An agreement to lease under Section 2(7) of the Registration Act, 1908, must effect an actual demise and operate as a lease, and a mere promise to execute a lease deed and hand over possession in the future does not amount to a demise in the present time.

ORDER

1. Challenge in these appeals by special leave is to the decision of the High Court which had, while setting aside the judgments of the trial court and the lower appellate court, dismissed the appellants suit for specific performance.

2. Briefly stated, the facts are :

That on 25-11-1961 the parties in these appeals had entered into an agreement. By virtue of that agreement the appellant had agreed to take on lease for a period of 99 years a parcel of land which, at that time, was not in the possession of the respondent owners. The said land was in possession of the municipality and the agreement postulated that the municipality would be vacating the premises and would remove the postmortem house and thereupon the plot of land would be given on 99 years lease to the appellant. The agreement further stated that at the time when the possession of the plot is handed over a balance sum of Rs. 2500 would be paid as advance rent for 50 years, Rs. 1000 having already been received on the date of the signing of the agreement by the representative of the owner, and a formal lease deed would be executed and registered in the presence of the Sub-Registrar.

3. It is on 31-1-1964 that the town municipality vacated the premises by removing the postmortem house. It appears that the said municipality had constructed another postmortem house to meet the requirements. The respondents took possession of the land in question on 1-2-1964. It is thereafter that an agreement was entered into on 16-3-1964 between the owner Respondent 1 and Respondent 2 whereby the same plot of land was sought to be given on lease to Respondent 2.

4. It is the case of the appellant that he repeatedly requested Respondent 2 to accept the balance amount of Rs. 2500 and to execute a registered lease deed. On this not being done the suit was filed for specific performance on 28-1-1965.

5. After the pleadings were completed and evidence led, the Munsiff by his judgment dated 10-11-1972 decreed the suit. The appeal filed by the respondents was dismissed by the District Judge on 5-2-1976. This led to the filing of second appeal before the High Court.

6. By the judgment under appeal, the High Court came to the conclusion that as the document in question was not signed by both the parties, the appellant herein could not take advantage of the provisions of Section 27-A of the old Specific Relief Act. It then held that the document was a lease as defined by Section 2(7) of the Registration Act, 1908 and as it had not been registered in terms of Section 17(d) of the Registration Act, the appellant could not file a suit on the basis of the said document. The High Court accordingly allowed the appeal of the respondents and set aside the decree for specific performance.

7. We have heard the counsel for the parties at length. It. is quite clear from a perusal of the document in question that on the date when the same was executed the possession of the property was still with the municipality. This document contains the recital that Rs. 3500 would be paid as advance rent for 50 years and Rs. 1000 had been taken as advance on that day. The decision was to execute the lease for 99 years but the date from which the lease was to commence was not stipulated. It was provided in the agreement that the lease would commence only after the municipality vacates the premises and removes the postmortem house which had been constructed on the plot in question. The document envisaged that the possession of the land would be given simultaneously with the execution and registration of a lease deed. All this was to happen in future at a non-specified point of time because it was not known as to when the plot in question would fall vacant.

8. It is no doubt true that Section 2(7) of the Registration Act defines lease as including an "agreement to lease". It is on this basis that Shri Bhat, learned counsel appearing for the respondents contends that an agreement to lease was compulsorily registrabl