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PETITIONER: TIRUVENIBAI & ANOTHER

       Vs.

RESPONDENT: SMT.  LILABAI

DATE OF JUDGMENT: 21/01/1959

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. HIDAYATULLAH, M.

CITATION:  1959 AIR  620            1959 SCR  Supl. (2) 107  CITATOR INFO :  D          1975 SC1737  (4)

ACT:        Registration--Contract  to lease--Agreement not  creating  a        present and immediate demise--Whether requires registration-        " Agreement to lease ", Meaning of--Indian Registration Act,        1908 (16 of 1908), s. 2(7).

HEADNOTE: A  document  purporting to be a receipt and bearing  a  four anna  revenue  stamp  was executed by M  in  favour  of  the respondent  and  recited, inter alia, as follows: "  I  have this day given 108 to  you the land described below which is owned by me.   Now you have become occupancy tenant of the same.  You may enjoy the same in any way you like from generation to  generation. My estate and heirs or myself shall have absolutely no right thereto.   You shall become the owner of the said land  from date 1-6-44.  I will have absolutely no right thereto  after the  said date......... The estate...... has been  given  to you  in  lieu of your Rs. 8,700 due to you, subject  to  the condition that in case your amount has not been paid to  you on  date 1-6-44, You may fully enjoy the estate in  any  way you  like  from generation to  generation."  The  respondent instituted a suit against M for the specific performance  of a contract to lease alleging that under the document he  had contracted to lease to her in perpetuity in occupancy  right his  lands in consideration of the debt of Rs. 8,7oo and  as the  amount was not paid within the due date, he was  liable to  perform  and  give  effect  to  the  said  contract.   M contended, inter alia, that the document was an agreement to lease  under S. 2(7) of the Indian Registration  Act,  1908, and  that  as it was not registered it was  inadmissible  in evidence. Held, that an agreement to lease under S. 2(7) of the Regis- tration  Act,  1908,  must be a document  which  effects  an actual demise and operates as a lease.  An agreement between two  parties which entitles one of them merely to claim  the execution of a lease from the other without creating a  pre- sent and immediate demise in his favour is not an  agreement to lease within the meaning of S. 2(7) of the Act.

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Held,  further,  that on a construction of the  document  in question,  it  was not intended to, and did not,  effect  an actual  or  present demise in favour of the  respondent  and consequently it was not an agreement to leaseunders. 2(7) Of the   Act.   Accordingly,  the  document  did  not   require registration and was admissible in evidence. Hemanta Kumari Devi v. Midnapuy Zamindari Co., Ltd.,  (1919) L.R. 46 I.A. 240, relied on. Panchanan  Bose  v. Chandya Charan Misra, (1910)  I.L.R,  37 Cal. 808, approved. Narayanan Chetty v. Muthia Servai, (1912) I.L.R. 35 Mad. 63, Purmananddas  jiwandas  v. Dharsey Kirji, (1886)  I.L.R.  10 Bom. 101, Balram v. Mahadeo, I.L.R. 1949 Nag. 849 and  Poole v. Bently, (1810) 12 East. 168; 104 E.R. 66, distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 239 of 1955. Appeal from the Judgment and Decree dated the 30th November, 1953,  of the former Nagpur High Court in First  Appeal  No. 118  of 1947, arising out of the Judgment and  Decree  dated the 12th August, 109 1947, of the Court of the Additional District Judge, Wardha, in Civil Suit No. 9-A of 1946. M.   C.   Setalvad,  Attorney-General  for  India,   J.   B. Dadachanji,  S.  N.  Andley  and  Rameshwar  Nath,  for  the appellants. M.   Adhikari,  Advocate-General  for the  State  of  Madhya Pradesh and 1. N.  Shroff, for the respondent. 1959.  January 21.  The Judgment of the Court was  delivered by GAJENDRAGADKAR,  J.-This is an appeal by the widow, and  the minor  son of Mangilal, defendant 1, and it has  been  filed with  a  certificate  by the High  Court  of  Judicature  at Nagpur.   It  arises out of a suit filed by  the  respondent Shrimati Lilabai w/o Vrijpalji, for the specific performance of a contract to lease or in the alternative for damages and for  a  declaration  against defendant 2,  the  daughter  of defendant 1 that she has no right, title or interest in  the property in suit.  The respondent’s case was that  defendant I  had  executed an instrument (Ex.  P-1) in favour  of  the respondent  by  which he had contracted to lease to  her  in perpetuity  in  occupany  right  his  four  khudkasht  lands admeasuring  95.19  acres situated in Mouza  Mohammadpur  in consideration  of the debt of Rs. 8,700.  According  to  the respondent the instrument had provided that, if defendant  1 did not repay to her the said debt on June 1, 1944, the said contract of lease would be operative on and from that  date. Defendant  1 did not repay the loan by the  stipulated  date and  so he became liable to perform and give effect  to  the said  contract  of lease on June 1,  1944.   The  respondent repeatedly  called  upon  defendant 1 to  perform  the  said contract, but defendant I paid no heed to her demands and so she  had to file the present suit for specific  performance. The  respondent had been and was still ready and willing  to specifically  perform the agreement and to accept a deed  of lease for the lands in question in lieu of the said debt  of Rs.  8,700.  Defendant 1, however, had been guilty of  gross and  unreasonable delay in performing his part of  the  con- tract and that had caused the respondent the loss of 110 the  benefit of the lease and consequent damage.   On  these allegations  the respondent claimed specific performance  of

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the  contract and an amount of Rs. 2,340 as compensation  or in the alternative damages amounting to Rs. 11,080. To this suit Mst.  Durgabai, the daughter of defendant I had been  impleaded  as defendant 2 on the ground that  she  was setting up her own title in respect of the lands in suit and a declaration was claimed against her that she had no right, title  or interest in the said lands.  Defendant 2  filed  a written  statement contesting the respondent’s claim  for  a declaration against her but she did not appear at the  trial which proceeded exparte against her.  In the result  defend- ant 1 was the only contesting defendant in the proceedings. Several  pleas  were  raised  by  defendant  I  against  the respondent’s   claim.    He  denied  the  receipt   of   the consideration  alleged  by  her  and  he  pleaded  that  the document (Ex.  P-1) was a bogus, sham and collusive document which  had  been brought into existence for the  purpose  of shielding  his property from. his creditors and it  was  not intended  to be acted upon.  It was also urged by  him  that the  said document, if held to be genuine, was an  agreement to  lease under s. 2(7) of the Indian Registration Act,  and since it was not registered it was inadmissible in evidence. The  learned trial judge framed appropriate issues on  these pleadings  and  found against defendant I on  all  of  them. Accordingly  a  decree was passed ordering  defendant  1  to execute  a lease-deed in respect of the fields mentioned  in the  plaint  on a proper stamp paper in occupancy  right  in favour  of  the respondent and to put her in  possession  of them.   A  decree  for the payment of Rs. 2,316  by  way  of compensation  was also passed against him.  The  declaration claimed  by  respondent  against defendant  2  was  likewise granted. This  decree  was challenged by defendant 1  by  his  appeal before the High Court of Judicature at Nagpur.  Pending  the appeal defendant I died and his widow and his minor son came on the record as his 111 legal  representatives and prosecuted the said appeal.   The High   Court  held  that  the  document  was  supported   by consideration,  that it was not an agreement to lease  under s. 2(7) of the Indian Registration Act and therefore it  did not require registration and was admissible in evidence.  In the  result  the  decree  passed  by  the  trial  court  was confirmed and defendant 1’s appeal was dismissed. The  present appellants then applied to the High  Court  for leave  to  appeal to this Court and the High  Court  granted leave  because it held that the basic question  involved  in the decision of the appeal was the legal effect of Ex.   P-1 and  that  the  construction  of  a  document  of  title  is generally regarded as a substantial question of law.  It  is with  this  certificate  that the present  appeal  has  come before  this  Court,  and it raises two  questions  for  our decision:  Is the document (Ex.  P-1) an agreement to  lease under s. 2(7): If not, does it require registration under s. 17  of the said Act ? All other issues which  arose  between the parties in the courts below are concluded by  concurrent findings and they have not been raised before us. Before  dealing  with these points, we must  first  consider what the expression " an agreement to lease " means under s. 2(7) of the Indian Registration Act, hereinafter referred to as  the Act.  Section 2(7) provides that a lease includes  a counterpart,  kabuliyat,  an undertaking  to  cultivate  and occupy and an agreement to lease.  In Hemanta Kumari Debi v. Midnapur  Zamindari Co. Ltd. (1) the Privy Council has  held that  " an agreement to lease, which a lease is by the  sta- tute  declared to include, must be a document which  effects

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an actual demise and operates as a lease ". In other  words, an agreement between two parties which entitles one of  them merely  to  claim the execution of a lease  from  the  other without  creating  a  present and immediate  demise  in  his favour  is not included under s. 2, sub-s. (7).  In  Hemanta Kumari  Debi’s case (1) a petition setting out the terms  of an agreement in compromise of a suit stated as one of the (1)  (1919) L. R. 46 1. A. 240. 112 terms  that  the plaintiff agreed that if she  succeeded  in another suit which she had brought to recover certain  land, other  than that to which the compromised suit related,  she would  grant  to the defendants a lease of  that  land  upon specified  terms.  The petition was recited in full  in  the decree  made  in  the compromised suit under s. 375  of  the Code of Civil Procedure, 1882.  A subsequent suit was  brou- ght  for specific performance of the said agreement  and  it was  resisted on the ground that the agreement  in  question was an agreement to lease under S. 2(7) and since it was not registered  it was inadmissible in evidence.  This plea  was rejected  by  the  Privy  Council on  the  ground  that  the document did not effect an actual demise and was outside the provisions of s. 2(7).  In coming to the conclusion that the agreement to lease under the said section must be a document which  effects  an  actual  demise  the  Privy  Council  has expressly ’approved the observations made by Jenkins, C. J., in the case of Panchanan Bose v. Chandra Charan Misra (1) in regard  to  the  construction  of s. 17  of  the  Act.   The document  with  which the Privy Council  was  concerned  was construed  by it as " an agreement that, upon the  happening of a contingent event at a date which was indeterminate and, having  regard  to the slow progress of  Indian  litigation, might be-far distant, a lease would be granted "; and it was held  that  "  until the happening of  that  event,  it  was impossible to -determine whether there would be any lease or not ". This decision makes it clear that the meaning of  the expression " an agreement to lease " " which, in the context where  it  occurs and in the statute in which it  is  found, must  relate  to some document that creates  a  present  and immediate  interest in the land ". Ever since this  decision was  pronounced  by  the  Privy  Council  the  expression  " agreement to lease " has been consistently construed by  all the  Indian  High Courts as an agreement  which  creates  an immediate  and a present demise in the property  covered  by it. It would be relevant now to refer to the observations (1)  (1910) I.L.R. 37 Cal. 808. 113 of  Jenkins, C. J., in the case of Panchanan Bose  (1).   In that  case,  a solehnama by which no immediate  interest  in immoveable property was created was held not to amount to  a lease within the meaning of cl. (d) of s. 17 of the Act  but merely  an agreement to create a lease on a future  day.   " Such a document ", it was observed, " fell within cl. (h) of s.  17  and   as such  was  admissible  in  evidence without registration  ".  Jenkins,  C. J., held  that  "  on  a-fair reading of the document, no immediate interest was  created, there was no present demise, and the document was merely  an agreement  to create a lease on a future day, the  terms  of which  were  to  be defined by documents  to  be  thereafter executed  ". " This being so ", said the learned C. J., "  I think the appellants I-rave rightly contended before us that the  document was admissible in evidence as it falls  within cl.  (h)  of s. 17 of the Indian Registration  Act  ".  This decision  would  show  that an agreement  which  creates  no

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immediate  or  present demise was not deemed to be  a  lease under s. 2(7) and so it was hold to fall within s. 17(h)  of the Act and this view has been specifically affirmed by  the Privy Council in Hemanta Kumari Debi’s case (2). It is true that in Narayanan Chetty v. Muthiah Servai (3)  a Full  Beach  of  the  Madras High Court  had  held  that  an agreement to execute a sub-lease and to get it registered at a  future  date  was  a lease -within s.  3  of  the  Indian Registration Act of 1877 (III of 1877) and was  compulsorily registrable  under el. (d) of s. 17.  Such an  agreement  to grant  a  lease which requires registration,  it  was  held, affects  immoveable  property  and  cannot  be  received  in evidence in a suit for specific performance of an agreement. The question which was referred to the Full Bench apparently assumed that the agreement in question required registration and  the point on which the decision of the Full  Bench  was sought for was whether such an agreement can be received  in evidence  in  a  suit for  specific  performance  (1)  where possession  is given in pursuance of an agreement,  and  (2) where it is not; and the Full Bench (1)  [1910]  I.L. R. 37 Cal. 808.  (2) [1919] L.R.  46  I.A. 240. (3)  (1912) I.L.R. 35 Mad. 63. 15 114 answered  this question in the negative.  " An agreement  to lease ", it was observed in the judgment of the Full  Bench, "  is expressly included in the definition of the  lease  in the  Registration Act while it cannot be suggested  that  an agreement to sell falls within any definition of sale ".  It is  clear that the question about  the construction  of  the words  "  agreement to lease " was not  specifically  argued before the Full Bench, and the main point considered was the effect  of  the  provisions of s. 49 of the  Act.   In  that connection the argument had centred round the effect of  the provisions  of cl. (h) of s. 17 of the Registration Act  and s. 54 of the Transfer of Property Act.  The Full Bench  took the view that in enacting s. 49 of -the Act the  Legislature meant to indicate that the instrument should not be received in  evidence even where the transaction sought to be  proved did  not  amount  to a transfer of  interest  in  immoveable property  but  only created an. obligation to  transfer  the property.  A contract to sell immovable property in writing, though  it  may  affect  the  property  without  passing  an interest in it, is exempted from registration by clause  (h) (now cl. 2 (v)) of section 17 but an agreement in writing to let, falling within cl. (d) of s. 17, is not.  That is  why, according  to  the Full Bench, such an agreement  cannot  be received  in evidence of the transaction which  affects  the immovable  property comprised therein.  Thus  this  decision does not directly or materially assist us in construing  the expression " agreement to lease ". Besides,  the  said decision has not been  followed  by  the Madras  High  Court  in  Swaminatha  Mudaliar  v.  Ramaswami Mudaliar (1) on the ground that it can no longer be regarded as good law in view of the decision of the Privy Council  in Hemanta  Kumari  Debi’s  case(2), and, as  we  have  already pointed  out,  all  the  other High  Courts  in  India  have consistently followed the said Privy Council decision. The learned Attorney-General has, however, contended  before us that the correctness of the decision of the Privy Council in  Hemanta Kumari Debi’s case (2) is open to doubt and  -he has suggested that we (1) (1921) I.L.R. 44 Mad. 399. (2) (1919) L.R. 46 I A. 240.

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115 should re-examine the point on the merits afresh.  We do not think there is any substance in this contention because,  if we  may  say so with respect, the view taken  by  the  Privy Council in the said case is perfectly right.  Section  17(1) of  the  Act deals with documents of which  registration  is compulsory.  It is obvious that the documents falling  under cls.  (a), (b), (c) and (e) of sb-s. (I’) are all  documents which  create an immediate and present demise  in  immovable properties   mentioned  therein.   The   learned   Attorney- General’s  argument is that cl. (d) which deals with  leases does  not  import any such limitation because it  refers  to leases  of  immoveable properties from year to year  or  any term exceeding one year or reserving a yearly rent; and  the Act  deliberately gives an inclusive definition of the  term ’lease’  in s. 2(7).  This argument, however, fails to  take into  account  the relevant provisions of the  Transfer’  of Property  Act.  Section 4 of the said Act provides  that  s. 54,  paragraphs  2 and 3, 59, 107 and 123 shall be  read  as supplemental to the Indian Registration Act, 1908.   Section 107 is material for our purpose.  Under this section a lease of  immoveable  property from year to year or for  any  term exceeding  one year or reserving a yearly rent can  be  made only under a registered instrument.  This section also  lays down that where a lease of immoveable property is made by  a registered instrument, such instrument, or, where there  are more  instruments  than  one,  each  instrument,  shall   be executed  by  both the lessor and the lessee.  It  would  be noticed that if s. 107 has to be read as supplemental to the Act,  the definition of the word I lease’ prescribed  by  s. 105 would inevitably become relevant and material; and there is no doubt that under s. 105 a lease of immoveable property is  a transfer of right to enjoy such property made  in  the manner  specified in the said section.  Therefore, it  would not  be right to assume that leases mentioned in cl. (d)  of s.  17, sub-s. (1), would cover cases of documents which  do not  involve a present and immediate transfer  of  leasehold rights.  It would thus be reasonable to hold that, like  the instruments mentioned in cls. (a), (b) and (c) of s.  17(1), leases also are instruments 116 which transfer leasehold rights in the property  immediately and   in  presenti.   We  have  already  referred   to   the requirement of s. 107 of the Transfer of Property Act that a lease  must be executed both by the lessor and  the  lessee. It  may be pertinent to point out that an instrument  signed by  the lessor alone which  may not be a lease under s.  107 may  operate as an agreement to lease under s. 2(7)  of  the Act. The legislative history of the provisions of s. 17(2)(v) may perhaps  be of some assistance in this connection.   Section 17(h) of Act III of 1877 which -,corresponds to the  present s. 17(2) (v) did not appear in the earlier Registration Acts of 1864,1866 and 1871.  Its introduction in Act III of  1877 became  necessary as a result of the decision of  the  Privy Council  in  Fati Chand Sahu v. Lilambar Singh  Das  (1)  in which  it  was  held that an agreement  to  sell  immoveable property  for Rs. 22,500 coupled with an  acknowledgment  of -the  receipt of Rs. 7,500 and a promise to execute a  sale- deed  on  the  payment  of  the  balance  was   compulsorily registrable  under s. 17 of the Act (2).  Section 17(h)  was therefore  enacted in 1877 to make it clear that a  document which  does not itself create an interest in the  immoveable property does not require registration even if it  expressly contemplates and promises the creation of that interest by a

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subsequent  document; in other words, contracts of sale  and purchase  of  which specific performance  would  be  granted under  certain circumstances fall within this provision  and would  no  longer be governed by the said  decision  of  the Privy  Council  in the case of Fati Chand Sahu  v.  Lilambar Singh  Das (1).  Thus the policy of the Legislature  clearly is to exclude from the application of cls. (b) and (c) of s. 17(1) agreements of the said character.  On principle, there is  no  difference  between  such  agreements  of  sale   or purchase-  and agreements to lease.  Under both  classes  of documents no present or immediate demise is made though both of  them  may  lead to a successful  claim  for  a  specific performance.  That is why the Privy Council observed in the (1) (1871) 9 Beng. L. R. 433; 14 M. L. A. 129. (2) Act XX of 1866. 117 case  of  Hemanta Kumari Debi (1) that the context  and  the scheme  of the statute justified the view taken by  Jenkins, C. J., in the case of Panchanan Bose (2). It  may  also  be relevant to bear in mind  that  the  other documents which are included within the word I lease’ by  s. 2(7) of the Act support the same conclusion.  A counterpart, as it is usually understood, is a writing by which a  tenant agrees to. pay a specified rent for the property let to  him and  signed  -by him alone.  It is thus in the nature  of  a counterpart of a lease and as such it is included within the meaning  of  the word I lease’ under s. 2(7).  Same  is  the position  of a kabuliyat and an undertaking to cultivate  or occupy.   In  other  words, it is clear that  all  the  four instruments  which,  under the inclusive  definition  of  s. 2(7),  are treated as leases satisfy the test  of  immediate and  present  demise in respect of the  immoveable  property covered  by  them.   We  must,  therefore,  hold  that   the expression  "  an  agreement to lease  "  covers  only  such agreements as create a present demise. Let  us now proceed to deal with the question as to  whether the document (Ex.  P-1) constitutes " an agreement to  lease "It  purports  to  be a receipt executed in  favour  of  the respondent  by  defendant  I and bear a  four  anna  revenue stamp." I have this day giver to you ", says the document, " the land described below which is owned by me.  Now you have become occupancy tenant of the same.  You may enjoy the same in  any  way  you like from generation  to  generation.   My estate  and heirs or myself shall have absolutely  no  right thereto.   You shall become the owner of the said land  from date 1-6-1944. 1 will have absolutely no right thereto after the  said date ". The the document proceeds to  mention  the properties  and describes them in detail, and it adds "  all the above fields are situate at Mouza Mohammadpur, mouz  No. 312,  tahsil  Arvi, district Wardha.   The  estat  described above has been given to you in lieu of you Rs. 8,700 due  to you, subject to the condition that case your amount has  not been  paid to you on date 1-6-1944, you may fully enjoy  the estate describe, (1) (1919) L.R. 46 I.A. 240. (2) (1910) I.L.R. 37 Cal. 808. 118 above  in any way you like from generation to generation  ". The question for our decision is: Does this document  amount to an agreement to lease under s.  2(7) of the Act ? In construing this document it is necessary to remember that it has been executed by laymen without legal assistance, and so  it  must  be liberally  construed  without  recourse  to technical  considerations.   The heading  of  the  document, though  relevant, would not determine its character.  It  is

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true  that  an agreement would operate as a  present  demise although its terms may commence at a future date.  Similarly it  may amount to a present demise even though  parties  may contemplate to execute a more formal document in future.  In considering  the  effect  of the document  we  must  enquire whether  it contains unqualified and unconditional words  of present demise and includes the essential terms of a  lease. Generally  if rent is made payable under an  agreement  from the date of its execution or other specified date, it may be said  to create a present demise.  Another relevant test  is the intention to deliver possession.  If possession is given under an agreement and other terms of tenancy have been  set out,  then the agreement can be taken to be an agreement  to lease.  As in the construction of other documents, so in the construction of an agreement to lease, regard must be had to all the relevant and material terms; and an attempt must  be made to reconcile the relevant terms if possible and not  to treat any of them as idle surplusage. The learned Attorney-General contends that this document  is not a contingent grant of lease at all.  According to him it evidences a grant of -lease subject to a condition and  that shows  that a present demise is itended by the parties.   He naturally relies upon the opening recitals of the  document. According  to him, when the document says that  defendant  I has  given  to the respondent the land described  below  and that the respondent has become occupancy tenant of the same, it  amounts  to a clear term of present demise.   A  similar recital  is  repeated -in the latter part  of  the  document where it is stated that the estate described 119 above has been given to the respondent in lieu of Rs.  8,700 due  to  her.  In our opinion, it would be  unreasonable  to construe these recitals by themselves, apart from, the other recitals in the document.  We cannot lose sight of the  fact that the document expressly states that the respondent shall become  the  owner  of  the  land  from  1-6-1944  and  that defendant  I’ would have no title over it after  that  date. This  recital  also is repeated in the latter  part  of  the document;  and it makes the intention of the  parties  clear that  it  is  only if the amount of debt  is  not  rapid  by defendant I on the date specified that the agreement was  to come into force.  In other words, reading the document as  a whole  it  would  be difficult to spell  out  a  present  or immediate  demise of the occupancy rights in favour  of  the respondent.   In this connection the fact that the  document is  described as a receipt may to some extent  be  relevant. It  is clear that by executing this document  the  defendant wanted   to  comply  with  the  respondent’s   request   for acknowledging  the  receipt of the amount coupled  with  the promise  that the amount would be repaid on  1-6-1944.   The defendant also wanted to comply with the respondent’s demand that,  if  the amount was not repaid on the  said  date,  he would  convey  the  occupancy rights in his  lands  to  her. Besides, it is significant that the document does not  refer to the payment of rent and does not contemplate the delivery of possession until 1-6-1944.  If the document had  intended to convey immediately the occupancy rights to the respondent it  would  undoubtedly  have referred  to  the  delivery  of possession  and  specified the rate at which, and  the  date from  which..  the rent had to be paid to  her.   The  stamp purchased   for   the  execution  of   the   document   also incidentally  shows that the document was intended to  be  a receipt  and  nothing  more.   Under s.  2  of  the  Central Provinces  Land  Revenue Act, 1917 (C.  P. II  of  1917)  an agricultural year commences on the first day of June and  it

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is from this date that the agreement would have taken effect if defendant I had not repaid the debt by then.  It is clear that the respondent was not intended to be treated as an 120 occupancy  tenant between the date of the document and  June 1, 1944.  During that period the agreement did not come into operation at all.  In other words, it is on the  contingency of defendant’s failure to repay the amount on June 1,  1944, that  the agreement was to take effect.  We  have  carefully considered  the  material terms of the document and  we  are satisfied  that it was not intended to, and did not,  effect an actual or present demise in favour of the respondent.  In our opinion, therefore, the High Court was right in  holding that  the  document was not an agreement to lease  under  s. 2(7) of the Act and so did not require registration. We would now briefly refer to some of the decisions on which the  learned  Attorney-General  relied  in  support  of  his construction  of the document.  In Purmananddas Jiwandas  v. Dharsey  Virji  (1), the agreement between the  parties  had expressly  provided  that  the  lease  in  question  was  to commence  from  October 1, 1882, though  the  agreement  was executed  seven  days later, that the rent was  to  commence from  that day and the rent then due was to be paid  by  the next  day.  It is in the light of these specific terms  that the  Bombay High Court held that the relevant words  in  the document  operated  as  an actual  demise.   None  of  these conditions  is  present in the document with  which  we  are concerned. Similarly  in  Pool  v. Bentley (2), by  the  instrument  in question, Poole had agreed to let unto Bentley, and  Bentley had agreed to take, all that piece of land described for the term  of 61 years at the yearly rent of pound 120  free  and clear of all taxes, the said rent to be paid quarterly,  the first  quarter’s rent within 15 days after Michaelmas  1807, and  that in consideration of the lease, Bentley had  agreed within the space of four years to expend and lay out in 5 or more  houses of a third-rate or class of building  2000  and Poole had agreed to grant a lease or leases of the said land and  premises as soon as the said 5 houses were covered  in. In dealing with the construction of this document Lord (1)  (1886) I.L.R. 10 Bom. 101. (2)  (1810) 12 East. 168; 104 E.R. 66. 121 Ellenborough, C. J., observed that the rule to be  collected from  the relevant decisions cited before him was  that  the intention  of the parties as described by the words  of  the instrument  must  govern  the  construction  and  that   the intention of the parties to the document before him appeared to be that the tenant, who was to have spent so much capital upon  the premises within the first four years of the  term, should  have a present legal interest in the term which  was to  be  binding  upon both  parties;  though,  when  certain progress  was made in the building, a more formal  lease  or leases might be executed.- This decision only shows that  if the intention is to effect a present demise the fact that  a further formal document is contemplated by the parties would not detract from the said intention.  It would, however,  be noticed   that  the  document  in  that  case  contained   a stipulation  for the payment of the rent and the tenant  was to be let into possession immediately.  This case also  does not assist the appellant. In  Satyadhyantirtha  Swami  v.   Raghunath  Daji  (1)   the contract  of  lease  was contained in  two  documents  which showed  that the lands were being cultivated by  Appaji  and Ravji who had signed the first document. and that they  were

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authorised to continue ’ in occupation of the lands on terms mentioned  in the first document.  The argument that a  part of  the  agreement would not come into operation  till  some years  later,  it  was held, did not  operate  to  make  the document  other than a present demise.  It is  difficult  to appreciate how this decision can assist us in construing the present document. In  Balram v. Mahadeo (2) the Nagpur High Court was  dealing with  an instrument which purported to be a receipt and  the terms  of  which seemed to contemplate the  execution  of  a sale-deed in respect of the properties covered by it.   Even so, the material clause was that "I it is agreed to give  to you both the above fields in occupancy rights ". It was held that,  on a fair and reasonable construction,  the  document was (1)  A.I.R. 1926 Bom. 384. (2) I.L.R. 1949 Nag. 849. 16 122 intended  to  affect a transfer of the  occupancy  right  in presenti  and was as such an agreement to lease.  No  doubt, as  observed  by Bose, J., " on a superficial  view  of  the document  it would not appear to be an agreement  to  lease. But in construing a transaction one has to look beneath  the verbiage  and ascertain what are the real rights  which  are being transferred.  When that is done, we consider that this document  is an agreement to lease despite the fact that  it calls itself a receipt and speaks throughout of a sale ". It is unnecessary to consider the merits of the conclusion rea- ched  by  the Nagpur High Court in this case.  It  would  be enough  to say that the said decision would not  afford  any assistance in construing the document before us.  Besides it is  obvious that in construing documents, the usefulness  of the precedents is usually of a limited character; after  all courts  have to consider the material and relevant terms  of the  document with which they are concerned; and it is on  a fair and reasonable construction of the said terms that  the nature and character of the transaction evidenced by it  has to be determined.  In our opinion, the High Court was  right in  holding  that  the  instrument (Ex.   P-1)  was  not  an agreement to lease under s. 2(7) of the Act. The  result is the appeal fails and must be  dismissed  with costs.                          Appeal dismissed. 123