Judgment

MAHAJAN, C.J.I. : The appellant were charged under section (1) of the Bombay Rent Restriction Act, 1947, for receiving from Shankar Das Gupta through Mathra Das, accused No. 3, on 23rd November 1850 a sum of Rs. 2,400/- as premium or pugree is respect of the grant of lease of Block No. 15 in a building under construction. The Magistrate found the appellants guilty of the charge and sentenced each of them to two months R. I. and a fine of Rs. 1,200/-. Mathra Das was convicted and sentenced to one day s S. I. and a fine of Rs. 100/-. The fourth accused Roshanlal Kanjilal was acquitted. Mathra Das preferred no appeal against his conviction and sentence. The appellants preferred an appeal to the High Court against their conviction. This was heard by Gajendragadkar and Chainani, JJ., on the 8th of October 1952. It was contended, inter alia , that even if it were held that the appellants had accepted the sum of Rs. 2,400/- they could not be said to have committed an offence under section 18(1) of the Act inasmuch as the amount could not in law be held to be premium in respect of the grant of a lease. On this point the learned Judges said as follows :

"In the present case the work regarding the building which still remained to be done was so important that both the parties agreed that the complainant should get into possession after the said work was completed. In such a case unless the building is completed the tenant has no right which can be enforced in a court of law. If the landlord finds it impossible for any reason to complete the building, what is the right which an intending tenant can enforce, against him. Therefore, in our opinion, there is considerable force in the contention urged by Mr. Lulla that in the present case even if it be held that the accused had received Rs. 2,400/- in the circumstances to which we have already referred that would not bring them within the mischief of section 18(1) because there has been no grant of a lease at all. There is only an agreement that the landlord would lease to the complainant a particular flat after the building has been fully and properly completed. It does appear that section 18(1) does not bring within its mischief executory agreements of this kinds".

2. A contrary view had been expressed in --- Mahadeo Shridhar v. The State , Criminal Revn. Appln. No. 1178 of 1949 D/- 25-1-1950 (Bom) (A) by another Bench of the High Court on the construction of section 18(1). The matter was therefore referred to the Full Bench. The question framed for the consideration of the Full Bench was in these terms :

"If as owners of an incomplete building the appellants accepted Rs. 2,400/- from the complainant in respect of an agreement between them that the appellants were bound to give and the complainant was entitled to take possession of flat No. 15 in the said building as soon as the said building was completed on the agreed rent Rs. 75/- per month, did the acceptance of Rs. 2,400/- by the appellants fall within the mischief of section 18 of Bombay Act LVII of 1947."

This question, if answered in the negative by the Full Bench, would have concluded the case.

3. The Full Bench answered the question referred in the affirmative. It held that the oral agreement did not constitute a lease but it amounted to an agreement to grant a lease in future, and that the receipt of consideration for an executory agreement was within the mischief of section 18(1) of the Act. The Full Bench expressed its opinion in these terms:

"What the Legislature has penalized is the receipt of a premium by the landlord and the Legislature has also required a nexus between the receipt by the landlord of a premium and the grant of a lease of any premises. Therefore a receipt alone by a landlord would not constitute as offence, but that receipt must be connected with the grant of the lease of any premises. Unless that connection is established no offence would be committed.

The contention of Mr. Lulla on behalf of the accuse