The defendants 1 and 2  within one month from the date of payment of Rs. 8,000 as aforesaid to  defendant No. 3 shall execute a new Kabuliyat in  favour of  the  plaintiff in respect of the modified  terms  stated above, i.e., on the condition to pay commission at the  rate of 2a. 6p. per ton...In the new patta which defendant No.  3 will execute in favour of the plaintiffs he shall embody the condition that the annual minimum royalty will be Rs.  6,000 instead  of Rs. 8,000 and commission will be at the rate  of la. 9p. per ton in place of 2a. per ton as mentioned in  the aforesaid  patta.  If the defendant No. 3 does  not  execute the  parts on the aforesaid modified terms in favour’of  the plaintiffs within the time aforesaid and both the defendants 1  and  2 also do not execute a kabuliyat on  the  aforesaid modified terms, then this very rafanama shall be treated  as the  parts and kabuliyat, and the plaintiffs  in  accordance with the terms of the rafanama shall pay to defendant No. 3, Rs. 6,000 only as minimum royalty and commission at the rate of  la. 9p. per ton with respect to 5,800 bighas  and  shall continue  to realise commission at the rate of 2a.  6p.  per ton  from defendants 1 and 2 who shall remain bound  to  pay the same." 837 The  answer to the question whether this  compromise  decree requires  registration  depends on the legal effect  of  the changes in the status quo ante of the parties brought  about by  the document.  A careful analysis reveals the  following alterations :--     (1)  In the lease to the Singhs, the rate of royalty  or commission  was reduced from 2a. per ton of coal  raised  to la. 9p. per ton and the minimum royalty was reduced from Rs. 8,000 to Rs. 6,000 while the area of coal land in their khas possession was reduced by 500 bighas.     (2)  In the lease to the Deoshis the rate of royalty  or commission was enhanced from 2a. per ton to 2a. 6p. per  ton and tiffs was made payable to the Singhs.     The Singhs and the Deoshis were brought into a new legal relationship,  the  former accepting the latter  as  tenants holding the disputed 500 bighas under them in  consideration of  the latter agreeing to pay the enhanced royalty  to  the former.     (4)  The whole arrangement was made conditional  on  the Singhs  paying Rs. 8,000 to Kumar within 2 months  from  the date of the compromise, it being expressly provided that the Singhs  were not to be entitled to execute the decree or  to take  possession  of the disputed area of 503  bighas  which evidently had not till then passed into their possession.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

   Now,  sub-section (1) of section 17 of the  Registration Act, enumerates five categories of documents of which regis- tration  is  made compulsory which include"  (d)  leases  of immoveable  property  from  year to year, or  for  any  term exceeding  one year, or reserving a yearly rent;". Sub  sec- tion  (2) however provided that "nothing in clauses (b)  and (c) of sub-section (1)applies to ......  (vi) any decree  or order  of court." It may be mentioned in passing  that  this clause was amended with affect from the 1st April, 1930,  by the  Transfer  of Property  (Amendment)  Supplementary  Act, 1929,  so  as  to exclude from the scope  of  the  exception compromise decrees comprising immovable property other  than that which is the subject-matter of the suit.  But 838 the  amendment cannot affect the document here  in  question which  came into existence in 1923.  Before  the  amendment, the  clause  was  held to  cover  even  compromise   decrees comprising   immovable  property which was not  the  subject matter  of the suit:  [Vide Hemanta Kumari Debi v.  Midnapur Zamindari  Co.  (’)]. That decision applies to  the  present case and obviates the objection that because the  compromise in  question covered also the remaining 5,300  bighas  which were  not the subject-matter of the title suit of  1921,  it was  outside the scope of the exception in sub-section  (2), clause (vi).     The only question, therefore, is whether the  compromise decree is a "lease" [which expression includes "an agreement to  lease"  by the definition in section 2 (7)]  within  the meaning of el. (d) of sub-section (1). It is obvious that if the compromise decree fails within clause (d) of sub-section (1)  it  would not be protected under clause  (vi)  of  sub- section  (2) which excepts only documents falling under  the categories  (b) and (c) of sub-section (1).  The High  Court was  of opinion that, on a proper construction of the  terms of the compromise, it did not fall under clause (d).   Mano- har  Lall J., who delivered the leading judgment,  observed: "It was a tripartite agreement embodied in the decree of the court and was, therefore, exempt from registration. It  will be  oh.served also that so far as the defendants  were  con- cerned,  their possession of the 500 bighas was  not  inter- fered  with  and they still remained in  possession  as  the lessees, but instead of paying the royalty to the plaintiffs it  was agreed between all the parties that  the  defendants would  pay the royalty in future to Shibsaran  and  Sitcram. If the matter had stood there, the learned Advocate for  the appellant  could not have seriously contested the  position, but he vehemently argued that when the agreement was not  to pay  the same amount of royalty or commission as  previously agreed  to but an altered amount of royalty and  commission, the  document should be held to fall within the mischief  of section 17 (1)(d)of the (1) 47 Cal. 485: P.C. 839 Registration  Act.  The answer to this contention is,  as  I have stated just now, to be found in the Full Bench decision of  this court :" [see Charu Chandra Mitra’s case  ()].   It was  there held that a mere alteration of the rent  reserved does not make the transaction a new lease so as to bring  it within clause (d)of subsection (1).     We are unable to share this view.  It oversimplifies the compromise transaction which, in our opinion, involves  much more than a mere alteration of the royalties stipulated  for in the previous pattas executed by Kumar.  Nor can we accept the  suggestion of Mr. Chatterjee for the respondents  theft the  compromise operated as an assignment to the  Singhs  by

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

Kumar of the latter’s reversion under the "lease granted  to the  Deoshis and all that the latter did was to  acknowledge the Singhs as their landlords and attern to them.  On  tiffs view  it was said that the transaction   would    not   fall under    clause  (d),  although it would fall under   clause (b)  but  then would  be  saved  by the exception in  clause (vi)  of   sub-section  (2).    The    argument,    however, overlooks that Kumar had leased the area of 5,800 bighas  to the  Singhs  by his patta dated 11th March,  1921,  and  the compromise  by  providing  that the Singhs  should  pay  the reduced  royalty of 1a. 9p. per ton in respect of the  whole area  preserved  Kumar’s  reversion intact.   He  could  not therefore be deemed to have assigned any part of his  inter- est  in 5,800 bighas as landlord to the Singhs who  continue to  hold the entire extent as tenants under him.   What  the compromise  really did was. as stated already, to bring  the Singhs  and  the Deoshis into a new  legal  relationship  as underlessor and under lessee in respect of 500 bighas  which were  the subject-matter of the title suit; in other  words, its  legal effect was to create a perpetual  underlease  be- tween  the Singhs and the Deoshis which would  clearly  fall under  clause  (d) but for the circumstance that it  was  to take  effect  only on condition float the  Singhs  paid  Rs. 8,000 to Kumar within 2 months (1) 3 P.L.J. 255 840 thereafter.   As  pointed out by the Judicial  Committee  in Hemanta Kumar’s case (1)  "An agreement for a lease, which a lease is by the statute declared to include, must, in  their Lordships’  opinion, be a document which effects  an  actual demise and operates as a lease  ......  The phrase which  in the  context where it occurs and in the statute in which  it is  found,  must in their opinion relate  to  some  document which  creates a  present  and  immediate  interest  in  the land." The compromise decree expressly provides that  unless the sum of Rs. 8,000 was paid within the stipulated time the Singhs were not to execute the decree or to take  possession of the disputed property.  Until the payment was made it was impossible  to determine whether there would be  any  under- lease  or not.  Such a contingent agreement  is  not  within clause  (d)  and although it is covered by  clause  (b).  is excepted  by clause (vi) of sub-section (’2).  We  therefore agree  with the conclusion of the High Court though on  dif- ferent grounds and dismiss the appeal with costs.                   Appeal dismisseel. Agent for the appellant: P.K. Chatterjee. Agent for the respondent: Sukumar Ghose.