1994 Supreme(SC) 220

SUPREME COURT OF INDIA
M.N. Venkatachaliah, C.J.I., AND S. Mohan, J.
Civil Appeal No. 3570 of 1993
Decided On: 11.02.1994
State of Maharashtra and Ors. Appellants
Vs.
Atur India Pvt. Ltd. Respondent
Counsel for the Parties
For Appellant/Petitioner/Plaintiff: S.K. Dholakia, Senior Adv., S.M. Jadhav and A.S. Bhasme, Advs.
For Respondents/Defendant: Harish N. Salve, Senior Adv., D.A. Dave, Sunil Dogra and P.H. Parekh, Advs.

Headnote:

Civil Procedure Code,1908 - Section 375 - Maharashtra Ownership Flats (Regulation of promotion and construction of sale, management and transfer) Act, 1963 - Indian Registration Act - Section 2(7),2(n),17,65(3),28 - Bombay Stamp Duty Act, 1958 - Article 36 - Law of Property Act, 1925 - Section 205(1)(XXVII) - Sale deed - Grant of lease - Government of Maharashtra started reclamation work in area known as Backbay Reclamation area abetting Bombay City on Cuffee Parade and Nariman Point - Object of reclamation was to provide for construction of multi-storeyed buildings - Reclaimed land was divided into five blocks each was given number for block appellant issued invitation to public to make offers for purchase of plot of land for putting up multi-storeyed buildings - Plots and structures were to be given on years lease at a specified rates - Pursuant to advertisement respondent offered to secure plot - It made an offer along with letter in respect of block V Backbay Reclamation Estate measuring square metres - Respondent also filed a questionnaire as required to be filled in accordance with advertisement in which it was clearly mentioned that offer was as promoter - Collector of Bombay informed respondent that State Government had accepted tender for lease of plot at rate of per Sq Metre - Respondent was also called upon to make payment of security deposit of - This was complied with - A guarantee bond was also furnished for a sum of - A cheque of was deposited towards cost of preparation of agreement - In letter it was stated drawing attention to answer in questionnaire that respondent was acting as a promoter and lease might be granted in favour of co-operative society - Held, Court must first consider what expression an agreement to lease means Under Section 2(7) of Indian Registration Act hereinafter referred to as Act - Section 2(7) provides that a lease includes a counterpart Kabuliyat an undertaking to cultivate and occupy and an agreement to lease - In v. Midnapur Zamindari Co. Ltd Privy Council has that an agreement to lease which a lease is by statute declared to include must be a document which effects an actual demise and operates as a lease - In other words an agreement between two parties which entitles one of them merely to claim execution of a lease from other without creating a present and immediate demise in his favour is not included Under Section 2 Sub-section (7) - In Debts case a petition setting out terms of an agreement in compromise of a suit stated as one of terms that plaintiff agreed that if she succeeded in another suit which she had brought to-recover certain land other than that to which compromised suit related she would grant to defendants a lease of that land upon specified terms - Petition was recited in full in decree made in compromised suit Under Section 375 of Code of Civil Procedure - A subsequent suit was brought for specific performance of said agreement and it was resisted on ground that agreement in question was an agreement to lease Under Section 2(7) and since it was not registered it was inadmissible in evidence - This plea was rejected by Privy Council on ground that document did not effect an actual demise and was outside provisions of Section 2(7) - In coming to conclusion that agreement to lease under said section must be a document which effects an actual demise Privy Council has expressly approved observations made by in case of in regard to construction of Section 17 of Act - Document with which Privy Council was concerned was construed by it as an agreement that upon happening of a contingent event at a date which was indeterminate and having regard to slow progress of Indian Litigation might be far distant a lease would be granted - Court would also like to inform you that at time of making offer for above plot in accompanying questionnaire form Court have stated that company proposes to construct building on above plot and to sell flats on ownership basis and flat purchasers shall form into a co-operative society or an incorporated body to which rights of company including rights for lease of above plot will be transferred - As such company will be acting as promoters or builders for aforesaid scheme and lease of plot will be taken by us in name of a co-operative society or an incorporated body to be formed or constituted hereafter - In these circumstances Court would request you that necessary provision for granting lease in name of a co-operative society or an incorporated body as aforesaid may please be made in orders to be passed by Government - Court hold that notice of appellant offer of respondent and acceptance of Collector of tender of respondent for lease would merely constitute an agreement to lease - Clause clearly contemplates that licensee will be put in possession of plot on his executing agreement to lease - Therefore it is clear that by respondent accepting offer relationship of lessor and lessee between appellant and respondent had not come to be established - Further as pointed out earlier there was no actual demise on date of accepting of tender - Therefore it is only an agreement to lease - It will not fall Under Section 2(n) of Act in which case it is not an instrument chargeable to duty and question of impounding does not arise - Much less there could be a demand for stamp duty - Appeal Dismissed