21 March 1950
Supreme Court


Case number: Appeal (civil) 37 of 1949






DATE OF JUDGMENT: 21/03/1950


CITATION:  1950 AIR    1            1950 SCR   75  CITATOR INFO :  RF         1977 SC2425  (5)

ACT:     Transfer  of Property Act (IV of 1882), 8.  53-A--Agree- ment  to  lease evidenced by correspondence--Lessee  put  in possession--Acceptance of rent for several years--No  regis- tered lease deed--Suit for ejectment of lessee as  trespass- er--Maintainability--Doctrine of partperformance.

HEADNOTE:   The predecessor in interest of the defendant, being desir- ous of putting up a factory in certain plots of land situat- ed within     a Taluqdari estate which was under the manage- ment  of  the Government under the  Gujarat  Taluqdars  Act, 1888, applied in writing to the Taluqdari Settlement Officer for  a permanent lease of the plots.  The Taluqdari  Officer agreed  to  grant a lease on certain terms  subject  to  the sanction  of  the Government and forwarded a letter  to  the Government stating the offer to take the plots on lease, his provisional  acceptance of the same subject to the  sanction of  the  Government  and the terms of the lease   and  by  a Resolution dated 5th September, 1917, the Government granted the  sanction.  The defendant’s predecessor was put in  pos- session and though a formal lease deed was not executed  and registered,  the Taluqdari Officer and after the release  of the estate by the Government, the agent of the taluqdar, and the plaintiffs who came in as ijaradars continued to receive the agreed rent up to 1939..  In 1933 the plaintiffs  insti- tuted a suit to eject the defendant alleging that he was  a. mere trespasser as there was no registered lease deed:     Held,  that the correspondence which passed between  the defendant’s predecessor-in-title and the Taluqdari  Officer, the  letter  sent by the latter to the Government,  and  the Resolution     of the Government dated 5th September,  1917, proved that there was a contract in writing to grant a lease on  the terms.stated in the Taluqdari Officer’s letter,  and as  the  defendant’s predecessor was put  in  possession  in furtherance of this contract and the rents agreed upon  were accepted  for  several  years, s. 53-A of  the  Transfer  of Property  Act was applicable to the case and the  plaintiffs were not entitled to eject the defendant.



Judgment of the Bombay High Court reversed. 76

JUDGMENT: APPEAL  from the High Court of Judicature at Bombay:  Appeal No. XXXVII of 1949. This was an appeal from a judgment and decree of the  Bombay High  Court dated 9th March, 1943, in Second Appeal No.  717 of 1940, varying the decree of the Assistant Judge,  Ahmeda- bad,  in Appeal No. 173 of 1936 reversing the decree of  the joint Sub-Judge, Ahmedabad, in Suit No. 830 of 1933. R.J. Thakur, for the appellant.      Nanak  Chand Pandit, (Diwan Charanjit Lal,  with  him), for the respondents.      1950.  March 21.  The judgment of the Court was  deliv- ered by      MAHAJAN  J .--This is an appeal from the  judgment  and decree of the High Court of Bombay dated 9th March 1943  and made in Second Appeal No. 717 of 1940 varying the decree  of the  Assistant Judge, Ahmedabad, in Appeal No. 173  of  1936 reversing  the decree of the Joint Sub-Judge, Ahmedabad,  in Suit No. 830 of 1933.      The  suit out of which this appeal arises was filed  by the  respondent firm in ejectment to recover  possession  of survey  Nos.  222, 223, 225 and 226 situate  in  Rampura  in Ahmedabad district and for mesne profits, as early as  July, 1933,  and during its 17 years’ span of life it had a  some- what chequered career.  Those responsible for drawing up the pleadings  did not take pains to comprehend correctly as  to what they were about and the whole litigation was  conducted in  a  slovenly  and  slipshod   manner.    Evidence   which should have been produced at the beginning was allowed to be produced  at a much later stage after the case went back  on remand and the suit was determined by the Assistant Judge on fresh  issues and fresh materials. It was in  this  confused state  of the record that it was eventually decided  by  the High  Court  and its judgment is by no  means  satisfactory, The  long  time taken in deciding the  suit  which  involved determination of a few simple issues is such as is calculat- ed to bring into ridicule the administration of justice. 77     There  is a talukdari estate called the Bhankoda  estate in  Viramgam  taluka in Ahmedabad district.  It  is  jointly owned by several talukdars in different shares and comprises twelve  villages one of which is Rampura in which  the  suit lands are situate.  By Government Resolution No. 8170, dated 30th   August  1912, the estate was taken  under  Government management  under  section 28 of the Gujarat  Talukdars  Act (Bombay Act VI of 1888).  The firm of Shah Manilal  Maganlal and  Bros. (predecessors in interest of the  appellant)  de- sired  to erect a ginning factory on survey Nos.  228,  225, and  226 and with that object approached the Talukdari  Set- tlement  Officer for a permanent lease of these survey  num- bers.  The said officer agreed to grant a lease  subject  to sanction  of  Government.  By Resolution No. 10795  of  1917 dated  5th September 1917 the Government of  Bombay  granted the  requisite sanction. Exhibit 181 is a certified copy  of the  letter  from the Chief Secretary to Government  to  the Commissioner and to the Talukdari Settlement Officer and  in detail  it  mentions the various steps taken to  effect  the transaction.     On  9th  December 1916 an application was made  by  Shah Manilal  Maganlal in writing signed by him to the  Talukdari



Settlement Officer offering to take a permanent lease of the above  mentioned survey numbers on an annual rental  of  Rs. 290 for the purpose of erecting a ginning factory.  On  12th July 1917 the said officer accepted provisionally this offer after  taking  into consideration the objections  raised  by some  of the talukdars in respect of the grant of  a  lease. He  submitted  the papers to government with  the  following recommendations :--     "As  the petitioner was in urgent need to  start  opera- tions during the current ginning season I have in  anticipa- tion of Government sanction permitted him to enter upon  the land and have the honour to approach you for sanction  under section 27 (A) of the Court of Wards Act, the provisions  of which  have  been made applicable to  Talukdari  Estates  by section 29 (G) of the Gujarat Talukdars Act," 78     The  conditions of the lease agreed upon by the  parties were  annexed with this letter and a copy of the  offer  was also sent to Government. Ex. 181 recites the contents of the offer and states the undertaking given by the lessee.  There is intrinsic evidence within its contents to show that these writings were signed by the proposer. The Talukdari  Settle- ment Officer in a signed writing accepted the offer and sent it  for  Government  sanction. It further  appears  that  he communicated his acceptance to the lessee and agreed to give a lease if Government gave sanction.  The survey numbers  in question  were  in possession of tenants and it  was  agreed that  the lessee would take possession after making  private settlements  with them.  It was also agreed that if no  such private  arrangement  could  be made,  then  the  settlement officer  would take steps to issue ejectment notice  against the tenants.  On 20th July, 1917, the Commissioner forwarded the  papers to Government with his recommendations  and  the Government  on 5th September, 1917, sanctioned the  arrange- ment agreed to by the Talukdari Settlement Officer with Shah Manilal Maganlal.  The sanction order is signed by the Chief Secretary  to the Government and it contains an  endorsement of  its having been sent to the officers concerned.   It  is thus  clear  that a binding agreement to  lease  the  survey numbers  in  question  was effected  between  the  Talukdari Settlement Officer and Shah Manilal Maganlal with the  sanc- tion  of the Government. Though a draft of a formal deed  of lease  was prepared, no such document was formally  executed or registered for reasons which it is not necessary to state herein.     Soon  after the agreement the lessee took possession  of the  survey numbers in suit and put up thereupon  a  ginning and  a pressing factory, a bungalow, engine rooms and  other structures.   He tendered the agreed rent to  the  Talukdari Settlement  Officer who received it from him.  He  continued receiving  it  for about two years when the estate  was  re- leased from the management of the Government and came  under the  management of the talukdars. The manager  appointed  by the  talukdars continued to receive rent from the lessee  as had been settled by the Talukdari Settlement Officer. 79     On  4th May, 1924, a possessory mortgage of the  ginning factory  along with all its buildings was effected  by  Shah Manilal Maganlal in the sum of Rs. 1,40,000 in favour of the defendant.   The  mortgage included in the schedule  of  the mortgaged  property some other property as ’well.   The  two contestants  in the suit, the defendant and the  plaintiffs, acquired  their  rights in this property  during  the  years 1924-25.   The  defend ant came in as a mortgagee  as  above stated, while the plaintiffs came in as ijaradar and assign-



ee  of certain mortgage rights.  The plaintiffs  since  then have been receiving the rent according to the grant made  by the  Talukdari  Officer.   In the year  1933  the  appellant purchased the equity of redemption of the suit property at a court auction and became vested with all the rights of Mani- lal  Maganlal in this property, the value of which  has  now been estimated in the neighbourhood of Rs. 38,000.     In  the  year 1933  the plaintiffs discovered  that  the defendant   had  no  registered  lease  in  his  favour  and therefore  in  law he  was not entitled to the rights  of  a permanent  tenant  in respect of the   survey   numbers   in dispute.  They  therefore instituted the present  suit   for ejectment  of the defendant.  In the 2nd and 3rd  paragraphs of  the plaint it was  admitted that in .the course  of  the correspondence  with  the Government of Bombay a  lease  was negotiated   between the firm of Shah Manilal  Maganlal  and the  Talukari  Settlement Officer in respect of  the  survey numbers in dispute for a period of fifty years at an  annual rental  of Rs. 290, but it was stated that  because  Manilal Maganlal did not execute a formal registered lease they were in  possession  as  trespassers. In the  4th  paragraph  the authority  of the Talukdari Settlement Officer to grant  the lease was also challenged.  In the 8th paragraph it was said that  the plaintiffs received the amount of the lease up  to 31st July 1932 and that no notice was necessary to be given, the position of the defendant being that of a trespasser. It was however alleged that a notice was given on 25th December 1930, 11 80     The suit was defended on a number of grounds,inter alia, it  was pleaded that the plaintiffs had no right to  sue  in ejectment,  not being the landlord inasmuch as they had  not obtained  any right in the land itself and had not  acquired complete title by an assignment of the whole of the interest of  the talukdars in the survey numbers in dispute.  It  was pleaded  that  the defendant was a permanent tenant  of  the survey numbers and that the plaintiffs’ own conduct debarred them from claiming ejectment.    The  trial Judge decreed the suit on the finding that  as no  written lease was forthcoming it should be deemed to  be non-existent.  It was said that no efforts had been made  to show  that  the Settlement Officer had sanctioned  with  the approval  of the Government a permanent lease in respect  of survey  Nos. 223 and 225 to Shah Manilal Maganlal.   In  the concluding  part  of the judgment it was remarked  that  the doctrine  of equitable part performance could not  apply  to the  present  case. Though no specific issue was  raised  on this  point,  the matter seems to have been argued  at  some stage  before  the trial Judge on facts found  or  admitted. There was an unsuccessful effort to obtain a review of this decision  on  the  ground  of  discovery  of  fresh  materi- als.  Thereafter the matter was taken to the court of appeal and  it  was alleged in ground No. 3  that  the  Subordinate Judge  had erred in not considering the position created  in the  case by the equitable rule of law embodied  in  section 53-A  of the Transfer of Property Act.  On 30th July,  1938, the appellate court made an order of remand under Order XLI, Rule  25,  and  called for a report  on  the  following  two issues:-    (1) Whether the plaintiff was a mortgagee in occupa- tion of S. Nos. 222, 223, 225 and 226 ?    (2) Whether the suit was bad for non-joinder of parties ?     The  trial Judge reported on the remand  issues  against



the  plaintiffs.  He also admitted in evidence a  number  of documents produced after remand and one of these is Ex. 181. A point was raised that documents produced after remand Were not relevant to the issues remanded 81 and should not be admitted.  This contention was  overruled. The Assistant Judge allowed the appeal on 27th April,  1940. He  held that the plaintiffs had failed to  establish  their right to maintain the suit either as ijaradars or as assign- ees  of mortgage  rights.   In para. 21 of his  judgment  he observed as follows :--     "Ex.  181  shows that the terms of the lease  have  been reduced to writing though  no regular  lease appears to have been executed.  On the question whether the lease is binding on  the plaintiff, I think section 53-A of the  Transfer  of the  Property Act is a complete answer.  Ex. 181 shows  that the  Talukdari Settlement Officer, with the sanction of  the Government, contracted to lease out these lands.  The  writ- ing is signed by the Government.  The terms of the lease can be ascertained clearly from Ex. 181.  It is not denied  that the  defendant’s predecessor-in-title was put in  possession of this property in performance of that contract.  Also  the acceptance by the Talukdari Settlement Officer as   well  as by  the plaintiff of the rent of the property as   fixed  by that  contract shows that. the possession of  the  defendant and his predecessor-in-title was in part performance of  the contract  of   lease.  Admittedly, there  is  no  registered lease.   The conditions of section 53-A of the  Transfer  of Property  Act are fully satisfied and the plaintiff  cannot, therefore,  eject the defendant on the ground that there  is no registered lease."     Further  on the learned Judge said that section 53-A  of the  ’Transfer  of  Property Act embodied  the  doctrine  of estoppel  and a plea to that effect had been taken  inasmuch as  the  defendant  had pleaded  that  the  plaintiffs  were estopped  by  their conduct from asking for  possession  and that therefore no separate issue was raised on this point.     The  unsuccessful  plaintiffs went up in  second  appeal against this decision to the High. Court of Bombay. The High Court  allowed  the appeal and modified the  decree  of  the Assistant Judge.  It decreed the plaintiffs’ suit in respect of survey Nos. 223 and 225 and dismissed the suit in respect of survey Nos. 222 and 226, 82 On  the  question of the plaintiffs’ title to  maintain  the suit the High Court reached the following decision:-     "If  it were necessary we would hold that the  plaintiff has sufficiently proved that it is entitled to maintain this suit  in its capacity as ijaradar as well as  assignee  from the mortgagees. But we think even apart from that, plaintiff is  entitled to bring this suit because on  the  defendant’s own admission he has paid rent to the plaintiff for three of the  suit fields, viz., survey Nos. 223, 225, and  226,  and that  too not the interest of 84 Dakdas in them but for  all the  100 Dakdas.  In fact, ever since the plaintiff came  on the  scene  the defendant has treated the plaintiff  as  the landlord  as regards these three survey numbers, and in  the present  suit, therefore, the defendant cannot  dispute  the plaintiff’s right to sue."     In a later part of the judgment it was observed that  in any case Ginwalla as the manager of the plaintiff firm would be  entitled to continue the present suit as  receiver.   On the  second  question the learned judges of the  High  Court observed as follows :-     "We do not think it necessary to decide whether if there



had been a signed contract by the transferor in the  present case,  it would have fallen under section  53-A,because,  in our  opinion, the correspondence Which is summarized in  the Government Resolution cannot be regarded as evidence of  the contract,  and  secondly,  the terms of  the  contract  also cannot be deduced from the correspondence with any  reasona- ble  certainty.   We, therefore, hold  that  the  Government Resolution  on which the defendant relies is no evidence  of the writing of a contract referred to in section 53-A of the Transfer of Property Act, and apart from that the  defendant has  no legal basis on which he can claim to hold  the  land either as a permanent lessee or for a particular period."    The  principal  questions canvassed in this  appeal  are, whether the plaintiff firm has proved its title to  maintain the  present suit in ejectment against the  defendant,’  and whether  the  defendant is entitled to the  benefit  of  the provisions of sec. 53-A of the Transfer of Property Act. The question as to the maintainability of the suit’ 83 against  the  defendant without a proper notice  was  raised before the High Court but permission to argue it was refused because  the  matter had not been raised in  either  of  the lower Courts.     The  appeal  was  elaborately argued before  us  by  the learned  counsel for the parties, but in our view, it  is  ’ not  necessary to consider and decide all the  points  urged because  we consider that the Assistant Judge was  right  in entertaining  and giving effect to the plea under sec.  53-A of  the Transfer of Property Act and we are satisfied   that no   substantial grounds existed  for reversing- that  deci- sion  in  second  appeal.  This section  introduced  in  the Transfer of Property Act in 1929 is in these terms :--     "Where  any person contracts to transfer for  considera- tion  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  ......  and 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 the contract, though required to be registered, has not been registered  ...... the trans- feror  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  ......  ".     The section  is  a partial   importation   in the  stat- ute law of  India  of the English  doctrine of part-perform- ance.  It furnishes a statutory defence to a person who  has no. registered  title   deed in his favour to maintain  his- possession if he can prove a written and signed contract  in his  favour and some action on his part in  part-performance of  that contract.  In ’order to find whether the  defendant in the present case has satisfied the conditions of the 84 section, it has to be held proved that the Talukdari Settle- ment  Officer contracted to give a lease of the survey  num- bers in suit to Manilal Maganlal by a writing signed by  him and  that from this writing the terms of the tenancy can  be ascertained with reasonable certainty.  It has further to be held established that .the transferee took possession of the property or did any acts in furtherance of the contract.  It



may be mentioned that in cases of lease the legislature  has recognized that the equity of part performance is an  active equity  as  in English law and is sufficient to  support  an independent  action by the plaintiff. (Vide S. 27-A  of  the Specific  Relief Act). This section however applies to  con- tracts  executed after 1st April, 1930, and has no  applica- tion  in  the present case; but there can be no  mariner  of doubt  that the defence under Section    53-A  is  available to  a  person who has an agreement of lease  in  his  favour though  no lease has been executed and registered.   We  are satisfied  that the defendant has fulfilled both the  condi- tions necessary to attract the application of the section in the  present case. The High Court was in error when it  held that  the correspondence summarised in Ex. 181 could not  be treated as evidence of the contract and that its terms could not  be  reasonably deduced from this document.   It  is  no doubt true that Ex. 181 is merely secondary evidence of  the agreement of lease but it is equally true that it is a  very reliable piece of secondary evidence coming as it does  from government  records.  It furnishes proof of  the  fact  that there was an acceptance in writing under which the  contract to  transfer the survey numbers in suit by way of lease  was effected  by the Talukdari Settlement  Officer in favour  of Manilal   Maganlal. The offer was also in writing signed  by the offeror. The Government Resolution which made the agree- ment binding was also in writing and was signed by competent authority.   No objection as to admission of secondary  evi- dence  could be taken in this case as the  primary  evidence was  in  the possession either of the plaintiff  or  of  the talukdars,  the  predecessors in interest and  in  spite  of notice  it was not produced.  Reference in  this  connection may be made to the statement of the 85 plaintiff  in  the  witness box which is  to  the  following effect :--     "I  must have read the correspondence with T.S.O.  since it is so recited in the para. 2 of the plaint. I cannot  say whether  that  correspondence is in my office  or  with  the talukdars.   I cannot say without that correspondence as  to whether T.S.O. has called survey No. 226 as  Lalliti and hence the talukdars are not entitled to  any income  for it.  I also cannot say without that  correspond- ence that the rents of survey Nos. 225 and 223 were fixed at Rs. 135 and Rs. 115 respectively and that Rs. 45 were to  be taken by way of sugar..."     In  another part of the same statement he said that  the talukdars  had  got the records of the  time  preceding  his management.   It  appears that the original  documents  were returned to the talukdars after the discharge of the  Taluk- dari Settlement Officer and were in the possession and power of  the plaintiff or his predecessors in interest  and  they were not produced by him in spite of notice.  Para. 2 of the plaint clearly recites that there was correspondence between the Talukdari Settlement Officer and the defendant’S  prede- cessor in interest under which a lease was negotiated.   The plaintiff’s  knowledge of this correspondence and  its  con- tents  is  thus  prima facie established and  leads  to  the conclusion that it was in his possession or power and he has intentionally withheld it.  Without a perusal of this corre- spondence  the  facts  recited   in para. 2  of  the  plaint could  not  have  been     mentioned  in  the plaint.   Once it   is  held  that  Ex. 181 is  good secondary evidence  of the  agreement of lease, there can then be no hesitation  in holding  that by an offer and an acceptance made in  writing and  signed by the respective parties an agreement was  com-



pleted  between  the Talukdari Settlement  Officer  and  the predecessor in interest of the defendant and that  necessary sanction  of the’ Government was also in writing  signed  by the  officer concerned.  It has further to be held that  the terms of the contract can be fairly deduced from the  recit- als of this document.  The only important clause with  which we are concerned in the present case is as to the nature  of the tenancy.  It is clearly recited therein 86 that  the lease was to be of a permanent character  and  the terms  as regards rental could be revised after a period  of fifty  years.   The rent payable is recited  in  unambiguous terms in the document as Rs. 290 per annum.     It was not denied that the lessee took possession  after this  agreement was arrived at.  It was argued that  posses- sion  was  taken before sanction of the Government  was  ob- tained  in  September, 1917.  There is however no  proof  of this  except  a  bare recital in  the  Talukdari  Settlement Officer’s  letter  to Government that he had  permitted  the defendant  to enter on the land in anticipation  of  Govern- ment’s sanction.  As already pointed out, the possession was with the tenants and had to be taken after entering into  an arrangement  with them or by issuing notice to them.  It  is not possible to think that this could have happened in  such a short space of time as elapsed between the middle of  July and  the  beginning of September.  In any case  the  factory could not have been built before the sanction of the Govern- ment  was received. Not only did the lessee take  possession in part-performance of the agreement but he offered the rent agreed upon and paid it not only to the Talukdari Settlement Officer but to all those who subsequently managed the inter- est of the talukdars in the survey numbers in dispute.   The original lessee after having entered into possession of  the property effected a mortgage of it in favour of the  defend- ant.   The defendant advanced a substantial sum on  security of the property to the lessee.  The equity of redemption was sold at an auction sale.  The defendant and his  predecessor in  interest were willing to perform their part of the  con- tract.   As a matter of fact, they have performed the  whole of  it.  All that remains to be done is the execution  of  a lease  deed  by the lessor in favour of the  lessee  and  of getting  it  registered.  The plaintiff in para.  6  of  the plaint  in unambiguous terms admitted that he  received  the amount of the lease up to 31st July, 1932, in respect of the survey numbers in dispute. It is difficult to imagine  what. lease  he  was referring to in the absence of  a  registered deed  of lease.  It Could only mean the agreement  of  lease given in writing 87 and  signed  by the Talukdari Settlement Officer. It  is  in pursuance of this agreement of lease that all the subsequent acts  above  mentioned were done.  It-may also  be  observed that an agreement of lease creating a present demise but not registered is admissible under S. 49 of the Indian Registra- tion  Act  as evidence of part performance and  Ex.  181  is secondary evidence of that agreement. A formal lease is  not necessary  to  attract  the application of S.  53-A  of  the Transfer  of Property Act. All that is required is  that  an agreement  in writing signed by the transferor can be  gath- ered from the evidence.  The correspondence mentioned in Ex. 181 fully establishes that fact.     We are therefore of the opinion that the learned Assist- ant  Judge  rightly dismissed the plaintiff’s suit  and  the High Court was in error in interfering with that decision in second  appeal.  The result therefore is that    the  appeal



is allowed, the decision of the Assistant Judge restored and that  of  the High Court reversed.The circumstances  of  the case are such that we would make no order as to costs.   The defendant was at fault  in not producing all the documentary evidence  at  the proper stage of the case and he  has  been enabled  to  avail himself of the defence furnished  to  him under  S. 53-A by reason of the admission in evidence  after remand  of  Ex. 181, which though not properly  admitted  at that stage was not rejected by the High Court and could  not be  rejected at the stage when we dealt with the case.   The parties are therefore left to bear their own costs  through- out.                         Appeal allowed. Agent for the appellant: S.P. Varma. Agent for the respondent: Ganpat Rai. 12 88